Posted
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.
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