United Parks & Resorts(PRKS) - 2023 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported record total revenue of $293.3 million for Q1 2023, an increase of $22.7 million or 8.4% compared to Q1 2022 [32] - Total revenue per capita increased by 9.2% to a record $86.84, driven by improvements in both admissions per capita and in-park per capita spending [34] - The company generated a net loss of $16.5 million for Q1 2023, compared to a net loss of $9 million in Q1 2022, while adjusted EBITDA reached a record $72.4 million, an increase of $6.5 million from the previous year [38][39] Business Line Data and Key Metrics Changes - Attendance decreased by 0.7% primarily due to adverse weather conditions, particularly in California, impacting peak visitation periods [33] - Admission per capita increased by 9.4% to a record $48.51, while in-park per capita spending rose by 8.9% to a record $38.33 [34] Market Data and Key Metrics Changes - The company noted that international attendance was up in Q1 2023 compared to 2022 but still down over 40% compared to 2019 [83] - Group bookings are trending well ahead of 2022 levels and are close to pre-COVID levels [85] Company Strategy and Development Direction - The company is excited about the opening of SeaWorld Abu Dhabi, the first SeaWorld branded park outside the U.S., expected to contribute single-digit millions to EBITDA this year [10][54] - Strategic initiatives include cost and efficiency improvements targeting $30 million to $50 million in savings, digital transformation efforts, and enhancing guest experiences through new rides and attractions [20][21][25][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver meaningful growth and new records in revenue and adjusted EBITDA for 2023, despite challenges such as adverse weather [31][50] - The company is optimistic about group booking trends and the upcoming summer season, anticipating a busy period with new attractions opening [9][10] Other Important Information - The company has a strong balance sheet with a net total leverage ratio of 2.7 times and approximately $426.4 million in total available liquidity [30][42] - The company plans to spend approximately $250 million to $275 million in CapEx for 2023, focusing on high-conviction growth and ROI projects [44] Q&A Session Summary Question: Weather impact on attendance - Management indicated that adverse weather in California resulted in a loss of over 100,000 in attendance, which could have shifted attendance from down 1% to potentially up low-single digits without the weather impact [51][52] Question: Financial impact of Abu Dhabi park - The Abu Dhabi park is expected to deliver low to mid-single-digit millions in EBITDA this year, with potential for growth as the park becomes operational [54][56] Question: Deferred revenue and pass sales - Management noted a nice increase in pass sales between March and April, with deferred revenue up 2% at the end of Q1 [58][61] Question: Group bookings and international visitation - Group bookings are performing well compared to 2022 and are close to pre-COVID levels, while international visitation remains down compared to 2019 [83][85] Question: Operating expenses and cost management - Management is targeting low single-digit expense growth while focusing on cost-saving initiatives to manage operating expenses effectively [80][81] Question: Hotel financing and attendance recovery - Management is excited about the hotel projects but has not finalized financing details, and they believe investments in parks and new attractions will help recover attendance [66][70] Question: Ride construction timing - The timing of new ride openings is more traditional this year compared to last year, with several anticipated rides set to open in the coming weeks [78][110]