Sunday, May 10, 2020

Heard On... SeaWorld Entertainment's 1st Quarter 2020 Earnings Call

© SeaWorld Entertainment
Rounding out our normal trio of amusement and theme park earnings reports that we like to cover here is SeaWorld Entertainment, which had their announcement and conference call late last week.  Here are some tidbits from the earnings call that I found interesting.

• For the full quarter revenues were $153.6 million, down $67 million.  EBITDA was a loss of $30.9 million, a decrease of $47.3 million.  Attendance decreased by 1 million visitors for a total of 2.3 million.  These figures, of course, include the parks closing mid-March.

• For the first two months of the year results were promising.  Attendance was up 200k guests, or 9%, to a record 1.9 million visitors.  Revenues for that period was up $13 million, or 12%, to a record $120.6 million.
© SeaWorld Entertainment
• Before the parks closed the company had finished about 90% of all of their new for 2020 rides and attractions.  This also includes two rides in Texas that actually opened before the parks had to close.  The company will evaluate whether to finish and open the remaining rides in 2020 or push them to 2021 depending on the timing of the parks reopening.

• SeaWorld Entertainment has completed a private offering of $227.5 million, which now gives them just over $400 million in cash and cash equivalents.  They will be spending about $20 to $25 million per month, which means they can survive into late 2021.

• At the end of February the company's season pass base was up 2% over the prior year.  By the end of March the base was down 9%, which is similar to what we've seen with Six Flags but not Cedar Fair.  Current passholders have been given a free tier upgrade for their loyalty.

© SeaWorld Entertainment
• SeaWorld leaders are positive about the parks being visited when they reopen.  They note that 85% of their visitors come from within driving distance to the parks, and even the Orlando parks have more than 50% of attendance from visitors living within driving distance.  The parks have significant "excess capacity" that will allow people to safely distance themselves when they are ready to visit.  They will also long term focus on "execution, enhancing marketing initiatives, pricing strategies and new rides, attractions, events and offerings in every park, every year."

• When asked about what attendance is needed to operate the parks profitably, they said SeaWorld Orlando is an example where some days have 30k visitors, but others in off season have 5k and they still know how to run things cost-wise to keep it profitable.  But it sounds like they've stripped down their costs to a point where there will be no 'fluff' left when the parks reopen.  That's to offset costs that will come on board from the pandemic.

© SeaWorld Entertainment
• When pushed, the company seems to believe that the Texas parks will open first, probably followed by Florida.  That also aligns with what we've heard from other operators, such as Six Flags.  In additional to what is now seemingly common disinfecting, reduced capacity, employee masks and temperature checks, they are also looking at a reservation system and more in-park app features.

• The process of converting Aquatica San Diego into Sesame Place for 2021 is currently paused due to State requirements.  They're waiting to see when they can restart work and that will determine whether the park still opens in 2021 or if it is pushed back.


Andrew said...

"Sand" Diego?! You're killing me with these puns, NPN! ;-)