United Parks & Resorts(PRKS) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Unaudited Condensed Consolidated Financial Statements 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 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 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 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 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] - 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] - 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] - 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][83] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 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 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] - Operating expenses decreased by $3.6 million, mainly due to a $4.6 million decrease in non-cash self-insurance adjustments[120] - Selling, general and administrative expenses decreased by $3.7 million, primarily due to a $3.0 million reduction in third-party consulting costs[121] Liquidity and Capital Resources 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][137] - 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] Adjusted EBITDA 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] Item 3. Quantitative and Qualitative Disclosures About Market Risk 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] - 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] Item 4. Controls and Procedures 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] - 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] PART II. OTHER INFORMATION Item 1. Legal Proceedings 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] Item 1A. Risk Factors 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] - There have been no other material changes to the risk factors disclosed in the company's Annual Report on Form 10-K[159] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 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] Item 5. Other Information 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]