SeaWorld Entertainment announces gains in revenue, income and per capita spending despite decrease in attendance compared to 2019

Posted Tuesday, November 9, 2021 1:12 PM | Contributed by Jeff

From the press release:

SeaWorld Entertainment, Inc. (NYSE: SEAS), a leading theme park and entertainment company, today reported its financial results for the third quarter and first nine months of fiscal year 2021.

Third Quarter 2021 Highlights

  • Attendance was 7.2 million guests, an increase of 5.7 million guests from the third quarter of 2020. Compared to the third quarter of 2019, attendance declined by 0.9 million guests or 11.0%.
  • Total revenue was $521.2 million, an increase of $415.1 million from the third quarter of 2020. Compared to the third quarter of 2019, total revenue increased by $47.5 million or 10.0%.
  • Net income was $102.1 million, the second highest third quarter net income for the Company, an increase of $181.3 million from the third quarter of 2020. Compared to the third quarter of 2019, net income increased by $4.1 million or 4.2%.
  • Adjusted EBITDA was a record $265.3 million an increase of $276.5 million from the third quarter of 2020. Compared to the third quarter of 2019, Adjusted EBITDA increased by $58.4 million or 28.2%.
  • Total revenue per capita increased 6.2% to $72.13 from the third quarter of 2020. Admission per capita increased 1.7% to $41.06 while in-park per capita spending increased 12.8% to $31.07 from the third quarter of 2020. Compared to the third quarter of 2019, total revenue per capita increased 23.7%, admission per capita increased 24.4%, and in-park per capita spending increased 22.8%.

First Nine Months 2021 Highlights

  • Attendance was 15.2 million guests, an increase of 11.1 million guests from the first nine months of 2020. Compared to the first nine months of 2019, attendance declined by 2.7 million guests or 14.9%.
  • Total revenue was $1,132.9 million, an increase of $855.2 million from the first nine months of 2020. Compared to the first nine months of 2019, total revenue increased by $32.7 million or 3.0%.
  • Net income was a record $185.0 million, an increase of $451.8 million from the first nine months of 2020. Compared to the first nine months of 2019, net income increased by $71.3 million or 62.7%.
  • Adjusted EBITDA was a record $509.3 million, an increase of $605.2 million from the first nine months of 2020. Compared to the first nine months of 2019, Adjusted EBITDA increased by $136.3 million or 36.5%.
  • Total revenue per capita increased 11.1% to $74.29 from the first nine months of 2020. Admission per capita increased 6.0% to $41.69 while in-park per capita spending increased 18.5% to $32.61 from the first nine months of 2020. Compared to the first nine months of 2019, total revenue per capita increased 21.0%, admission per capita increased 19.6%, and in-park per capita spending increased 23.0%.

Other Highlights

  • As of September 30, 2021, the Company's total available liquidity was $918.1 million, including $553.6 million of cash and cash equivalents on its balance sheet and $364.5 million available on its revolving credit facility.
  • Cash flow from operations was $168.4 million and $416.4 million for the three and nine months ended September 30, 2021, respectively. Free Cash Flow[2] was $139.7 million and $342.8 million for the three and nine months ended September 30, 2021, respectively.
  • On July 14, 2021, the Company completed a partial redemption of $50.0 million of its Second-Priority Senior Secured Notes due 2025. On August 25, 2021, the Company completed a refinancing of its debt by issuing $725.0 million aggregate principal amount of 5.250% senior notes due 2029 and $1.2 billion in term loans and, using the proceeds of these issuances, along with cash on its balance sheet, redeemed $450.0 million aggregate principal amount of its then outstanding 9.500% Second-Priority Senior Secured Notes due 2025 and the Company's then existing term loan facility. In connection with the refinancing, the Company also refinanced and increased its revolving credit facility to $385.0 million.
  • The Company's current deferred revenue balance as of September 30, 2021, was $173.4 million, an increase of approximately 51.4% when compared to September 30, 2019.
  • The Company repurchased approximately 1.53 million shares of common stock at a total cost of approximately $82.7 million during the third quarter of 2021.
  • In the third quarter of 2021, the Company helped rescue almost 400 animals bringing total rescues over its history to over 39,500.

