United Parks & Resorts(PRKS) - 2019 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company's net income for Q3 2019 was $98 million, an increase of $2 million or 2.1% compared to Q3 2018 [15][35] - Adjusted EBITDA for Q3 2019 was $206.9 million, a decline of $5.5 million compared to the prior year [15][36] - Year-to-date net income was $113.7 million, an increase of $57.8 million or 103.5% compared to the first nine months of 2018 [24][38] - Year-to-date adjusted EBITDA was $373 million, an increase of $36.3 million or 10.8% compared to the prior year [24][38] Business Line Data and Key Metrics Changes - Attendance in Q3 2019 was 8.1 million guests, down 221,000 guests or 2.6% from the prior year [16][27] - Total revenue for Q3 2019 was $473.7 million, a decrease of $9.5 million or 2% compared to Q3 2018 [30] - Total revenue per capita increased to $58.31 from $57.91 in Q3 2018, driven by a 3.9% increase in in-park spending [30][31] Market Data and Key Metrics Changes - Attendance was negatively impacted by weather conditions, with an estimated 330,000 visits lost due to unfavorable weather and a calendar shift [18][28] - The impact of Hurricane Dorian was estimated to have caused a shortfall of over 90,000 visits during the Labor Day weekend [17][29] Company Strategy and Development Direction - The company is focused on optimizing business operations and improving execution to unlock long-term potential [12][25] - Plans to build a second Sesame Place Park in Chula Vista, California, with an anticipated opening in spring 2021 [44][45] - The company aims to introduce a strong lineup of new rides and attractions across its parks in 2020, including several world-class coasters [47][50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the higher end of the adjusted EBITDA goal of $475 million to $500 million by the end of 2020 [43][132] - The company believes that despite the headwinds faced in Q3, there are significant opportunities for improved financial performance [25][42] Other Important Information - The company reported a current deferred revenue balance of $114.5 million, an increase of approximately 6% compared to Q3 2018 [40] - Total capital expenditures for the third quarter were approximately $153 million, with $137 million related to core CapEx [40][41] Q&A Session Summary Question: Can you elaborate on the $9.5 million marketing spend that was described as "undisciplined"? - Management acknowledged that the marketing spend did not yield a meaningful return and has since implemented better processes to manage marketing costs [60][61] Question: How did weather and calendar shifts impact attendance? - Management indicated that the attendance decline was primarily due to weather impacts and a calendar shift, estimating a total impact of 330,000 visits [68][69] Question: What are the expectations for cost savings in the upcoming quarters? - Management identified estimated cost savings of $14.9 million going forward and expressed confidence in exceeding the $50 million cost savings goal [76][123] Question: How is the performance of the Sesame Street area in Orlando? - Management reported positive performance in the Sesame area, despite weather challenges, and expressed satisfaction with its results [86] Question: What is the outlook for season pass sales? - Management noted an increase in premium pass holders compared to the previous year and expressed optimism about future sales [81][82]