Group 1 - United Parks and Resorts, formerly known as SeaWorld Entertainment, is identified as a high conviction investment opportunity [1] - The company underwent a name change in early 2024, reflecting a strategic shift in its branding [1] - The analysis emphasizes the importance of detailed examination of company financials, including balance sheets and income statements, to identify discrepancies between fundamental financials and market valuations [1] Group 2 - The analyst holds a beneficial long position in the shares of United Parks and Resorts, indicating confidence in the company's future performance [2] - The article expresses the analyst's personal opinions and is not influenced by external compensation, ensuring an unbiased perspective [2]

Core Points - SeaWorld Orlando is launching a promotion offering free draft beer for guests aged 21 and older, available daily from 12 p.m. until one hour before park close [1][4] - The park is hosting a Summer Spectacular celebration featuring new attractions, including a drone show and live entertainment [2][5] Promotions and Offers - Guests can enjoy one complimentary 7 oz. draft beer per visit, while Pass Members can receive up to two per day [1][4] - An Annual Pass promotion includes a free upgrade to the next tier, unlimited visits, and special benefits such as discounted drinks at select bars [5][6] New Attractions and Events - The newly opened Expedition Odyssey offers an immersive Arctic flying theater experience with real wildlife encounters [5] - A first-of-its-kind drone show will synchronize with music and transition into a fireworks display, enhancing the park's evening entertainment [5] - Other new shows include Hydro Surge, Baby Shark's Big Celebration, and fan-favorite events like the Shamu & Crew Parade and Rescue Tails [5] Company Overview - SeaWorld is a leading marine life theme park and accredited zoo, focusing on education and conservation of marine life [7] - The organization has rescued over 42,000 animals and has contributed more than $20 million to conservation efforts globally [7]

Group 1 - The stock of United Parks & Resorts Inc. (PRKS) is experiencing significant attention due to high implied volatility in the options market, particularly for the June 20, 2025 $30 Call option [1] - Implied volatility indicates the market's expectation of future price movement, suggesting that investors anticipate a substantial price change or an upcoming event that could trigger a rally or sell-off [2] - United Parks & Resorts holds a Zacks Rank 3 (Hold) in the Leisure and Recreation Services industry, which is in the top 37% of the Zacks Industry Rank [3] Group 2 - Over the past 60 days, there have been mixed changes in earnings estimates for United Parks & Resorts, with two analysts increasing and two decreasing their estimates, resulting in a slight decline in the Zacks Consensus Estimate from $1.76 to $1.74 per share [3] - The high implied volatility may indicate a potential trading opportunity, as options traders often seek to sell premium on options with high implied volatility, aiming for the underlying stock to not move as much as expected at expiration [4]

Core Insights - Busch Gardens Williamsburg has launched its newest family attraction, The Big Bad Wolf: The Wolf's Revenge, which is North America's longest family inverted coaster featuring over 2,500 feet of track and speeds up to 40 miles per hour [1][2] Group 1: Attraction Details - The ride is designed to provide a highly immersive experience set in a Bavarian village, where riders encounter a terrifying creature [1] - The coaster is accessible for children with a minimum height requirement of 42 inches when accompanied by an adult and 48 inches unaccompanied, making it suitable for families [1] Group 2: Opening and Reception - The park held a Grand Opening Ceremony that included a ribbon cutting, ceremonial first ride, and a DJ dance party, attended by local dignitaries and Wolf Scouts [2] - Early reviews from park members who previewed the ride were enthusiastic, indicating a strong positive reception and eagerness to experience the ride again [3] Group 3: Company Background - Busch Gardens Williamsburg is part of United Parks & Resorts Inc. and features over 100 acres of attractions, including top-rated roller coasters and award-winning entertainment [5]

