ORLANDO, Fla., Nov. 5, 2018 /PRNewswire/ -- SeaWorld
Entertainment, Inc. (NYSE: SEAS), a leading theme park and
entertainment company, today reported its financial results for the
third quarter and first nine months of 2018.
Third Quarter 2018 Highlights
- Attendance increased by 0.7 million guests, or 9.7%, to 8.3
million guests from the third quarter of 2017.
- Total revenue increased by $45.5
million, or 10.4%, to $483.2
million from the third quarter of 2017.
- Net income was $96.0 million,
compared to net income of $55.0
million in the third quarter of 2017. Net income for the
third quarter of 2018 includes approximately $3.9 million of restructuring charges as
discussed further below. Net income in the third quarter of 2017
includes approximately $5.1 million
of restructuring charges as discussed further below.
- Adjusted EBITDA[1] was $212.4
million, an improvement of $38.6
million, or 22.2%, over the third quarter of 2017.
First Nine Months 2018 Highlights
- Attendance increased by 1.4 million guests, or 8.7%, to 18.0
million guests from the first nine months of 2017.
- Total revenue increased by $94.4
million, or 9.5%, to $1.09
billion from the first nine months of 2017.
- Net income was $55.8 million,
compared to a net loss of $181.9
million in the first nine months of 2017. Net income for the
first nine months of 2018 includes approximately $34.0 million of certain pre-tax expenses as
discussed further below. Net loss in the first nine months of 2017
includes approximately $293.5 million
of certain pre-tax expenses, including a non-cash goodwill
impairment charge, as discussed further below.
- Adjusted EBITDA was $336.7
million, an improvement of $87.8
million, or 35.3%, over the first nine months of 2017.
Other Highlights
- The Company successfully completed a refinancing and amendment
to its credit facilities, which among other things, extended
maturities, removed financial covenants and generally provides
enhanced financial flexibility.
"We are pleased to report another quarter with strong financial
results," said John Reilly, Interim
Chief Executive Officer of SeaWorld Entertainment, Inc. "These
results continue to show the strength of our underlying business
model and the effectiveness of our strategic pricing strategies,
marketing and communications initiatives and the positive reception
of our new rides, attractions and events. We continued to see a
double-digit increase in season pass sales revenue this quarter,
further underscoring the effectiveness of our strategies.
Third quarter attendance and revenue growth demonstrated continued
strength during our peak summer season. Our increase in total
revenue per capita was driven by a 7.4% increase in in-park per
capita spending that was attributable to our improved culinary and
merchandise offerings and other in-park offerings including our
front of the line pass Quick Queue. And, as we have
communicated before, we remain laser focused on identifying and
executing on additional cost savings and creating efficiencies that
will improve our margins and lead to increased
profitability."
"We have just completed another successful season of Halloween
events and will soon begin our annual Christmas events across our
theme parks featuring Rudolph the Red-Nosed Reindeer™," continued
Reilly. "We are excited about bringing our guests what we
believe is the best holiday season entertainment value in the
industry. In addition, we recently announced our line-up of
new rides, attractions and events across our parks for 2019.
2019 will feature what I believe is our best line up ever of new
rides, attractions and events with a new ride, attraction or event
in almost every one of our 12 parks. We are looking forward to the
many brand new thrilling experiences coming to our parks next year.
We are also enthusiastic about our new season pass program.
In October, we introduced our new season pass structure and pricing
that makes our parks more affordable than ever before with
increased flexibility, more variety and the best and most valuable
benefits we have ever offered. We have significant scope to
improve our pass base and to increase loyalty among our guests and
the predictability and recurring nature of our revenues.
While we have delivered better financial results though the first
nine months of this year, as we have said all year, there is
significant additional opportunity for improvement. Our team
is committed to continue to drive top-line and bottom-line results
and to operating more efficiently than ever before, which we expect
will allow us to increase our operating margins and reach our 2020
goal of delivering $475 million to
$500 million of Adjusted
EBITDA. We are excited about the future and confident we will
continue to deliver operational and financial improvement leading
to increased shareholder value."
