News Quarterly Financial Results

[Zachary]

1. Shouldn't they have launched a "reputation building campaign" ages ago?

Here's the thing: They did. In fact, they've been at it for well over a year now. In just a couple of minutes I pulled together a few bits of evidence to show how SeaWorld has been continuously running an aggressive campaign to counter the movie with their own information:

• February 2013: SeaWorld sent their own review of Blackfish to 50 prominent movie critics before the film was ever shown to the public.
  
  

 

[Party Rocker]

Blackfish is an issue certainly; however, I'm no longer entirely sure that it's the issue. When things start to fall apart, it's a lot easier to blame a documentary that was created to attack you than than your own incompetence.

Keep in mind, they never originally claimed Blackfish had an impact. In fact, that is why their stockholders are furious with them. They kept blaming poor weather and the timing of Easter. It wasn't until their stockholders forced them to say Blackfish had some impact.

That said, I'm not convinced that anything they do can fix any damage done by Blackfish. It seems like most of the people who see the movie and make the effort to comment on their social media about it tend to attack them and stick to that belief as if it were strong scientific fact. I just don't believe SeaWorld can put anything out there that people (other than SeaWorld Supporters) will get behind and accept.

EDIT: I signed up for the SeaWorld Truth Team, and nothing ever happened. No continuing emails, absolute nothingness.

 

[Alf33]

Here's some of the numbers from their SEC filing.

Results Overview
Fourth Quarter 2014 versus Fourth Quarter 2013
Attendance of 4.4 million in 2014 versus 4.5 million in 2013.
Revenue of $264.5 million in 2014 versus $272.0 million in 2013.
Adjusted EBITDA[1] of $49.9 million in 2014 versus $46.6 million in 2013.
Net loss of $25.4 million, or a loss of $0.29 per diluted share in 2014 versus a net loss of $13.0 million, or a loss of $0.14 per diluted share in 2013.
Adjusted Net Loss of $17.8 million, or a loss of $0.21 per diluted share in 2014 versus an Adjusted Net Loss of $11.0 million, or a loss of $0.11 per diluted share in 2013.

Full Year 2014 versus Full Year 2013
Attendance of 22.4 million in 2014 versus 23.4 million in 2013.
Revenue of $1,377.8 million in 2014 versus $1,460.3 million in 2013.
Adjusted EBITDA of $370.1 million in 2014 versus $439.1 million in 2013.
Net income of $49.9 million, or $0.57 per diluted share in 2014 versus $51.9 million, or $0.59 per diluted share in 2013.
Adjusted Net Income of $59.4 million, or $0.68 per diluted share in 2014 versus Adjusted Net Income of $101.3 million, or $1.16 per diluted share in 2013.

A couple of other figures to throw out there.  Their long term debt dropped to $1.612b from $1.657b.  So they still have a ton of debt on the books.  Their Adjusted Free Cash Flow for '14 dropped to $107mil (rounded up) from $166mil in '13.

 

[Pucky]

If you look at the 4% drop in annual net income and the 6% drop in annual revenues, this looks bad. But, if you look at the 16% ($69MM) drop in EBITDA, it looks like a disaster. Basically, the point is that if SEAS hadn't incurred a $29MM loss by buying back notes, and if it hadn't had to make the prearranged $50MM payment to terminate its relationship with Blackstone, the net income for 2013 might have been tens of millions of dollars higher. If you take these irregular transactions into account when comparing 2013 and 2014, last year looks much worse than it does at first glance.

Sorry if I'm repeating things you already know, but I just thought I'd put that out there.

 

[Jonathan S]

1. Shouldn't they have launched a "reputation building campaign" ages ago?

Here's the thing: They did. In fact, they've been at it for well over a year now. In just a couple of minutes I pulled together a few bits of evidence to show how SeaWorld has been continuously running an aggressive campaign to counter the movie with their own information:

• February 2013: SeaWorld sent their own review of Blackfish to 50 prominent movie critics before the film was ever shown to the public.
  
  

 

[Party Rocker]

they should be protesting Blackstone, the management who has sucked the life out of these parks.

Woah, I wouldn't go so far as to say Blackstone is the source of poor management. I mean take a look at all their other endeavors. Clearly, Blackstone knows how to run a business and they know how to build them up. Also, at this point, Blackstone really shouldn't be a factor as they don't hold majority stock anymore. In fact, they gave up majority or decided to during the Fall of 2013.