Core Concept - Busch Gardens Tampa Bay is set to open Wild Oasis, a new immersive adventure realm for families, with previews for Pass Members starting May 30 and a full opening on June 6 [1][2]. Group 1: Wild Oasis Features - Wild Oasis is inspired by rainforests and includes animal encounters, rides, and interactive play zones designed for family entertainment [1][2]. - The new area will feature Habitat Hideaway, showcasing over 200 animal species, including capybaras, giant anteaters, squirrel monkeys, and tropical birds, with unique viewing perspectives [3]. - The Tree Top Drop, a 35-foot drop tower with multimedia experiences, will be introduced later in June, catering to younger thrill-seekers [4]. Group 2: Attractions and Activities - Wild Oasis will offer various attractions such as the Canopy Climb, an expansive climbing structure, and Enchanted Falls, an interactive splash pad for younger visitors [5]. - The Rainforest Quest will provide a self-guided educational scavenger hunt, promoting exploration and understanding of nature's interconnectedness [5]. Group 3: Annual Pass Benefits - Busch Gardens is promoting its Annual Pass program, which offers early access to Wild Oasis and significant savings during a limited-time Memorial Day Sale, with discounts up to 50% on tickets and passes [6]. - The Annual Pass includes benefits like unlimited year-round admission, free parking, in-park discounts, and monthly payment options starting at $15 [6]. Group 4: Company Overview - Busch Gardens Tampa Bay spans 300 acres and combines thrilling rides with an AZA accredited zoo featuring over 16,000 animals from more than 200 species, providing diverse experiences for all ages [8][9].

Group 1 - The core concern regarding United Parks & Resorts (NYSE: PRKS) is the uncertain demand outlook due to the upcoming launch of Universal's new attraction [1] - The investment approach focuses on identifying undervalued companies with long-term growth potential, emphasizing the importance of buying quality companies at a discount to their intrinsic value [1] Group 2 - There is no current stock, option, or similar derivative position in any of the companies mentioned, nor are there plans to initiate any such positions within the next 72 hours [2] - The article expresses personal opinions and does not involve compensation from any company mentioned [2]

[PART I. FINANCIAL INFORMATION](index=7&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Unaudited Condensed Consolidated Financial Statements](index=7&type=section&id=Item%201.%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) For Q1 2025, United Parks & Resorts reported decreased revenues and an increased net loss, with total assets slightly down and liabilities up, leading to a larger stockholders' deficit and reduced operating cash flow [Unaudited Condensed Consolidated Balance Sheets](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets slightly decreased to **$2.571 billion**, while total liabilities increased to **$3.049 billion**, resulting in a larger stockholders' deficit of **$478.3 million** Condensed Consolidated Balance Sheet Data (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$2,570,802** | **$2,573,578** | | Cash and cash equivalents | $75,665 | $115,893 | | Property and equipment, net | $1,898,395 | $1,887,283 | | **Total Liabilities** | **$3,049,087** | **$3,035,118** | | Deferred revenue (current) | $195,878 | $152,655 | | Long-term debt, net | $2,226,003 | $2,228,746 | | **Total stockholders' deficit** | **($478,285)** | **($461,540)** | [Unaudited Condensed Consolidated Statements of Operations](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended March 31, 2025, total revenues decreased by **3.5%** to **$286.9 million**, resulting in a net loss of **$16.1 million** and a diluted loss per share of **$0.29** Q1 2025 vs Q1 2024 Statement of Operations (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenues | $286,949 | $297,423 | | Operating Income | $16,888 | $22,141 | | Net Loss | ($16,133) | ($11,201) | | Net Loss Per Share, Diluted | ($0.29) | ($0.17) | | Weighted Average Shares, Diluted | 55,017 | 64,016 | [Unaudited Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities significantly decreased to **$25.7 million** in Q1 2025, while net cash used in investing activities decreased to **$56.9 million**, and net cash used in financing activities was **$9.0 million** Q1 2025 vs Q1 2024 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $25,715 | $71,446 | | Net cash used in investing activities | ($56,903) | ($87,360) | | Net cash used in financing activities | ($9,040) | ($27,296) | | **Change in Cash and Cash Equivalents** | **($40,228)** | **($43,210)** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, debt structure including **$1.53 billion** in Term B-3 Loans and **$725 million** in Senior Notes, recent refinancing, legal