NEWS: SeaWorld signs letter of intent with Village Roadshow

[jedimaster1227]

http://money.cnn.com/news/newsfeeds/articles/prnewswire/FL89185.htm

 

ORLANDO, Fla., Aug. 13, 2014 /PRNewswire/ -- SeaWorld Entertainment, Inc. (NYSE: SEAS), a leading theme park and entertainment company, today reported financial results for the second quarter of 2014.

 

Release Overview

• Adjusted EBITDA[1] of $126.1 million versus $127.0 million in the second quarter of 2013
  
• Net income of $37.3 million versus a $15.9 million net loss in the second quarter of 2013
  
• The Company's Board of Directors authorized a $250 million share repurchase program effective January 1, 2015
  
• Entered into a Letter of Intent with Village Roadshow Theme Parks, a division of Village Roadshow Limited, a leading international entertainment and media company, to co-develop theme parks in Pan-Asia, India and Russia
  
• Discovery Cove was rated the number one amusement park in the world for the second consecutive year by TripAdvisor, the world's largest travel website

"We were pleased to report attendance growth in the quarter despite a challenging industry and competitive environment and a tough comparison to the prior year quarter, which included the attendance benefit from opening our largest expansion ever at SeaWorld Orlando. The increase in attendance results from the shift in the timing of Easter and favorable weather, partially offset by lower attendance at our destination parks," Jim Atchison, CEO and President of SeaWorld Entertainment, Inc. said. "In order to drive growth, we are undertaking a number of initiatives, including a detailed review of our Company-wide cost structure with the goal of driving significant cash cost savings in 2014 and 2015. Our intent is to re-invest these savings into additional new attractions at our destination parks and return capital to shareholders. We will announce more details on one of these ground-breaking investments in the coming days," he said.

 

"Turning to our international efforts, we continue to make significant progress in our plans to expand our theme parks outside the U.S. We recently signed a Letter of Intent with Village Roadshow Theme Parks, a division of Village Roadshow Limited, a leading international entertainment and media company, to co-develop theme parks in Pan-Asia, India and Russia. This Letter of Intent, along with our previously announced Memorandum of Understanding with our partner in the Middle East, creates exciting opportunities to extend our brands beyond our domestic borders," Atchison added.

 

Second Quarter 2014 Results

 

During the second quarter of 2014, the Company generated total revenue of $405.2 million, a decrease of $6.1 million, or 1%, compared to the same period in 2013. Adjusted EBITDA was $126.1 million, a decrease of $0.9 million, or 1%, compared to the second quarter of 2013. The Company reported net income of $37.3 million, or $0.43 per diluted share, and Adjusted Net Income of $37.4 million, or $0.43 per diluted share, for the second quarter of 2014. In the second quarter of 2013, the Company reported a net loss of $15.9 million, or $0.18 per diluted share, and Adjusted Net Income of $36.5 million, or $0.41 per diluted share. Cash flow from operating activities was $120.5 million in the second quarter of 2014 compared to $73.6 million in the second quarter of 2013.

 

The decrease in total revenue in the second quarter of 2014 was driven by a 1.8% decline in total revenue per capita from $62.67 in the second quarter of 2013 to $61.54 in the second quarter of 2014, offset by a 0.3% improvement in attendance.

 

Admission per capita, defined as admissions revenue divided by total attendance, decreased by 2.5% from $38.85 to $37.86 primarily as a result of an increase in promotional offerings and an unfavorable change in the park attendance mix. In-park per capita spending, calculated as food, merchandise and other revenue divided by total attendance, was essentially flat with a decline from $23.81 to $23.68.

 

Attendance for the quarter improved when compared to the second quarter of 2013, despite the comparable prior year quarter including the favorable attendance impact from the opening of Antarctica: Empire of the Penguin®, the Company's largest expansion ever at its SeaWorld Orlando park. Overall attendance for the quarter improved due to a shift in the timing of Easter into the second quarter in 2014 along with favorable weather compared to the same quarter in 2013. This increase was offset by lower attendance at the Company's destination parks due to a combination of factors, including a late start to summer for some schools in the Company's key source markets, new attraction offerings at competitor destination parks, and a delay in the opening of one of the Company's new attractions. In addition, the Company believes attendance in the quarter was impacted by demand pressures related to recent media attention surrounding proposed legislation in the state of California.

 

Year to Date Results

 

During the first half of 2014, the Company generated revenue of $617.4 million, a decrease of $32.5 million, or 5%, compared to the same period in 2013. Adjusted EBITDA was $111.0 million, a decrease of $27.0 million, or 20%, compared to Adjusted EBITDA of $138.1 million in the same period of 2013. The Company reported a net loss of $12.1 million, or a loss of $0.14 per diluted share, for the six months ended June 30, 2014. Adjusted Net Loss was $11.7 million, or a loss of $0.13 per diluted share. In the first half of 2013, the Company generated a net loss of $56.2 million, or a loss of $0.66 per diluted share, and Adjusted Net Loss was $2.7 million, or a loss of $0.03 per diluted share. Cash flow from operating activities was $133.5 million in the first half of 2014 compared to $97.7 million in the first half of 2013.

 

The decrease in revenue was driven by a 4.3% decline in attendance and a 0.7% decline in total revenue per capita from $64.59 in the first half of 2013 to $64.12 in the first half of 2014. Attendance for the first half of 2014 was largely impacted by a decrease at the Company's destination parks primarily in the second quarter as discussed in the preceding section.

 

Admission per capita decreased slightly by 0.8% from $40.49 in the first half of 2013 to $40.15 in the first half of 2014. In-park per capita spending also decreased slightly to $23.97 in the first six months of 2014 from $24.10 in the first six months of 2013.

 

Share Repurchase Program

 

The Company also announced that its Board of Directors has authorized the repurchase of up to $250 million of its common stock beginning on January 1, 2015. Under the repurchase program, the Company is authorized to repurchase shares through open market purchases, privately-negotiated transactions or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Securities Exchange Act of 1934. The repurchase program has no time limit and may be suspended for periods or discontinued at any time. The number of shares to be purchased and the timing of purchases will be based on the level of the Company's cash balances, general business and market conditions, and other factors, including legal requirements, debt covenant restrictions, and alternative investment opportunities.

 

"The Board's authorization of a share repurchase program reflects our confidence in the health and long-term outlook of the Company," Jim Atchison added. "With a strong balance sheet and cash flows, we believe we can take advantage of volatile market conditions to buy back our shares while maintaining the flexibility to make strategic investments in our future."

 

Other

 

In July, nine of the Company's eleven theme parks were recognized by TripAdvisor, the world's largest travel website, in their 2014 Travelers' Choice awards, based on millions of independent reviews and opinions from TripAdvisor travelers. Leading the way is Discovery Cove, the Company's all-inclusive, reservations-only day resort, which was named the number one amusement park in the world for the second consecutive year. In addition to Discovery Cove, the Company's three SeaWorld-branded parks and its two Busch Gardens-branded parks were ranked among the top-25 amusement parks in the U.S., while three of its water parks were among the top-25 water parks in the U.S.

Edited August 14, 2014 by jedimaster1227