Looking back, there are two issues that make this company different than many others. The first being, the Anheuser-Busch theme park division was not a profit seeking venture. They were using their parks for marketing their alcoholic products primarily. If the park's attendance had some decline or the parks profits were not above the budget there was no concern. However, the thing with business is that you have to make the most profit possible. When the parks were sold that was when they had to start making the most profit possible. I don't think the management was prepared to handle that. Which leads me to the second issue, the management was used to having a very powerful leader. They had control to do as they'd like, but they also had someone above them checking on them diligently to ensure things were running fine. The leader I speak of was the Busch family and then carrying onward was Blackstone. When SeaWorld Parks & Entertainment Corporate was formed, that same management was given more freedom in a sense to build the company up. Blackstone of course saw some of their plans and approved them, Verbolten and Mach Tower. However, Blackstone started to push the company towards a IPO and separating themselves from the company. In 2013 and continuing forward, we have seen the company under more control under the management and they have really been stuck on what to do. It truly is like they have no idea on how to handle the situations they got into, especially with Blackfish.

In summary, I feel the park was not meant to operate as an "as much profit as possible business" and is in turn having trouble doing so and the management just doesn't know how to operate the business as such as well as they don't know how to handle the pressure of operating the business.

For reference, when I say management I am referring to the current people who are local park executives and corporate executives who have actually worked throughout the company from the "Anheuser-Busch Period" to the "Blackstone Period" all the way to the current "SEAS Period". Anheuser-Busch and Blackstone I don't consider as management; actually, I prefer to think of them as owners. They had a huge leadership impact and kept the company on the road. Management is essentially driving drunk and if they don't just take a moment to sober up, they will end up crashing terribly.

 

[Alf33]

The company posted the results for the first quarter of 2015. In a nutshell attendance was up by 5.6%, revenue was up by 1% but there was still a net loss of $43.6mil for the quarter. The thing I find funny and disturbing is that they state that they returned $36.3mil to investors as dividends. If they didn't have to do this their net loss would only have been $7.3mil, and then that would have turned their adjusted loss into a small profit. Below is some of the text from their SEC filing.

"For the first quarter of 2015, the Company generated revenue of $214.6 million, an increase of $2.3 million, or 1%, versus the first quarter of 2014. Adjusted EBITDA was a loss of $3.8 million compared to a loss of $15.0 million in the first quarter of 2014. The Company reported a net loss of $43.6 million, or a loss of $0.51 per diluted share, in the first quarter of 2015. In the first quarter of 2014, the Company generated a net loss of $49.2 million, or a loss of $0.56 per diluted share. Net cash provided by operating activities was $37.7 million in the first quarter of 2015 compared to $13.0 million in the prior year first quarter. Free Cash Flow was a deficit of $3.0 million for the first quarter of 2015 compared to a deficit of $33.8 million in the first quarter of 2014.

The increase in revenue was driven by a 5.6% increase in attendance, offset by a total revenue per capita decrease of 4.2% to $66.77 from $69.72 in the first quarter of 2014. Admission per capita, defined as admissions revenue divided by total attendance, decreased by 5.6% to $42.58 in the first quarter of 2015 from $45.12 in the prior year first quarter primarily as a result of an increase in promotional offerings and passholder visitation along with park attendance mix impacts. In-park per capita spending, calculated as food, merchandise and other revenue divided by total attendance, decreased by 1.7% to $24.19 in the first quarter of 2015 compared to $24.60 in the prior year first quarter primarily due to strong passholder visitation for the quarter.

Attendance in the first quarter of 2015 increased due to the impact of an earlier Easter holiday and an overall improvement in demand. The earlier Easter timing caused a shift in the spring break holiday period for some schools in the Company’s key source markets, while the overall improvement in demand was driven by the Company’s consumer event programs, strong passholder visitation and increased promotional offerings."

 

[Jesy]

Dividends paid do not effect a corporation's loss as they (dividends) are not reported on an income statement. Therefore, the loss would have been 43.6M irrespective of any amount of dividends paid. For accounting purposes dividends are reported on the statement of changes in cash flow and statement of changes in stockholders' equity but do not effect income.

