10-Q: United Parks & Resorts Inc. Reports Q1 2025 Results: Revenue Declines Amid Calendar Shift

Sentiment:

Quarterly Report 12 May 2025 4:30 PM

📋All filings for United Parks & Resorts INC

United Parks & Resorts Inc. reports a decrease in revenue for the first quarter of 2025, primarily due to a shift in the timing of Easter and Spring Break holidays and a decline in attendance.

Worse than expectedThe company's net loss increased compared to the same quarter last year.Total revenue decreased due to lower attendance and admission per capita spending.

Summary

United Parks & Resorts Inc. reported a net loss of $16.133 million for the first quarter of 2025, compared to a net loss of $11.201 million in the same period of 2024.
Total revenue decreased by 3.5% to $286.949 million, driven by a 5.8% decrease in admissions revenue to $156.115 million.
Attendance declined by 1.7% to 3.391 million guests, impacted by an unfavorable calendar shift.
Admission per capita spending decreased by 4.2% to $46.04, while in-park per capita spending increased by 1.1% to $38.58.
Operating expenses decreased by 2.2% to $161.270 million, and selling, general, and administrative expenses decreased by 7.8% to $44.137 million.
Interest expense decreased by 12.0% to $34.107 million due to refinancing transactions completed in 2024.
The company repurchased 100,000 shares for approximately $4.6 million during the quarter, with $32.6 million remaining under the share repurchase program.
Adjusted EBITDA was $67.440 million, compared to $79.154 million in the first quarter of 2024.

Sentiment

Score: 4

Explanation: The report indicates a challenging quarter with decreased revenue and increased net loss, offset by some cost reductions and increased in-park spending. The outlook is cautiously optimistic, but the overall sentiment is slightly negative.

Positives

In-park per capita spending increased by 1.1% to $38.58.
Operating expenses decreased by 2.2% to $161.270 million.
Selling, general, and administrative expenses decreased by 7.8% to $44.137 million.
Interest expense decreased by 12.0% to $34.107 million due to refinancing transactions completed in 2024.

Negatives

Net loss increased to $16.133 million in Q1 2025 from $11.201 million in Q1 2024.
Total revenue decreased by 3.5% to $286.949 million.
Attendance decreased by 1.7% to 3.391 million guests due to unfavorable calendar shift.
Admission per capita decreased by 4.2% to $46.04.

Risks

The company acknowledges potential impacts from weather, natural disasters, labor shortages, inflationary pressures, supply chain issues, foreign exchange rates, and geopolitical events on attendance and guest spending.
Failure to retain and/or hire employees could impact operations and guest experience.
Increased union organizing activities could lead to labor disputes and affect profitability.
The company faces risks related to complex federal and state regulations governing animal treatment and potential actions from activist groups.
Cyber security risks and technology interruptions could impair access to websites and information technology systems.
Inability to compete effectively in the highly competitive theme park industry poses a risk.
Restrictions in debt agreements limit flexibility in operating the business.

Future Outlook

The company believes that existing cash and cash equivalents, cash flow from operations, and available borrowings under its revolving credit facility will be adequate to meet the capital expenditures, debt service obligations and working capital requirements of its operations for at least the next 12 months.

Management Comments

Certain members of our Board, including our Chairman of the Board, are actively involved in overseeing certain key operating activities and decisions.
We have spent significant time reviewing our operations and have identified meaningful cost savings opportunities, including technology initiatives, which we believe will further strengthen our business and, in some instances, improve guest experiences.

Industry Context

The theme park industry is seasonal in nature, with revenues typically concentrated in the second and third quarters.

Comparison to Industry Standards

Comparable companies in the theme park industry include Disney (DIS) and Six Flags (SIX).
Disney's theme park attendance and revenue are significantly higher due to its larger scale and global presence.
Six Flags, like United Parks & Resorts, experiences seasonality in its operating results.
Industry benchmarks for per capita spending and operating margins vary depending on the type of park and target audience.

