United Parks & Resorts(PRKS) - 2020 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Attendance in Q4 2020 decreased by approximately 2.5 million guests or 53% compared to the prior year quarter, showing an improvement from an 81% decline in Q3 2020 [37][38] - Revenue for Q4 2020 was $154 million, a decrease of $144 million or 48% compared to Q4 2019, primarily due to lower attendance [38] - Adjusted EBITDA for Q4 2020 was $22.7 million, a decline of $61.2 million compared to the prior year quarter, reflecting the impact of COVID-19 [43] - The net loss for Q4 2020 was $45.5 million, compared to a net loss of $24.2 million in Q4 2019 [42] Business Line Data and Key Metrics Changes - Total revenue per capita increased by 9.4% to $69.40 in Q4 2020, driven by strong improvements in both admissions and in-park spending [39] - Admissions per capita increased by 9.4% to $41.44, primarily due to higher prices in admission products [39] - In-park per capita spending increased by 9.5% to $27.96, attributed to increased guest spending and higher realized prices [40] Market Data and Key Metrics Changes - Monthly attendance trends showed a decline of 40% in October, 47% in November, and 44% in December, excluding parks in Virginia and California [19] - As of December 31, 2020, the current deferred revenue balance was $130.8 million, an increase of approximately 25% from December 2019 [51] Company Strategy and Development Direction - The company plans to have all 12 parks open for the full 2021 operating season, subject to local, state, and federal guidelines related to COVID-19 [15] - The company has implemented new operating calendars and year-round operations at several parks, indicating a shift towards more consistent revenue generation [13][14] - The focus remains on driving attendance and total revenue while eliminating unnecessary costs and identifying more efficient operational methods [59] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about attendance trends and the potential for revenue growth, particularly with the upcoming spring and summer seasons [78][80] - The company has identified approximately $100 million in cost savings from its 2019 cost base, which is expected to enhance profitability when attendance levels return to pre-pandemic levels [31][33] - Management emphasized the importance of safety and guest experience while implementing cost-saving measures [97] Other Important Information - The company reported a net loss for the fiscal year 2020 of $312.3 million, a significant decline from a net income of $89.5 million in 2019 [49] - The cash and cash equivalents balance as of December 31, 2020, was approximately $434 million, with total liquidity of about $745 million [54] Q&A Session Summary Question: Insights on higher per capita spending and cost savings - Management indicated that approximately half of the identified cost savings are fixed, while the other half is variable, which will return as attendance grows [68] Question: Impact of potential minimum wage increases on labor costs - Management acknowledged potential inflationary pressures but emphasized efforts to offset these costs through efficiencies and automation [72] Question: Indicators of demand for the back half of the year - Management noted that the pass base is at 70% of its peak in 2019, with strong early indicators for bookings and sales [78] Question: Current park mix and attendance trends - Management reported that local visitation was over 50% in Q4, with a meaningful amount of attendance still coming from outside local areas [86] Question: International expansion strategies - Management expressed interest in international opportunities, particularly in Abu Dhabi and potential markets like China [95] Question: Customer experience in light of labor efficiencies - Management assured that safety and guest experience remain priorities while implementing cost initiatives [97] Question: Capacity limits and trends in Orlando - Management stated that capacity limitations are driven by social distancing requirements, with expectations for gradual increases as guidelines change [105]