________________________________
1 This earnings release includes Adjusted EBITDA and
Free Cash Flow which are metrics that are not calculated in
accordance with Generally Accepted Accounting Principles in the
U.S. ("GAAP"). See "Statement Regarding Non-GAAP Financial
Measures" section and the financial statement tables for the
definitions of Adjusted EBITDA and Free Cash Flow and the
reconciliation of these measures for historical periods to their
respective most comparable financial measures calculated in
accordance with GAAP.
Third quarter 2018 Results
In the third quarter of 2018, the Company hosted approximately
8.3 million guests, generated total revenues of $483.2 million, net income of $96.0 million and Adjusted EBITDA of $212.4 million. Net income includes approximately
$3.9 million of pre-tax expenses
associated with separation-related costs. Net income in the
third quarter of 2017 includes approximately $5.1 million of pre-tax expenses associated with
separation-related costs in the third quarter of 2017.
The Company believes the improved attendance results from a
combination of factors including the Company's new pricing
strategies, new marketing and communications initiatives and the
positive reception of new rides, attractions and events.
Revenue was positively impacted by the strong increases in
attendance and in-park per capita spending (defined as food,
merchandise and other revenue divided by total attendance)
partially offset by lower admission per capita (defined as
admissions revenue divided by total attendance). The decline in
admission per capita primarily results from the impact of new
pricing strategies. Adjusted EBITDA was positively impacted
by increases in attendance, total revenue per capita and the impact
of an increased focus on cost efficiencies and the realization of
cost savings initiatives.
|
|
Three Months
Ended
September 30,
|
|
Change
|
|
|
2018
|
|
2017
|
|
%
|
(In millions,
except per share and per capita amounts)
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
$
|
483.2
|
|
$
|
437.7
|
|
10.4
|
%
|
Net income
|
|
$
|
96.0
|
|
$
|
55.0
|
|
74.4
|
%
|
Net income per share,
diluted
|
|
$
|
1.10
|
|
$
|
0.64
|
|
71.9
|
%
|
Adjusted
EBITDA
|
|
$
|
212.4
|
|
$
|
173.8
|
|
22.2
|
%
|
Net cash provided by
operating activities
|
|
$
|
140.6
|
|
$
|
99.5
|
|
41.4
|
%
|
Attendance
|
|
|
8.34
|
|
|
7.61
|
|
9.7
|
%
|
Total revenue per
capita
|
|
$
|
57.91
|
|
$
|
57.52
|
|
0.7
|
%
|
Admission per
capita
|
|
$
|
33.54
|
|
$
|
34.82
|
|
(3.7)
|
%
|
In-Park per capita
spending
|
|
$
|
24.37
|
|
$
|
22.70
|
|
7.4
|
%
|
Year-To-Date 2018 Results
In the first nine months of 2018, the Company hosted
approximately 18.0 million guests and generated total revenues of
$1.09 billion, net income of
$55.8 million and Adjusted EBITDA of
$336.7 million. Net income includes
approximately $34.0 million of
pre-tax expenses associated with separation-related costs and legal
settlements recorded in the first nine months of 2018. Net loss in
the first nine months of 2017 includes approximately $293.5 million of pre-tax expenses associated
with the following: (i) $269.3
million related to a non-cash goodwill impairment charge,
(ii) $8.4 million related to non-cash
equity compensation expense with respect to performance awards
which vested in the second quarter of 2017, (iii) $8.1 million related to a loss on early
extinguishment of debt and write-off of discounts and debt issuance
costs, (iv) $5.1 million related to
separation-related costs, and (v) $2.5
million related to a legal settlement accrual.
The Company believes the improved attendance results from a
combination of factors including the Company's new pricing
strategies, new marketing and communications initiatives and the
anticipation and reception of new rides, attractions and
events. Revenue was positively impacted by the strong
increases in attendance and in-park per capita spending partially
offset by lower admission per capita. The decline in admission per
capita primarily results from new pricing strategies.
