SeaWorld Entertainment reports higher revenue and net income despite lower attendance compared to 2019

Posted | 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 fourth quarter and fiscal year 2021.

Fourth Quarter 2021 Highlights

• Attendance was 5.0 million guests, an increase of 2.7 million guests from the fourth quarter of 2020. Compared to the fourth quarter of 2019, attendance increased by 0.3 million guests or 5.4%.
• Total revenue was a record $370.8 million, an increase of $216.7 million from the fourth quarter of 2020. Compared to the fourth quarter of 2019, total revenue increased by $72.8 million or 24.4%.
• Net income was a record $71.5 million, an increase of $117.1 million from the fourth quarter of 2020. Compared to the fourth quarter of 2019, net income increased by $95.7 million.
• Adjusted EBITDA was a record $152.8 million an increase of $130.0 million from the fourth quarter of 2020. Compared to the fourth quarter of 2019, Adjusted EBITDA increased by $68.8 million or 82.0%.
• Total revenue per capita increased 7.9% to $74.87 from the fourth quarter of 2020. Admission per capita increased 5.3% to $43.65 while in-park per capita spending increased 11.7% to $31.22 from the fourth quarter of 2020. Compared to the fourth quarter of 2019, total revenue per capita increased 18.1%, admission per capita increased 15.2%, and in-park per capita spending increased 22.3%.

Fiscal 2021 Highlights

• Attendance was 20.2 million guests, an increase of 13.8 million guests from fiscal 2020. Compared to fiscal 2019, attendance declined by 2.4 million guests or 10.7%.
• Total revenue was a record $1,503.7 million, an increase of $1,072.0 million from fiscal 2020. Compared to fiscal 2019, total revenue increased by $105.5 million or 7.5%.
• Net income was a record $256.5 million, an increase of $568.8 million from fiscal 2020. Compared to fiscal 2019, net income increased by $167.0 million or 186.7%.
• Adjusted EBITDA was a record $662.0 million. Compared to fiscal 2019, Adjusted EBITDA increased by $205.1 million or 44.9%.
• Total revenue per capita increased 9.9% to $74.43 from fiscal 2020. Admission per capita increased 5.2% to $42.17 while in-park per capita spending increased 16.5% to $32.26 from fiscal 2020. Compared to fiscal 2019, total revenue per capita increased 20.4%, admission per capita increased 18.9%, and in-park per capita spending increased 22.6%.

Other Highlights

The Company's current deferred revenue balance as of December 31, 2021, was $154.8 million, an increase of approximately 48.2% when compared to December 31, 2019.

The Company repurchased approximately 2.2 million shares of common stock at a total cost of approximately $133.0 million during the fourth quarter of 2021. In the fourth quarter of 2021, the Company came to the aid of almost 370 animals in need in the wild bringing the total number of animals it has helped over its history to almost 39,900.

"We are pleased to report another quarter of record financial results and record financial results for the fiscal year," said Marc Swanson, Chief Executive Officer of SeaWorld Entertainment, Inc. "In the fourth quarter and fiscal 2021, we delivered record revenue, record net income and record Adjusted EBITDA. We are especially pleased to deliver these record results, while continuing to operate in an environment with significant and unprecedented headwinds related to COVID-19. These results are a testament to the tireless work of our incredible team, the demonstrated resiliency of our business model and the continued successful implementation of our proven business plan and strategies. Our fourth quarter and fiscal year financial performance would have been even better if not for limited international guest attendance and reduced group-related attendance related to the impacts of COVID-19."

"While we have made good progress on our plans, as we look to the future, we continue to be highly confident that we can deliver even more operational and financial improvements that we expect will lead to meaningful increases in shareholder value. In particular, we believe our forward ride, attraction and park enhancement investment plans are the most robust they have ever been, and currently reflect the cadence, focus areas and strategies we have been working towards. We continue to improve our commercial functionality with investments in talent and capabilities in revenue management and marketing and have opportunities for continued improvement in these areas. We also continue to identify, track and execute on additional cost reduction and efficiency opportunities that we expect to continue to help offset inflationary pressures and lead to structurally improved profitability. With respect to our digital capabilities, including our mobile app and CRM implementations, we are encouraged by the early results and are in the very early innings of realizing the full potential. And, we continue to make progress on our inorganic growth initiatives related to hotels, new parks and international expansion and expect to have more to share later in the year," continued Swanson.

