8-K: United Parks & Resorts Reports Record First Quarter Adjusted EBITDA Despite Weather Challenges

United Parks & Resorts announced record first-quarter adjusted EBITDA and revenue, driven by increased attendance and in-park spending, despite adverse weather conditions.

Summary

• United Parks & Resorts reported a 2.1% increase in attendance to 3.5 million guests in the first quarter of 2024 compared to the same period last year.
• Total revenue reached a record $297.4 million, a 1.4% increase year-over-year.
• The company experienced a net loss of $11.2 million, which is an improvement of $5.3 million compared to the first quarter of 2023.
• Adjusted EBITDA hit a record $79.2 million, a 9.3% increase from the first quarter of 2023.
• Excluding one-time revenue from SeaWorld Abu Dhabi, total revenue per capita increased by 1.2% and in-park per capita spending increased by 4.0%.
• Including the one-time revenue, total revenue per capita decreased by 0.7% to $86.21 and in-park per capita spending decreased by 0.5% to $38.15.
• Admission per capita decreased by 0.9% to $48.06.
• The company repurchased 375,000 shares for $20.2 million in the first quarter and an additional 1.5 million shares for $80.6 million after the quarter ended.
• United Parks & Resorts raised $380 million through an add-on to its existing loans and redeemed $227.5 million in senior secured notes.
• The company aided 173 animals in need during the quarter, bringing the total to over 41,000 animals helped throughout its history.

Sentiment

Score: 7

Explanation: The sentiment is positive due to record financial results and future growth plans, but tempered by a net loss and some negative per capita metrics. The company is showing improvement and is optimistic about the future.

Positives

• The company achieved record revenue and adjusted EBITDA for the first quarter.
• Attendance increased year-over-year despite adverse weather conditions.
• In-park per capita spending showed strong growth when excluding one-time revenue.
• The company has implemented a new $500 million share repurchase program and has already begun to buy back shares.
• The company successfully refinanced debt by raising $380 million and redeeming $227.5 million in notes.
• The company continues to be a leader in animal rescue, aiding 173 animals in the wild during the quarter.
• The company has an exciting line-up of new rides, attractions and events planned for 2024.

Negatives

• The company reported a net loss of $11.2 million for the quarter.
• Total revenue per capita and in-park per capita spending decreased when including one-time revenue.
• Admission per capita decreased by 0.9%.
• Adverse weather conditions negatively impacted attendance, particularly in Florida parks.

Risks

• The company is subject to various factors beyond its control that can affect attendance and guest spending, including weather, natural disasters, and economic conditions.
• The company faces risks related to labor shortages, inflationary pressures, and supply chain issues.
• The company is subject to complex regulations regarding animal treatment and faces potential legal challenges from activist groups.
• The company's performance is heavily reliant on key markets such as Florida, California, and Virginia.
• The company faces risks related to technology interruptions, cybersecurity, and data protection.
• The company operates in a highly competitive industry and must continue to innovate to maintain its market position.
• The company has a high fixed cost structure and is subject to seasonal fluctuations in operating results.
• The company's debt agreements impose restrictions on its operations.
• The company is exposed to interest rate risk and may face challenges in maintaining its credit ratings.

Future Outlook

The company expects to deliver new records in revenue and Adjusted EBITDA for 2024 and is excited about its plans for new rides, attractions, and events.

Management Comments

• We are pleased to report record financial results this quarter including record revenue and Adjusted EBITDA.
• While attendance in the quarter benefited from a positive calendar shift, this benefit was almost entirely offset by unusually wet and cold weather during the quarter.
• In-park per capita revenue, excluding the impact of certain one-time revenue, increased 4.0% during the quarter representing the 16th consecutive quarter of growth.
• Looking ahead, we are excited about our plans for 2024, with an exceptional line-up of new, one-of-a kind rides, attractions and events.
• We strongly believe we have a clear opportunity to drive meaningfully more attendance and total per capita spending and we have high confidence in our ability to continue to deliver operational and financial improvements that will lead to meaningful increases in shareholder value.
• We continue to expect to deliver new records in revenue and Adjusted EBITDA for 2024.
• I want to thank our stockholders and Board of Directors for their recent approval of our $500 million share repurchase program which we have already begun to implement and through which we are continuing our track record of returning meaningful capital to shareholders.

Industry Context

The results reflect the ongoing recovery of the theme park industry, with United Parks & Resorts showing resilience despite weather challenges. The focus on new attractions and events aligns with industry trends to drive attendance and spending.

Comparison to Industry Standards

• Compared to other major theme park operators like Disney and Universal, United Parks & Resorts' attendance growth of 2.1% is modest, but the record adjusted EBITDA suggests strong cost management and revenue optimization.
• The 4.0% increase in in-park per capita spending, excluding one-time revenue, is a positive indicator of the company's ability to drive revenue from existing customers, which is a key metric in the theme park industry.
• The company's focus on new attractions, such as the Catapult Falls and Penguin Trek, is consistent with industry best practices to attract and retain visitors.
• The share repurchase program is a common strategy among publicly traded theme park companies to return value to shareholders.

Stakeholder Impact

• Shareholders will benefit from the share repurchase program and the company's focus on increasing shareholder value.
• Employees will be involved in the launch of new attractions and events.
• Customers will experience new and improved offerings at the parks.
• Suppliers will benefit from the company's ongoing operations and capital expenditures.
• Creditors will be impacted by the company's debt refinancing.

Next Steps

• The company will continue to implement its $500 million share repurchase program.
• The company will launch new rides, attractions, and events throughout 2024.
• The company will continue to focus on driving attendance and per capita spending.
• The company will hold a conference call to discuss the results.

Key Dates

Keywords

theme parks, entertainment, attendance, revenue, EBITDA, share repurchase, animal rescue, per capita spending, debt, financial results