proceedings, and share repurchase programs - Revenue from annual/season passes is deferred and recognized over the term based on estimated redemption rates, which are derived from historical and forecasted attendance trends[33](index=33&type=chunk) - The company's effective tax rate for Q1 2025 was **6.2%**, compared to **33.4%** for Q1 2024, primarily due to state income taxes and deferred revaluation from state filing changes[44](index=44&type=chunk) - In December 2024, the company refinanced its existing Term B-2 Loans with approximately **$1.54 billion** of new Term B-3 Loans, which mature in December 2031 and have a lower applicable margin[54](index=54&type=chunk) - The jury returned a verdict in favor of the Company on all counts in the Quinton Burns v. SeaWorld case, with the plaintiffs' motion for a new trial denied and no appeal filed, concluding the matter[82](index=82&type=chunk)[83](index=83&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **3.5%** Q1 2025 revenue decrease to lower attendance and admission per capita due to calendar shifts, while operating expenses decreased, and Adjusted EBITDA declined to **$67.4 million** [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Total revenue for Q1 2025 decreased by **$10.5 million (3.5%)** due to a **1.7%** drop in attendance and a **4.2%** decrease in admission per capita, primarily from calendar shifts, partially offset by lower operating and SG&A expenses Key Operating Metrics (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Attendance (in thousands) | 3,391 | 3,450 | (1.7%) | | Total revenue per capita | $84.62 | $86.21 | (1.8%) | | Admission per capita | $46.04 | $48.06 | (4.2%) | | In-park per capita spending | $38.58 | $38.15 | 1.1% | - The decline in attendance and admission per capita was primarily due to an unfavorable calendar shift, with Easter and Spring Break holidays moving from Q1 in 2024 to Q2 in 2025[117](index=117&type=chunk) - Operating expenses decreased by **$3.6 million**, mainly due to a **$4.6 million** decrease in non-cash self-insurance adjustments[120](index=120&type=chunk) - Selling, general and administrative expenses decreased by **$3.7 million**, primarily due to a **$3.0 million** reduction in third-party consulting costs[121](index=121&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is supported by **$75.7 million** in cash and **$688.6 million** available under its revolving credit facility, despite a decrease in net cash from operations to **$25.7 million** and reduced capital expenditures of **$56.9 million** Capital Expenditures (in thousands) | Category | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Core | $49,851 | $60,108 | | Expansion/ROI projects | $7,052 | $27,178 | | **Total** | **$56,903** | **$87,286** | - As of March 31, 2025, the company had approximately **$688.6 million** available for borrowing under its Revolving Credit Facility[63](index=63&type=chunk)[137](index=137&type=chunk) - The company believes existing cash, cash flow from operations, and available borrowings will be adequate to meet its capital expenditures, debt service, and working capital needs for at least the next 12 months[128](index=128&type=chunk) [Adjusted EBITDA](index=33&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA for Q1 2025 decreased to **$67.4 million**, with Covenant Adjusted EBITDA for the last twelve months reaching **$703.7 million**, reflecting various non-cash and non-recurring adjustments from net loss Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | ($16,133) | ($11,201) | | Interest expense | $34,107 | $38,777 | | Depreciation and amortization | $41,695 | $39,182 | | Other adjustments | $8,746 | $14,495 | | **Adjusted EBITDA** | **$67,440** | **$79,154** | - Covenant Adjusted EBITDA for the last twelve months ended March 31, 2025, was **$703.7 million**, including add-backs for estimated cost savings (**$8.6 million**) and other adjustments (**$6.6 million**) as permitted by debt agreements[145](index=145&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from inflation impacting operating costs and interest rate fluctuations on its approximately **$1.5 billion** variable-rate debt, where a **100 basis point** increase in Term SOFR would raise annual interest expense by **$15.3 million** - Inflation affects costs for food, merchandise, fuel, construction, labor, utilities, and insurance[150](index=150&type=chunk) - A hypothetical **100 basis point (1%)** increase in the Term SOFR would increase the company's annual interest expense by approximately **$15.3 million**, assuming no borrowings on the revolving credit facility[153](index=153&type=chunk) [Item 4. Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control over financial reporting during the quarter - The company's principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of the end of the quarter[154](index=154&type=chunk) - No changes occurred in internal control over financial reporting during the quarter ended March 31, 2025, that materially affected, or are reasonably likely to materially affect, these controls[155](index=155&type=chunk) [PART II. OTHER INFORMATION](index=38&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 8 of the financial statements for details on legal proceedings, including the concluded Quinton Burns lawsuit and ongoing Sesame Workshop arbitration - For details on legal proceedings, the report refers to Note 8–Commitments and Contingencies in the financial statements[158](index=158&type=chunk) [Item 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) The company faces increased risk from unionization activities, with two employee groups totaling approximately **115 employees** voting in favor of unionization in 2025 - The company has experienced increased union organizing activities. In 2025, two groups of employees, impacting approximately **115 employees** in total, voted in favor of unionization[160](index=160&type=chunk) - There have been no other material changes to the risk factors disclosed in the company's Annual Report on Form 10-K[159](index=159&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 2025, the company repurchased **100,000 shares** for approximately **$4.6 million**, with **$32.6 million** remaining under the new **$500.0 million** share repurchase program Issuer Purchases of Equity Securities (Q1 2025) | Period | Total Shares Purchased | Average Price Paid per Share | Shares Purchased as Part of Publicly Announced Programs | | :--- | :--- | :--- | :--- | | Jan 1 - Jan 31, 2025 | 27 | $56.19 | — | | Feb 1 - Feb 28, 2025 | — | — | — | | Mar 1 - Mar 31, 2025 | 111,412 | $46.52 | 100,000 | | **Total** | **111,439** | | **100,000** | - During Q1 2025, the company repurchased **100,000 shares** for approximately **$4.6 million** under its new Share Repurchase Program, leaving about **$32.6 million** available under that program[164](index=164&type=chunk) [Item 5. Other Information](index=39&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the fiscal quarter ended March 31, 2025 - No director or officer adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the quarter[168](index=168&type=chunk)

Core Concept - SeaWorld Orlando has launched a new attraction called Expedition Odyssey, which offers an immersive Arctic experience combining advanced ride technology, real-world footage, and close encounters with Arctic wildlife [1][2][3] Attraction Features - Expedition Odyssey features a next-generation ride system with dynamic motion, providing a realistic experience as guests journey through glaciers, tundra, and the Arctic Ocean [2][3] - The attraction includes custom-shot video footage from remote Arctic locations, enhancing authenticity and guest immersion with wildlife such as polar bears, orcas, and beluga whales [3] Family-Friendly Experience - Designed for adventurers of all ages, Expedition Odyssey has a height requirement of only 39 inches, allowing families to enjoy the experience together [4] - The attraction is fully indoors, ensuring a year-round experience regardless of weather conditions [4] Animal Encounters - Guests can transition from the ride to real-life encounters with Arctic animals, including beluga whales, seals, and walruses [5] - A notable feature is Uki, an orphaned Pacific walrus calf, who is part of the attraction and provides a unique connection for guests [6] Additional Experiences - SeaWorld offers exclusive behind-the-scenes experiences, such as the Beluga Whales Up-Close Tour, allowing guests to learn about marine mammals [7] Promotional Offers - SeaWorld is currently running a Memorial Day Sale, offering up to 55% off on tickets, Fun Cards, and Annual Passes until May 18 [8][9] - The 2025 Fun Card is available for $139.99, providing park admission through December 31, 2025, at a lower price than a single-day ticket [9] Company Overview - SeaWorld is a leading marine life theme park and accredited zoo, focusing on education and conservation of marine life [10] - The organization has rescued over 42,000 animals and has contributed more than $20 million to marine conservation efforts globally [10]