I have not looked into the financial statements of SEAS but viable corporations can report losses and still have positive cash flow; in fact it is prudent to minimize income so as to minimize taxes. For example, depreciation of assets is one way to increase your expenses while still maintaining a positive cash position.

I don't mean to speculate on SEAS financial viability but only to assert that the dividends paid with negative income isn't necessarily a bad thing. In fact if a company has had a history of a certain level of dividend payout, cessation or lowering of such can precipitate a negative change in stock price due to the company's signalling distress. Therefore change in historical dividend payouts should be lowered only when prudently necessary.

 

[Alf33]

Here's the company 2015 2nd quarter results (link). Basically there was a slight drop off in attendance for the quarter, but YTD attendance is still just above last year, and they turned a small profit.

Overview
• Reported an attendance decline in the second quarter due to the timing of Easter, record levels of rainfall in Texas and continued brand challenges in California, partially offset by improvements in demand at the Company’s other park locations, including Florida.
• Completed a debt refinancing, which, at current interest rates, should generate an average of $14.0 million in annual interest cost savings.
• Returned $54.5 million to shareholders through dividend declarations thus far in 2015.
• Reaffirmed full year 2015 Adjusted EBITDA guidance to be in the range of flat to up 3% versus 2014.

Second Quarter 2015 Results

During the second quarter of 2015, the Company generated revenue of $391.6 million, a decrease of $13.5 million, or 3%, versus the second quarter of 2014. Adjusted EBITDA was $100.2 million compared to $126.1 million in the second quarter of 2014. The Company reported net income of $5.8 million, or $0.07 per diluted share, and Adjusted Net Income of $18.7 million, or $0.22 per diluted share in the second quarter of 2015. In the second quarter of 2014, the Company generated net income of $37.4 million, or $0.43 per diluted share and Adjusted Net Income of $37.5 million, or $0.43 per diluted share. Net cash provided by operating activities was $104.4 million in the second quarter of 2015 compared to $120.5 million in the prior year second quarter. Free Cash Flow was $61.5 million in the second quarter of 2015 compared to $73.5 million in the prior year second quarter.

The decrease in revenue was driven by a 1.8% decrease in total revenue per capita along with a 1.6% decrease in attendance for the quarter. Total revenue per capita was $60.45 in the second quarter of 2015 compared to $61.54 in the second quarter of 2014. Admission per capita, defined as admissions revenue divided by total attendance, decreased by 2.8% to $36.81 in the second quarter of 2015 from $37.86 in the prior year second quarter primarily as a result of an increase in promotional offerings and passholder visitation along with an unfavorable change in the park attendance mix. In-park per capita spending, calculated as food, merchandise and other revenue divided by total attendance, remained relatively flat at $23.64 in the second quarter of 2015 compared to $23.68 in the prior year second quarter.

Attendance declined in the second quarter of 2015 due to an earlier Easter holiday, which caused a shift in the spring break holiday period for some schools in the Company’s key source markets. Also contributing to the decline was reduced attendance in Texas, primarily related to record levels of rainfall during the quarter along with reduced attendance in California, primarily related to brand challenges. The impact of these factors was partially offset by improvement in demand at the Company’s other park locations. The Company attributes the improvement in demand to increased promotional offerings, strong passholder visitation and consumer event programs during the period.

Adjusted EBITDA for the second quarter of 2015 decreased by $25.9 million primarily due to the decrease in revenue along with an increase in selling, general and administrative expenses. The increase in selling, general and administrative expenses was largely related to anticipated marketing costs associated with the Company’s reputation campaign as well as additional third party consulting costs.

 

[Nicole]

"brand challenges"

 

[UncleDuncan]

"brand challenges"

I was in San Diego last week (if that wasn't obvious), and SeaWorld is more-or-less giving away tickets for 20 or 25 dollars via hotel concierge service. I couldn't be bothered. I went to the Zoo instead.

 

[Jonathan S]

"brand challenges"

It's true though... Their brand is going to take years to recover, so therefore it is a brand challenge that needs to be addressed now. Yes, you're probably thinking that they should've done that a long time ago; but there's no time like the present.

 

[Thomas]

I don't think it's so much of a brand challenge as it is a brand opportunity.

