Tuesday, August 11, 2020

Heard On... SeaWorld Entertainment's 2nd Quarter 2020 Earnings Call

© SeaWorld Entertainment

This week it was SeaWorld Entertainment's turn to report their 2nd quarter 2020 earnings, their full press release is available at this link.  It seemed like the market was anticipating these results even more than Six Flags or Cedar Fair, as they (along with Disney and Universal) give some insight to what's been happening in the all-important Orlando market.  The 2nd quarter still had very limited operations for SeaWorld Entertainment, with more 'guts' to be found in the 3rd quarter announcement this fall, but here are some notes from their earnings call:


• Attendance April through June was 300,000, 6.2 million visitors lower than last year.  Revenue was $18 million, down from $388 million last year.  The company's net loss was $131 million, and EBITDA for the quarter was a loss of $53.8 million.  Per capita spending was up 5.5% and in park per capita spending was up 10%.


• Deferred revenue from passes and other products was down almost 16% from a year ago.  The total pass base is down 31%.  However, parks that have been open in the quarter the pass base grew more than 10%.

SeaWorld San Diego

• As we saw with the other operators cash burn is a hot topic here too, and SeaWorld spent about $12 million a month in the quarter when all was said and done.


• As of the date of the earnings release they have reopened 9 of their 12 parks, with only SeaWorld San Diego, Aquatica San Diego and Water Country USA in Virginia not open (and those two water parks will not open at all in 2020 they confirmed).  In the second quarter they only got to have 7 parks open, and those parks had only 98 operating days total compared to last year with 12 parks and 861 operating days.

• Right now they are seeing positive cash flow at their operating parks.  They also are seeing positive trends as they reintroduce events and entertainment to draw visitors.  They are even adding more operating days and longer park hours at some properties.  There is also some small growth in season pass sales, and Discovery Cove bookings for 2021 are up over this time last year (quite a bit, 176% higher).


• More on increasing attendance - for parks that have been open at least 30 days so far they are seeing around a 15% increase in attendance from the week ended June 28th to the week ended August 2nd.  Both Sesame Place and Busch Gardens Williamsburg have had high demand since they reopened (both at the end of July) and are both adding more operating days.  It sounds like Busch Gardens Williamsburg will continue to do special events this year to keep the gates open, even with very limited capacity.


© Busch Gardens Tampa

• For operating parks overall they have been seeing attendance vary from 10-15% of last year's attendance on some days, all the way up to 50% on others.


• The company plans to hold both Halloween and winter Holiday events this year as they have in the past.  The events will be different to address safety concerns around COVID-19, but they are confident they and operate the events profitably.


• Due to selling notes and receiving a large sum from them, SeaWorld Parks & Entertainment appears to be on the lookout for parks that will be for sale due to their operators not being able to withstand these tough times.  What they're looking at are things like water parks, hotels or other small parks that could be converted into a Sesame Place.


• It was also noted that they believe they need to hit a out 40% of last year's revenue figures in order to be profitable overall for the year.


• Regarding capital expenditures.  They are about 87% complete with all the new rides that were supposed to be for 2020 but did not open, all of which have been pushed to 2021.  It will take another $15 million to finish those rides, but they still owe another $40 to $50 million on them as well - still to be paid.  No update was given on the conversion of Aquatica San Diego into Sesame Place San Diego.