Financial Performance - For the quarter ended March 2025, United Parks & Resorts reported revenue of $286.95 million, down 3.5% year-over-year [1] - EPS for the quarter was -$0.29, compared to -$0.17 in the same quarter last year [1] - The reported revenue was below the Zacks Consensus Estimate of $293.9 million, resulting in a surprise of -2.37% [1] - The company experienced an EPS surprise of -26.09%, with the consensus EPS estimate being -$0.23 [1] Key Metrics - Total revenue per capita was $84.62, below the four-analyst average estimate of $87.12 [4] - Attendance was reported at 3,391, slightly above the average estimate of 3,370 [4] - Admissions per capita stood at $46.04, compared to the three-analyst average estimate of $48.42 [4] - In-Park per capita spending was $38.58, below the three-analyst average estimate of $39.04 [4] - Food, merchandise, and other revenue totaled $130.83 million, compared to the $131.88 million average estimate, representing a change of -0.6% year-over-year [4] - Admissions revenue was $156.12 million, below the average estimate of $163.59 million, reflecting a change of -5.9% year-over-year [4] Stock Performance - Shares of United Parks & Resorts have returned +12.8% over the past month, outperforming the Zacks S&P 500 composite's +3.8% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Financial Data and Key Metrics Changes - Total revenue for the first quarter was $286.9 million, a decrease of $10.5 million or 3.5% compared to the first quarter of 2024 [18] - Net loss for the first quarter was $16.1 million, compared to a net loss of $11.2 million in the first quarter of 2024 [21] - Adjusted EBITDA was $67.4 million, a decrease of $11.7 million compared to the first quarter of 2024 [21] - Attendance decreased by approximately 59,000 guests or 1.7% compared to the prior year quarter, primarily due to the timing of Easter and spring break [18][19] Business Line Data and Key Metrics Changes - In-park per capita spending increased by 1.1% during the first quarter, marking growth for 19 of the last 20 quarters [6] - Admission per capita decreased by 4.2%, influenced by the admissions product mix and lower realized pricing [19] - Total revenue per capita decreased by 1.8% [19] Market Data and Key Metrics Changes - April 2025 attendance was up 8.1% compared to April 2024, indicating a positive trend moving into the second quarter [7] - Year-to-date attendance through April showed approximately 1.3% growth on a fiscal basis [19] Company Strategy and Development Direction - The company is focused on significant investments in new rides, attractions, and events to enhance guest experience and drive revenue [8][15] - Discussions are ongoing regarding the integration of branded hotels into parks and unlocking the value of owned real estate [12][15] - The company is exploring sponsorship opportunities, expecting to exceed $20 million in high-margin revenue over time [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving new records in revenue and adjusted EBITDA for 2025, with 75% of historical attendance and revenue opportunity still ahead [8][17] - The company is optimistic about the impact of new attractions and events, as well as the potential increase in attendance due to competitive market dynamics [34][65] Other Important Information - The company repurchased 100,000 shares for approximately $4.6 million during the first quarter [16][22] - The balance sheet remains strong, with a net total leverage ratio of 3.1 times and approximately $764 million in total available liquidity [15][22] Q&A Session Summary Question: How does the company plan to bridge the first quarter loss to expected EBITDA records? - Management highlighted strong April performance with attendance up over 8% and ongoing strategies to improve admissions per capita [30][34] Question: What was the impact of Easter on April attendance? - Management noted that April's attendance benefited from the Easter shift, with additional attendance beyond that expected from the holiday [41] Question: How is the company performing in international sales? - International ticket sales are up low single digits, with management indicating that international attendance does not significantly impact overall performance [52] Question: What are the expectations regarding labor costs due to competition from Epic? - Management acknowledged planned labor increases but emphasized effective management of costs to maintain guest experience [81] Question: What is the company's approach to capital allocation and buybacks? - Management stated that they are comfortable with the current leverage ratio and are focused on maximizing returns to shareholders through strategic capital allocation [86]