Legal Proceedings

The company is involved in ongoing legal proceedings, including the Sesame Workshop arbitration and a purported class action lawsuit.
The company is subject to audits, inspections, and investigations by various federal and state regulatory agencies.

Stakeholder Impact

Shareholders may be concerned about the decreased revenue and increased net loss.
Employees may be affected by cost savings initiatives and potential unionization activities.
Customers may experience changes in park offerings and pricing.
Suppliers may be impacted by changes in the company's operations and spending.

Next Steps

The company will continue to monitor and manage the impacts of various external factors on attendance and guest spending.
The company plans to continue its cost savings initiatives and technology improvements.
The company will continue to evaluate opportunities for share repurchases.

Key Dates

Date	Description
December 1, 2009	Date of existing senior secured credit agreement.
April 30, 2020	SEA completed a private offering of $227.5 million aggregate principal amount of 8.750 % first-priority senior secured notes.
August 25, 2021	SEA entered into a Restatement Agreement and completed a private offering of $725.0 million aggregate principal amount of 5.250 % senior notes.
February 4, 2022	Sesame Workshop delivered notice asserting that the Company failed to pay an additional royalty payment for 2021 under its licensing agreement with the Company.
March 26, 2022	The Company opened the Standalone Park in San Diego.
June 9, 2022	SEA entered into an incremental amendment to the Amended and Restated Credit Agreement to increase the revolving facility commitments under the Revolving Credit Facility by $5.0 million.
June 27, 2022	Sesame Workshop initiated arbitration seeking a finding that its calculation of the amount of the 2021 royalty payment was correct.
July 27, 2022	A purported class action was filed in the United States District Court for the Eastern District of Pennsylvania against the Company.
August 2022	The Board of Directors approved a $250.0 million share repurchase program.
May 22, 2023	The arbitration panel made an award to Sesame Workshop for royalties, interest on the award, arbitration fees and expenses.
June 12, 2023	SEA further amended the Amended and Restated Credit Agreement to replace the LIBOR-based benchmark rates with Term SOFR-based benchmark rates.
January 22, 2024	SEA further amended the Amended and Restated Credit Agreement to incur an aggregate principal amount of approximately $1,173 million of Term B-2 Loans.
March 2024	The Company announced that its Stockholders and Board of Directors approved a new $500.0 million share repurchase program.
May 2, 2024	SEA further amended the Amended and Restated Credit Agreement to incur an aggregate principal amount of $380.0 million of Incremental Term B-2 Loans and completed the redemption for all of the $227.5 million aggregate principal amount of the First-Priority Senior Secured Notes.
August 23, 2024	SEA further amended the Amended and Restated Credit Agreement to increase the Revolving Credit Facility from $390.0 million to $700.0 million and extend the maturity thereof from August 25, 2026 to the earlier of (x) August 23, 2029 and (y) May 26, 2028.
August 27, 2024	The Court confirmed the arbitration award and entered final judgment on such award on September 30, 2024.
December 4, 2024	SEA further amended the Amended and Restated Credit Agreement to provide for the incurrence of an aggregate principal amount of approximately $1,542.3 million of Term B-3 Loans.
January 17, 2025	The Plaintiffs had thirty (30) days from the date of that order to file a Notice of Appeal. The deadline has passed, and the Plaintiffs did not file any such Notice.
March 3, 2025	Date of the company's Annual Report on Form 10-K filing.
March 31, 2025	End of the quarterly period for this report.
May 7, 2025	The registrant had outstanding 54,974,409 shares of Common Stock, par value $0.01 per share.
May 12, 2025	Date of this report.
August 23, 2029	The Revolving Credit Facility will mature.
December 4, 2031	The Term B-3 Loans will mature.
December 31, 2031	The License Agreement has an initial term through this date.

Keywords

United Parks & Resorts, Theme Parks, Financial Results, Attendance, Revenue, EBITDA, Share Repurchase, Debt, Seasonality, Risk Factors

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