On Aug. 5, 2021, SeaWorld Entertainment, Inc. (NYSE: SEAS), a leading theme park and entertainment company, released its financial results for the second quarter and first six months of fiscal year 2021. Notably, the Q2 reports indicated the company’s revenue, net income and adjusted EBITDA reached record levels.
Chief Executive Officer of SeaWorld Entertainment, Inc., Mark Swanson, noted the momentum the company experienced in Q1—which included generating positive adjusted net cash flow and an increased adjusted EBITDA—continued into the second quarter.
“Our strong financial performance through the first half of the year underscores both the resilience of our business and our commitment to emerge from this extraordinary environment as an even stronger and more profitable business,” Swanson said. “During the second quarter, we also generated record Free Cash Flow that further bolsters our already strong balance sheet. Our pricing and product strategies, along with the strong consumer demand environment, continued to drive higher realized pricing and strong guest spending, resulting in record total revenue per capita in the quarter.”
The company’s second quarter report included the following highlights:
- Attendance totaled 5.8 million guests, an increase of 5.5 million from the second quarter of 2020. Due to the impact of COVID-19-related elements, such as capacity limitations and/or modified and limited operations that were in place at parks during the first half of the year, attendance showed a decline of 0.7 million guests (10.1%), compared to the same quarter in 2019.
- Total revenue reached a record $439.8 million—an increase of $421.8 million from the second quarter of 2020 and $33.8 million (8.3%) from 2019. This increase is attributed primarily to increases in admission per capita and in-park per capita spending and is partially offset by the decline in attendance.
- Net income showed a record $127.8 million, up $258.8 million from the second quarter of 2020—and up $75.1 million (42.7%) from the second quarter of 2019.
- Adjusted EBITDA—which was positively impacted by an increase in total revenue and a decrease in operating expenses and selling, general and administrative expenses—was a record $218.8 million. This figure was an increase of $272.7 million from 2020’s second quarter. Compared to the second quarter of 2019, adjusted EBITDA increased by $69.1 million (46.2%).
- Total revenue per capita increased 14.2%, reaching a record $75.71, compared to the second quarter of 2020, and was 20.5% higher than in the second quarter of 2019.
- Admission per capita increased 16.5% to $41.87, due to the realization of the company’s strategic pricing efforts, along with the net impact of the admissions product mix. Compared to the second quarter of 2019, admission per capita increased 18.8%.
- Compared to the second quarter of 2020, in-park per capita spending grew 11.6% to $33.84. The company identified an increase in guest spending, higher realized prices and fees, an improved product mix, new or enhanced and expanded in-park offerings, and a strong consumer demand environment as factors that have influenced in-park per capita spending 22.7% rise since 2019.
- Cash flow from operations was a record $229.7 million for the three-month period that ended on June 30, 2021, while Free Cash Flow was a record $200 million for the same period.
Key takeaways from the first six months of SeaWorld Entertainment, Inc.’s 2021 fiscal year include:
- Attendance totaled 8 million guests, an increase of 5.4 million from the first six months of 2020. Attendance declined when compared to the first six months of 2019 by 1.8 million guests (18.1%) primarily to COVID-19-related capacity and other limitations that were in place at parks.
- Total revenue was $611.7 million, an increase of $440.1 million from the first six months of 2020. Compared to the first six months of 2019, total revenue declined by $14.9 million (2.4%)— in part because of the decline in attendance, partially offset by increases in admission per capita and in-park per capita spending.
- Net income reached a record level—$82.9 million—an increase of $270.4 million from the first six months of 2020. Net income was $67.2 million higher than in the first six months of 2019.
- Adjusted EBITDA was a record $244 million—a growth of $328.7 million from the first six months of 2020. Compared to the first six months of 2019, adjusted EBITDA increased by $77.9 million (46.9%).
- Total revenue per capita increased 15.1% from the first six months of 2020 to a record $76.24, a 19.3% rise from the same period in 2019.
- Admission per capita increased 9.2% to $42.25, while in-park per capita spending grew 23.5% to $33.99 during the first six months of 2020. Compared to the first six months of 2019, admission per capita showed a 16.1% increase, and in-park per capita spending rose 23.5%.
- Cash flow totaled $248.1 million for the three-month period that ended on June 30. The company’s Free Cash Flow equaled $203.1 million for the first six months of the year.
SeaWorld Entertainment, Inc.’s 2021 Q2 financial report also contained the following notable points:
- As of June 30, the company’s total available liquidity was $927.8 million, including $615.8 million of cash and cash equivalents on its balance sheet and $312.0 million available on its revolving credit facility.
- In the second quarter of 2021, the SeaWorld Rescue Team helped rescue almost 500 animals, bringing the total number of rescues to date to over 39,100.
In a keynote speech CEO Marc Swanson gave in April at the IAAPA Virtual Conference, he attributed the company’s ability to navigate the challenging 2020-2021 economic period to the collaborative efforts of its management team and board, including Scott Ross, Founder and Managing Partner of Hill Path Capital and Chairman of the Board of Directors of SeaWorld Entertainment, Inc.
“Having a large investor on the Board allowed us to align goals and move even more confidently and decisively,” Swanson said. “That collaboration allowed us to address our operational costs and maximize our financial flexibility, giving us some breathing room to make difficult decisions with some degree of confidence.”
According to CEO Marc Swanson, the company was able to quickly move to eliminate or defer non-essential expenses and substantially reduce or defer all capital spending by postponing most new rides from opening.
“Our partnership with our Chairman and our other board members allowed our company to adjust and move forward with more creativity and nimbleness than we had before,” Swanson said. “We were all in this together, and having our leadership team and board members in constant communication certainly allowed us to address this crisis head-on.”
In May, following the release of SeaWorld Entertainment, Inc. ‘s 2021 first quarter earnings, Scott Ross said the executive team played a key role in the organization’s performance and specifically mentioned CEO Marc Swanson and Chief Financial Officer and Treasurer Elizabeth Castro Gulacsy.
“Over the past year, Marc and Elizabeth, alongside the board, have continued to execute the strategic initiatives we have been working on over the past several years and have taken the necessary decisive actions to position the company for long-term success,” Scott Ross said. “We look forward to their continued leadership as we work together to emerge a stronger and more efficient company and realize the full, long-term potential of this great company and its irreplaceable assets and brands.”
SeaWorld Entertainment, Inc. also recently earned praise from USA Today’s readers, who voted SeaWorld Orlando the nation’s best amusement park and chose Mako as the top rollercoaster in the U.S.
“We are thrilled to receive these awards and proud of the ambassadors in our parks that help deliver amazing guest experiences,” CEO Marc Swanson said.
SeaWorld has a number of events planned at its parks in the coming months, including the daytime, family-oriented SeaWorld Spooktacular celebration and nighttime Howl-O-Scream event, which will be held at all Busch Gardens and SeaWorld parks—including, for the first time ever, at SeaWorld Orlando and SeaWorld San Diego.
SeaWorld Entertainment, Inc. is also planning to strategically add operating days in 2021. According to the company’s second quarter report, construction of SeaWorld Abu Dhabi, the first SeaWorld park to be located outside of the United States, is on track to be completed by the end of 2022.