"I am pleased to report another quarter of strong financial results while continuing to operate in a highly challenging and COVID-19 impacted environment," said Marc Swanson, Chief Executive Officer of SeaWorld Entertainment, Inc. "In the third quarter, we generated among our highest revenue and net income ever reported and another quarter of record Adjusted EBITDA. Our pricing and product strategies, along with the strong consumer demand environment, continued to drive higher realized pricing and strong guest spending in the quarter. Our third quarter financial performance would have been even better if not for limited international guest and group-related attendance, an unfavorable calendar shift and a record number of weather impacted days for our parks during the third quarter. Our record-breaking financial performance through the first nine months of the year is a testament to the resiliency of our business and the relentless efforts and dedication of our ambassadors. While we have made good progress, we continue to believe there are significant additional opportunities to improve our execution and continue to drive meaningful growth in both revenue and Adjusted EBITDA."

"During the quarter, we took advantage of our improved financial performance and favorable market conditions to refinance our debt which allowed us to reduce our overall debt, meaningfully reduce our go forward interest expense, push out maturities and increase our access to liquidity from revolving commitments. We also resumed our share repurchase activities and opportunistically repurchased 1.53 million shares during the quarter."

"Last week we concluded another successful Halloween season at our parks featuring our award-winning Halloween events, which contributed to meaningfully positive attendance and revenue growth in October compared to October 2019. Later this week we will begin our popular Christmas events at our SeaWorld, Busch Gardens and Sesame parks. Our Christmas events feature exciting entertainment, unique food and beverage offerings and seasonal merchandise for guests young, old and everyone in between. Looking ahead to 2022, we have announced what we believe is our most significant and exciting line-up of new rides, attractions, events and upgrades, including, something new and meaningful in every one of our parks. This includes the Ice Breaker rollercoaster at SeaWorld Orlando, the Iron Gwazi rollercoaster at Busch Gardens Tampa Bay, the Pantheon rollercoaster at Busch Gardens Williamsburg, the Emperor rollercoaster at SeaWorld San Diego, the Big Bird's Tour Bus ride at Sesame Place Philadelphia, the Tidal Surge screaming swing at SeaWorld San Antonio, the Reef Plunge waterslide at Aquatica Orlando, the Rapids Racer and Wahoo Remix waterslides at Adventure Island Tampa, the Aquazoid Amped waterslide at Water Country USA, and the Riptide Race waterslide at Aquatica Texas. In addition, we are particularly excited to open our newest park – Sesame Place San Diego in March 2022. We look forward to bringing the education, fun and enchantment of Sesame Street to our guests in Southern California," concluded Swanson.

The Company's third quarter 2021 financial results continued to be impacted by the COVID-19 pandemic. While all 12 parks were open and operating without COVID-19 related-capacity limitations in the third quarter (compared to 10 of its 12 parks open at the end of the third quarter of 2020, all operating with capacity limitations), international travel restrictions for guests outside of the United States and limited group-related attendance adversely affected attendance and revenue for the quarter.

Given the disruption the Company experienced last year when it temporarily closed all its parks on March 16, 2020, the Company has provided a comparison of its financial results for the three and nine months ended September 30, 2021 to the three and nine months ended September 30, 2019.

Third Quarter 2021 Results Versus Third Quarter 2019 Results

In the third quarter of 2021, the Company hosted approximately 7.2 million guests, generated total revenues of $521.2 million, net income of $102.1 million and Adjusted EBITDA of $265.3 million. Attendance declined 0.9 million guests when compared to the third quarter of 2019 primarily due to reduced international visitation and group-related attendance. Attendance was also impacted by an unfavorable calendar shift and weather during the quarter. The increase in total revenue of $47.5 million compared to the third quarter of 2019 was primarily a result of increases in admission per capita (defined as admissions revenue divided by total attendance) and in-park per capita spending (defined as food, merchandise and other revenue divided by total attendance) partially offset by the decline in attendance. Admission per capita increased primarily due to the realization of higher prices in the Company's admission products resulting from its strategic pricing efforts, along with the net impact of the admissions product mix when compared to the third quarter of 2019. In-park per capita spending improved primarily due to increased guest spending, an improved product mix, higher realized prices and fees, new or enhanced and expanded in-park offerings and a strong consumer demand environment during the quarter compared to 2019.

