Sunday, November 10, 2019

SeaWorld Entertainment Names New CEO + Heard On Quarter 3 2019 Earnings Call

SeaWorld Entertainment has had to name yet another CEO, this time Sergio D. Rivera has been given the company's top spot.

According to a press release from the company, "Mr. Rivera previously served as the President and Chief Executive Officer of ILG, Inc.'s Vacation Ownership Segment, where he was responsible for development, sales, marketing and resort operations.  Prior to ILG, Mr. Rivera was the President of the Americas for Starwood Hotels & Resorts Worldwide and was responsible for the performance and growth of Starwood's brands and its owned, managed and franchised businesses in North America, the Caribbean, Central and South America, and Polynesia."

So while not a direct connection to the theme park industry, he has had a lot of experience with vacationing, leisure and specifically hotels.  

SeaWorld also announced the addition of Ms. Neha Jogani Narang to the board of directors.  She was most recently a Director at Facebook, with an extensive history in consumer marketing and an apparent deep love of SeaWorld.

SeaWorld Entertainment's earnings release for the 3rd quarter of 2019 took place this past week as well, and the results were a bit disappointing, though the company's stock moved upward regardless.  In the quarter attendance decreased 2.6%, revenue decreased $9.5 million and adjusted EBITDA decreased by $5.5 million.

However looking at the year to date figures, things are still up overall.  For the first nine months of the year attendance only creased 0.3%, revenue increased by $8 million and adjusted EBITDA increased by $36.3 million.  Here's some notes from the company's conference call:

•  The company says some of the less than stellar results of the 3rd quarter are due to more rainy days in Florida, Hurricane Dorian scaring everyone away over Labor Day weekend, and a calendar shift that replaced a busy weekend day in '18 with a slow September weekday in '19.  

•  They also called themselves out for over spending about $9.5 million on marketing during the quarter due to "less disciplined management of certain marketing related costs."  Ouch, I bet someone got in some big trouble for that!

© SeaWorld Entertainment
• When weather was good the park performed strongly.  They had three days in July of near all time record attendance, and six days in the quarter of top 20 attendance totals.  In September they had "all time record breaking attendance at two of our larger parks."

• Halloween was successful this year as of the date of the call, the company noted that through November 3rd attendance and revenue were up quarter to date over 2018.

• Total capital expenditures for the 2019 season are expected to be $115 million in "core capital expenditures" and $30 - $35 million in "non-core" expenditures.  Non-core expenditures are tied to "expansion in return on investment" projects including new properties such as Sesame Place San Diego.

• Deferred revenue at the end of September is up 6%, which is mostly from an increase in season pass sales.  The company has also seen more people move from a "fun card" pass to a premium season pass product.

• The leadership was asked about capital spend in the future, since next year is so heavy on thrill rides.  They did say that they plan to continue special events at the park in addition to new rides.  But they did not mention spending on animal attractions at all.

© SeaWorld Entertainment
• There is a lot of excitement around the opening of a second Sesame Place park in San Diego in 2021.  According to the company's filings, they expect to spend up to $55 million completing their agreement with Seasme Workshop, the bulk of which is the new park.

• Next year almost every park will get a new ride or slide, the first time the company has done this.  This includes 4 new roller coasters, and slides at almost every water park.

• They expect to land in the higher end of the goal of $475 to $500 million in EBITDA by the end of 2020.