 

[Ben]

http://time.com/3987998/seaworlds-profits-drop-84-after-blackfish-documentary/

Most of this was probably known but interesting read nonetheless

 

[tursiops]

It looks like SEAS ends the year pretty strong.
http://www.prnewswire.com/news-releases/seaworld-entertainment-inc-reports-revenue-of-137-billion-and-adjusted-ebitda1-of-3611-million-for-2015-300225968.html

 

[Alf33]

The bad news: For the first quarter of 2016 the company lost $84 million, which works out to $1/share.

The good news: Attendance climbed to 3.3 million from 3.21 million in the quarter. I found this little piece of info in their quarterly report that I found interesting. "Attendance improved in the first quarter of 2016 primarily due to the impact of an earlier Easter holiday along with additional operating days for our Virginia park location, and was largely offset by an overall decline in attendance at our Florida park locations". This is good to find out.

Along with that revenue increased to $220.2 million from $214.6 million as attendance improved and people spent more on food and merchandise.

 

[Username]

Just in case people didn't know, this is the first year that BGW had a three week Spring Break. They did that because the local school systems had a really weird week off this year that was inconsistent with most school systems.

 

[GoHokies87]

I wonder if the park was profitable on those extra days. It's always cool to see a park's schedule expand.

 

[Alf33]

Here's some info from the quarterly report for the 3rd quarter of this year.

"During the three months ended September 30, 2016, we hosted approximately 8.3 million guests in our theme parks, including approximately 1.1 million international guests, and generated total revenues of $485.3 million and net income of $65.7 million.  During the nine months ended September 30, 2016, we hosted approximately 17.6 million guests in our theme parks, including approximately 2.3 million international guests, generated total revenues of $1.08 billion and generated a net loss of $0.6 million."

"Attendance in the third quarter of 2016 declined by 30,000 guests, or 0.4%, and was primarily impacted by adverse weather at our Northeast park locations along with a decline in international attendance, mainly from the Latin America market which decreased by approximately 93,000 guests, or 28%, compared to the third quarter of 2015.  The impact of these factors was largely offset by increased attendance in Texas, which mainly benefited from the new gate at its water park, and increased attendance in Florida during the third quarter (an increase of approximately 46,000 guests).  We believe this improvement in Florida results from new attractions which helped drive domestic attendance despite a decline in international guests, an overall decline in hotel occupancy in the Orlando market and the effects of Hurricane Hermine at our Florida park locations."

"Looking ahead to the fourth quarter and 2017, we have introduced strategic season pass promotions and other ticket offers, expanded on our special events and announced an extensive 2017 new line-up of attractions, shows and events. We expect to invest approximately $175.0 million in capital spending on new attractions for 2017, one of the largest new attraction years in our more than 50 year history.  Based on early indicators, season pass sales appear to be strong as a result of the initiatives in place. However, we remain cautious as fourth quarter attendance was impacted early on by Hurricane Matthew in October which forced the closure of our parks in both Orlando and Williamsburg."

 

[Alf33]

The company has announced that the will have their 4th quarter and 2016 year end conference call on Tuesday, February 28, 2017 at 9 a.m. Eastern Time. It will naturally be broadcast live over the internet on the company’s website at www.seaworldentertainment.com by clicking on the Investor Relations link located on the upper right-hand corner of that page.

They did give this preliminary estimated info out on their SEC filing. This info is NOT official as it hasn't been audited by their internal auditors so it very well can change.

Full Year 2016 Preliminary Results
The company estimates that for the year ended December 31, 2016:

Total revenues are expected to be $1.344 billion.
Total attendance was approximately 22.0 million guests in 2016.

“In the fourth quarter, we continued to execute against our five point strategic plan, and we are encouraged to see the continued positive results of our efforts. We look forward to communicating more specifics during our earnings call next week, once our results are finalized, but based on our preliminary estimates, we expect to exceed the high end of the 2016 Adjusted EBITDA[1] guidance range provided in November 2016,” said Joel Manby, President and Chief Executive Officer of SeaWorld Entertainment, Inc. “We are also exploring a possible debt refinancing transaction in order to improve our capital structure by extending maturities and improving certain other terms of our debt.”

So we'll just have to wait until the 28th for the official figures and any news.