Net income and Adjusted EBITDA were positively impacted by an increase in total revenue and a decrease in selling, general and administrative expenses partially offset by an increase in operating expenses (including certain non-recurring operating expenses). The decrease in selling, general and administrative expenses primarily relate to a targeted reduction in marketing related costs and the impact of cost savings and efficiency initiatives partially offset by an increase in non-cash equity compensation. Operating expenses for the third quarter of 2021 includes approximately $9.2 million of nonrecurring contractual liabilities and legal costs resulting from the temporary COVID-19 park closures. Operating expenses also increased due to incremental operating days and events, an increase in non-cash equity compensation expense and the timing of certain maintenance projects, partially offset by a net reduction in labor-related costs and other operating costs primarily resulting from structural cost savings initiatives.

First Nine Months 2021 Results Versus First Nine Months 2019

In the first nine months of 2021, the Company hosted approximately 15.2 million guests and generated total revenues of $1,132.9 million, record net income of $185.0 million and record Adjusted EBITDA of $509.3 million. Attendance declined 2.7 million guests when compared to the first nine months of 2019 primarily due to COVID-19 related impacts including capacity limitations and/or modified/limited operations at the Company's parks for most of the first nine months of 2021. The increase in total revenue of $32.7 million compared to the first nine months of 2019 was primarily a result of increases in admission per capita and in-park per capita spending partially offset by the decline in attendance. Admission per capita increased primarily due to the realization of higher prices in the Company's admission products resulting from its strategic pricing efforts, along with the net impact of the admissions product mix when compared to the first nine months of 2019. In-park per capita spending improved primarily due to increased guest spending, an improved product mix, higher realized prices and fees, new, enhanced or expanded in-park offerings and a strong consumer demand environment when compared to the first nine months of 2019.

Net income and Adjusted EBITDA were positively impacted by an increase in total revenue along with a decrease in operating expenses and selling, general and administrative expenses. The decrease in operating expenses is primarily due to a net reduction in labor-related costs and other operating costs primarily resulting from structural cost savings initiatives and the impact of modified/limited operations due to COVID-19, partially offset by certain nonrecurring contractual liabilities and legal costs impacted by the temporary COVID-19 park closures, operating costs associated with incremental operating days and events added in 2021 and an increase in non-cash equity compensation expense. The decrease in selling, general and administrative expenses is primarily due to a targeted reduction in marketing related costs and the impact of cost savings and efficiency initiatives, partially offset by an increase in non-cash equity compensation expense.

Share Repurchases

During the third quarter of 2021, the Company repurchased approximately 1.53 million shares of common stock at a total cost of approximately $82.7 million. As of September 30, 2021, the Company had approximately $154.9 million available for future repurchases under a previously authorized repurchase program.

Other

On July 14, 2021, the Company completed a partial redemption of $50.0 million of its Second-Priority Senior Secured Notes due 2025. On August 25, 2021, the Company completed a refinancing of its debt by issuing $725.0 million aggregate principal amount of 5.250% senior notes due 2029 and $1.2 billion in term loans and, using the proceeds of these issuances, along with cash on its balance sheet, redeemed $450.0 million aggregate principal amount of its then outstanding 9.500% Second-Priority Senior Secured Notes due 2025 and the Company's then existing term loan facility. In connection with the refinancing, the Company also refinanced and increased its revolving credit facility to $385.0 million.

As of September 30, 2021, the Company's total liquidity including available capacity under the Company's revolving credit facility was $918.1 million.