"We are also pleased to have ended 2021 in a particularly strong financial position, as a result of the proactive and decisive decisions made over the last couple of years as well as our record financial performance in 2021. Our available liquidity, including cash on our balance sheet and capacity on our revolver credit facility, was over $800 million and our total net leverage was less than 2.50x. Our strong financial position provides us significant flexibility to invest in our business, fund high growth ROI initiatives, consider strategic opportunities and / or return capital to our shareholders," concluded Swanson.

In 2021, the Company received numerous industry accolades including SeaWorld Orlando voted as #1 Nation's Best Amusement Park by USA Today readers; Aquatica Orlando voted as #1 for Nation's Best Outdoor Water Park by USA Today readers; and Busch Gardens Williamsburg named World's Most Beautiful Theme Park for the 31st year by the National Amusement Park Historical Association. In addition, the Mako rollercoaster at SeaWorld Orlando was ranked as the #1 Best Roller Coaster by USA Today readers. The Company also launched new iOS and Android mobile apps for all its parks in 2021 and completed what it believes to be the most significant transformation of its in-park venues as many were redesigned, refreshed or added across its parks in 2021.

For 2022, the Company believes it has the most exciting line-up of new rides, attractions, events and upgrades it has ever had in its history with something new and meaningful in every one of its parks, including, according to USA Today, 4 of the 9 most anticipated roller coasters of 2022 opening across its parks this year. Some of the Company's new rides and attractions include the following:

• Ice Breaker rollercoaster at SeaWorld Orlando, a quadruple launch coaster, featuring four airtime filled launches, both backwards and forwards, culminating in a reverse launch up a 93-foot vertical spike leading to the steepest beyond vertical drop in Florida – recently opened as one of the most anticipated roller coasters of the year.
• Iron Gwazi rollercoaster at Busch Gardens Tampa Bay, the tallest hybrid coaster in North America and the world's fastest and steepest hybrid coaster, with the world's tallest drop – opened on February 13th to select season pass holders and will open to all guests on March 11th. Iron Gwazi is another one of the most anticipated roller coasters of the year and what the Company believes could be the best roller coaster in the world.
• Emperor rollercoaster at SeaWorld San Diego, the tallest, fastest, longest and first floorless dive coaster on the West Coast - will open on March 2nd to select season pass holders and on March 12th to all guests and another one of the most anticipated roller coasters of the year.
• Pantheon rollercoaster at Busch Gardens Williamsburg, the world's fastest multi-launch coaster - will open on March 4th to select season pass holders and on March 25th to all guests and another of the most anticipated roller coasters of the year.
• Tidal Surge screaming swing at SeaWorld San Antonio, the world's tallest and fastest Screaming Swing - will open on February 26th to select season pass holders and on March 5th to all guests.
• Later this spring the Company will open the Big Bird's Tour Bus ride at Sesame Place Philadelphia, 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 San Antonio.

The Company is also excited about the opening of its newest park, the first new park it has opened in close to a decade, Sesame Place San Diego which will open on March 26th.

The Company's fourth quarter 2021 financial results continued to be impacted by the COVID-19 pandemic. While parks were open and operating without COVID-19 related-capacity limitations in the fourth quarter, 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 twelve months ended December 31, 2021, to the three and twelve months ended December 31, 2019.