The Company generated record cash flow from operations of $416.4 million in the nine months ended September 30, 2021 compared to $313.7 million in the same period of 2019, an increase of $102.8 million. The Company generated record Free Cash Flow of $342.8 million in the nine months ended September 30, 2021 compared to $160.8 million in the same period of 2019, an increase of $182.0 million.

As of September 30, 2021, the Company's current deferred revenue balance was $173.4 million, an increase of approximately 51.4% when compared to September 30, 2019.

Read the entire press release on PR Newswire.

Sunday, November 21, 2021 9:42 PM

How much spaghetti can you throw at one wall? LOL

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Sunday, November 21, 2021 10:05 PM
Jeff's avatar

Has net revenue and EBITDA not decreased?


Jeff - Editor - CoasterBuzz.com - My Blog - Phrazy

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Sunday, November 21, 2021 10:34 PM
Fun's avatar

First it was per-cap, then revenue, and now its EBITDA? You keep changing the goal posts.

As we all know, EBITDA is down from 19 to 21, and chalking that up to operational limitations, commodity increases, wage pressures, and debt repayment make a million times more sense than yelling at the clouds about how their pass strategy at one park sucks.

By the way, a gold pass at CP currently costs $129. Up 30% since the promotional offer earlier this fall that got everyone all upset. https://www.cedarpoint.com/season-passes.

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Sunday, November 21, 2021 10:57 PM
Jeff's avatar

So net revenue and EBITDA going down is OK if you explain it?


Jeff - Editor - CoasterBuzz.com - My Blog - Phrazy

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Monday, November 22, 2021 12:40 AM

I think GoBucks question of how much spaghetti can you throw at the wall pretty much sums it up. lol

Going from season pass prices at one park - to admissions per caps - to revenue - to inflation - and now to EBITDA.

I am the one who brought up EBITDA and margins. For EBITDA to be down 6% while attendance was still only 82% of 2019 levels - the inflation that you like to discuss - added costs to operating in a Covid environment - and a 100% increase in seasonal labor hourly rate at your largest park (and 50% increases in hourly rates at nearly all other parks)...... and then following that quarter up with a 42% increase in revenue for the following month (with that comp against a previous record October)..... That's pretty damn good.

Again, sometimes it's OK to just say hey, I got this one wrong.

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Monday, November 22, 2021 9:22 AM
Jeff's avatar

But I don't believe that I'm wrong that this cheap pass strategy is wrong. I've never changed that argument.

Is a season of Cedar Point really less valuable than a day at Magic Kingdom?


Jeff - Editor - CoasterBuzz.com - My Blog - Phrazy

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Monday, November 22, 2021 12:12 PM

Some of the people responding to you here have the same belief. So its not a question of that. Its a question of whether there is anything in Cedar Fair's 3rd quarter financial results that supports that belief. There isn't. And there is actually some info in those results that is contra to your belief. Doesn't mean your belief is wrong though. They don't disclose per park results and we are talking short term at this point.

Value is in the eye of the beholder. And that issue is a well whipped, no longer breathing equine at this point here.

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Monday, November 22, 2021 4:30 PM

GoBucks said “But is there anything in Cedar Fair's 3rd quarter financial results that supports that belief.”

No, because again you can’t extrapolate how one park’s pass pricing affects the entire chain without individual park results.

It’s like saying ValleyFair! and Michigan’s Adventure must be raking in record per caps because Cedar Fair as a whole is doing record numbers. I would bet the lower tier parks are pretty much par for the course. You can’t extrapolate that information from chain-wide numbers.

Go Bucks said “They don't disclose per park results and we are talking short term at this point.”

OK good you do recognize they don’t report on a per-park basis. And as for the short-term comment, I’m pretty sure Jeff and I have said all along that this isn’t sustainable long term. Cheap pass plus crap experience has always popped a couple great years, and then folks realize that the juice ain’t worth the squeeze. Now your park isn’t even worth the discounted rates and you don’t have the hordes of people to make up the numbers. I’ve used the example of Darien Lake… I was a season pass holder every year since 1994, except in 2010 which was the year after my son was born. Darien Lake has been in a downward spiral for a long time. This year they offered season passes for $39.99, several other Six Flags parks did the same. The experience at Darien Lake has gone so far into the crapper that amongst my extended family, all 21 of us who have had passes for years finally said “No thank you” even at that ridiculously low price.

Last edited by ShaneDenmark, Monday, November 22, 2021 4:39 PM

But then again, what do I know?

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Monday, November 22, 2021 4:40 PM

Exactly to what GoBucks posted. I think the $99 Gold Pass strategy at Cedar Point is wildly silly (which the price is now at least $129). As I mentioned, Knott's was charging $85 for 7 hours worth of admission to their Haunt on a Saturday night this October - for both passholders and the general public - parking extra. Is 7 hours at Knott's Haunt only with $14 less than an entire year of access to Cedar Point, Cedar Point Shores and parking? No!!

But, the point is, against all of our expectations, Zimmerman and team are delivering. I don't understand how they are doing it - although I do think a lot of it can be explained by what someone else said earlier that we outside observers far overestimated the effect on Cedar Fair results the season pass price of a single park that historically has a low season pass base. Cedar Fair almost eliminated all other discounting for daily admissions.

You are of the belief the strategy doesn't work - and you can certainly have that belief - but the publicly available, SEC filed facts don't support that. The company is delivering results including double digit increases in admissions per cap and significant revenue growth. I will be interested to see their final 2021 revenue number - once the 42% October increase is taken into account plus if they have a strong Nov and Dec. Zimmerman will likely deliver a revenue increase in a Covid impacted year (no Q1 at all - largest seasonal park shut down through Q2 - 5 day/week operation at 3 other parks - 1 CP resort shut down all year) much higher than Ouimet ever did.

Again, Ouimet saved the company and was a transformational leader but just give credit where it's due - Cedar Fair is delivering against what we all expected.

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Monday, November 22, 2021 5:17 PM

Chicago007 said “Cedar Fair almost eliminated all other discounting for daily admissions.”

But hasn’t the biggest discount for single day admission always been right on the individual parks website?

Cedar Fair’s press release says “Chicago007 said “In-park per capita spending in the 2021 third quarter totaled a record $64.26, driven by increases in guest spending, particularly for admissions and extra-charge attractions.”

So if this includes admission and extra-charge attractions I guess CF really does NOT value their gate at all. Figure in all those single day (as much as $250) and all-season (as much as $1000) Fast Lanes, and this is kinda weak. If each person spends $35 (the price of an all-day dining plan) on food and drink, that leaves less than $30 for admission, games, merchandise, and upcharge attractions (think Fast Lane) per person. At that rate why not charge zero to get in and REALLY reap the benefits of in-park spending?


But then again, what do I know?

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Monday, November 22, 2021 5:40 PM

Chicago07 said:

But, the point is, against all of our expectations, Zimmerman and team are delivering.

I basically agree with this, and I also agree that they're way underpricing their product. I guess the way I'm trying to square this circle is by concluding that it's very hard to extrapolate from 2021 experience toward the future. If CF were still pricing gold passes at $99 (which I guess they're not doing*), would they still be able to show this kind of per capita revenue in 2022? I'm not convinced - and that's without opening the question of margins (which I think is a valid one).

Buuuut: In 2021, it seems their strategy basically worked, and what might have been a disastrous year was instead a success, in spite of all kinds of headwinds.

It leaves open the question of whether people had a good experience. Some may have paid $99 for a pass they used once, and won't do that again, especially at a higher price. And some may have gotten to the park, found it packed, and had a mediocre to lousy time.** It does seem like it might be hard to escape the cycle of cheapening your product and discounting it - how do you turn that around and convince people that the product has gotten better and is worth a higher price?

*I think the new price is still too low, but I like amusement parks enough to post on message boards with strangers, so I might not be the average customer.