Fourth Quarter 2021 Results Versus Fourth Quarter 2019 Results

In the fourth quarter of 2021, the Company hosted approximately 5.0 million guests, generated record total revenues of $370.8 million, record net income of $71.5 million and record Adjusted EBITDA of $152.8 million. Attendance increased 0.3 million guests, or 5.4%, when compared to the fourth quarter of 2019 due in part to the positive reception of the Company's holiday events, including new events during the quarter, along with increased demand and additional operating days, partially offset by reduced international guest visitation and group-related attendance, when compared to the fourth quarter of 2019. Excluding international guest visitation and group-related attendance, attendance in the fourth quarter increased by approximately 20% when compared to the fourth quarter of 2019.

The increase in total revenue of $72.8 million compared to the fourth quarter of 2019 was primarily a result of increases in admission per capita (defined as admissions revenue divided by total attendance), in-park per capita spending (defined as food, merchandise and other revenue divided by total attendance) and attendance. Admission per capita increased largely due to the realization of higher prices in the Company's admission products resulting from its strategic pricing efforts, partially offset by the net impact of the admissions product mix when compared to the fourth quarter of 2019. In-park per capita spending improved primarily due to a combination of factors including an improved product mix, higher realized prices and fees, and the impact of new, enhanced or expanded in-park offerings. The Company also benefitted from a strong consumer demand environment which contributed to higher guest spending levels during the quarter compared to 2019. The increases in net income and Adjusted EBITDA for the fourth quarter of 2021 were primarily impacted by an increase in total revenue when compared to the fourth quarter of 2019.

Fiscal 2021 Results Versus Fiscal 2019

In fiscal 2021, the Company hosted approximately 20.2 million guests and generated record total revenues of $1,503.7 million, record net income of $256.5 million and record Adjusted EBITDA of $662.0 million. Attendance declined 2.4 million guests when compared to fiscal 2019 primarily due to COVID-19 related impacts including capacity limitations and/or modified/limited operations at the Company's parks for part of 2021. Attendance was also impacted by a decline from international guest visitation and group-related attendance when compared to 2019. Excluding international guest visitation and group-related attendance, attendance increased by approximately 2% when compared to 2019.

The increase in total revenue of $105.5 million compared to fiscal 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 the Company's strategic pricing efforts, along with the net impact of the admissions product mix when compared to 2019. In-park per capita spending improved due to a combination of factors including an improved product mix, higher realized prices and fees, and the impact of new, enhanced or expanded in-park offerings when compared to 2019. The Company also benefited from a strong consumer demand environment which contributed to higher guest spending levels when compared to 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 when compared to 2019. 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 primarily relates to a targeted reduction in marketing related costs, a decrease in legal costs primarily related to a legal settlement charge in 2019, net of insurance recoveries, of approximately $32.1 million, a decline in third-party consulting costs and the impact of cost savings and efficiency initiatives. These factors were partially offset by an increase in non-cash equity compensation expense.

Share Repurchases

During the fourth quarter of 2021, the Company repurchased approximately 2.2 million shares of common stock at a total cost of approximately $133.0 million.

Other

As of December 31, 2021, the Company's current deferred revenue balance was $154.8 million, an increase of approximately 48.2% when compared to December 31, 2019.

Rescue Efforts

In the fourth quarter of 2021, the Company came to the aid of almost 370 animals in need, bringing the total number of animals it has helped over its history to almost 39,900 across a number of species including bottlenose dolphins, manatees, sea lions, seals, sea turtles, sharks, birds and more. As an example, the Company works closely with the Florida Fish and Wildlife Conservation Commission and in the past five years has helped over 250 manatees as their ecosystems continue to be threatened by humans. The Company manages one of the largest manatee rescue operations in the world and operates one of only five critical care facilities in the U.S.

The Company is a leader in animal rescue. Working in partnership with state, local and federal agencies, the Company's rescue teams are on call 24 hours a day, seven days a week, 365 days a year, including during the temporary park closures due to the COVID-19 pandemic. Consistent with its mission to protect animals and their ecosystems, rescue teams mobilize and often travel thousands of miles to help ill, injured, orphaned or abandoned wild animals in need of the Company's expert care, with the goal of returning then to their natural habitat.

Read the entire release on PR Newswire.