**I was at Cedar Point on a July Saturday a few years ago, and if that had been my first visit it would have been my last.

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Monday, November 22, 2021 7:28 PM

Cedar Point has always been a cluster**** on Saturdays, that's been a thing for decades. I have a feeling many of the once a year/once every few years folks go expecting long lines, wait in a few of them, and are content with their day. They don't care enough to worry about anything but the fact that when they go, they had a decent time and rode a few big scary rides.

It's when you pack the park like a Saturday on other days with guests that aren't doing a whole lot of in park spending -and- lose sight of the fantastic ride efficiency that made a lot of those long lines tolerable. A 90 minute wait with non-stop three train ops is much easier to tolerate than one that could easily have been 50-60 minutes if the crew was getting trains out on interval.

But back to the cheap passes and subsequent overcrowding issue. Suddenly you have devalued and watered down a product that didn't need to be devalued. The Disney superfans are constantly accusing Disney of the latter, and they are raising prices to never before seen levels.

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Monday, November 22, 2021 8:29 PM
Jeff's avatar

I'm not sure what the executive team is delivering. For investors, they've under performed against the market at large over the last two years. Not that it was ever a growth stock, but still.

And we have no idea how they're measuring in public perception. Higher per-cap, lower attendance, you can roll with that for a year or two. But if people are like, it's crowded, the lines are slow and long, etc., that's not a recipe for repeat business.


Jeff - Editor - CoasterBuzz.com - My Blog - Phrazy

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Monday, November 22, 2021 9:16 PM

Oh look. More pasta.

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Monday, November 22, 2021 10:08 PM

^lol

Frankly, they are delivering better business results than Ouimet ever delivered. 2019 was the best year - in any measurement - in company history.

They are following that historically record year in 2021 with a 5% revenue increase through Q3 (even though there was NO Q1 in ‘21, their largest seasonal park was closed for both Q1 and Q2, 3 of their smaller parks were 5 day/week operation all season and 1 of their resort properties at CP was closed all year for renovation). They followed that with a 42% revenue increase for October - over the best October in company history in 2019.

And while managing EBITDA through Q3 of only being down 6% compared to the record 2019 - on 82% of the attendance - inflation on cost of products - increased cost in operating in Covid environment - and a 100% increase in the hourly rate for seasonal labor at Cedar Point and a 50% increase in hourly rate for seasonal labor at other large parks including Kings Island and Carowinds.

Again, did not expect this, but they are delivering in a big way.

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Tuesday, November 23, 2021 11:51 AM
eightdotthree's avatar

It seems we’re all convinced the CP experience is terrible. Granted all I have are anecdotes but people seem happy. I know I was this year. I think they’re moving away from needing a new thrill ride every time attendance is down and making the park and on-site lodging experience better. And while I am talking about lodging that **** isn’t cheap. For as cheap as the Gold Pass is, Hotel Breakers is the opposite. I expect their remodel of Castaway Bay to charge a premium as well.

Last edited by eightdotthree, Tuesday, November 23, 2021 11:52 AM
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Tuesday, November 23, 2021 12:11 PM

Chicago007 said: “Again, did not expect this, but they are delivering in a big way.”

Meh. Even a broken clock is right twice a day.

Jeff said: “Higher per-cap, lower attendance, you can roll with that for a year or two.”

Well, you CAN roll with that long term. Didn’t we used to call that the Gonch Business Plan a while back?

Jeff also said: “But if people are like, it's crowded, the lines are slow and long, etc., that's not a recipe for repeat business.”

This is the key to making the GBM above work. Your product better wow your customers or they aren’t gonna be your customers for long.


But then again, what do I know?

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Tuesday, November 23, 2021 12:42 PM

eightdotthree said:

It seems we’re all convinced the CP experience is terrible.

It's not terrible, but it's also not what it could/should be. The Bill Spehn years spoiled us when it came to rides operating as efficiently as they do in Orlando. The food options and overall guest offerings are better than ever. They just need to figure out a way to make the May and early June experience what the rest of the season is.

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