Adjusted EBITDA was positively impacted by increases in attendance,
total revenue per capita and the impact of an increased focus on
cost efficiencies and the realization of cost savings
initiatives.
|
|
Nine Months
Ended
September 30,
|
|
Change
|
|
|
2018
|
|
2017
|
|
%
|
(In millions,
except per share and per capita amounts)
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
$
|
1,092.3
|
|
$
|
997.8
|
|
9.5
|
%
|
Net income
(loss)
|
|
$
|
55.8
|
|
$
|
(181.9)
|
|
NM
|
|
Net income (loss) per
share, diluted
|
|
$
|
0.64
|
|
$
|
(2.12)
|
|
NM
|
|
Adjusted
EBITDA
|
|
$
|
336.7
|
|
$
|
248.9
|
|
35.3
|
%
|
Net cash provided by
operating activities
|
|
$
|
267.5
|
|
$
|
187.8
|
|
42.4
|
%
|
Attendance
|
|
|
17.98
|
|
|
16.54
|
|
8.7
|
%
|
Total revenue per
capita
|
|
$
|
60.74
|
|
$
|
60.34
|
|
0.7
|
%
|
Admission per
capita
|
|
$
|
35.35
|
|
$
|
36.59
|
|
(3.4)
|
%
|
In-Park per capita
spending
|
|
$
|
25.39
|
|
$
|
23.75
|
|
6.9
|
%
|
Debt and Liquidity
As previously announced, on October 31,
2018, the Company successfully refinanced and amended its
existing senior secured credit agreement (the "Amended Credit
Agreement"). "We are very pleased to have successfully completed
this favorable refinancing and amendment to our existing credit
facilities," said Marc Swanson,
Chief Financial Officer of SeaWorld Entertainment, Inc. "The
transaction, among other things, extended the maturity of our term
loan and revolving credit agreement, eliminated almost all
financial covenants and generally provides enhanced financial
flexibility to our company."
As of September 30, 2018, the
Company's total net leverage ratio[2] as calculated
under the Senior Secured Credit Facilities was 3.40 to 1.00.
_______________________________
2 The Company's total net leverage ratio as of
September 30, 2018 is calculated by
dividing total net debt by the last twelve months Adjusted EBITDA
plus $27.7 million of estimated cost
savings (based on certain specified actions the Company has taken,
including restructuring and cost savings initiatives, which are
permitted to be added back to twelve-month Adjusted EBITDA under
the Company's Amended Credit Agreement) (see accompanying
tables).
Conference Call
The Company will hold a conference call today, Monday, November 5, 2018 at 9 a.m. Eastern Time to discuss its third quarter
2018 financial results. The conference call will be broadcast live
on the Internet and the release and conference call can be accessed
via the Company's website at
www.SeaWorldInvestors.com. For those unable to
participate in the live webcast, a replay will be available
beginning at 12 p.m. Eastern Time on
November 5, 2018 under the "Events
& Presentations" tab of www.SeaWorldInvestors.com. The
webcast replay will be available until the company's third quarter
2019 earnings conference call. A replay of the call can also
be accessed telephonically from 12 p.m.
Eastern Time on November 5,
2018 through 11:59 p.m. Eastern
Time on November 12, 2018 by
dialing (877) 344-7529 from anywhere in the U.S., (855) 669-9658
from anywhere in Canada, or (412)
317-0088 from international locations, and entering conference code
10125575.
Statement Regarding Non-GAAP Financial Measures
This earnings release and accompanying financial statement
tables include several supplemental non-GAAP financial measures,
including Adjusted EBITDA and Free Cash Flow. Adjusted EBITDA and
Free Cash Flow are not recognized terms under GAAP, should not be
considered in isolation or as a substitute for a measure of
financial performance or liquidity prepared in accordance with GAAP
and are not indicative of net income or loss or net cash provided
by operating activities as determined under GAAP. Adjusted EBITDA,
Free Cash Flow and other non-GAAP financial measures have
limitations that should be considered before using these measures
to evaluate a company's financial performance or liquidity.
Adjusted EBITDA and Free Cash Flow, as presented, may not be
comparable to similarly titled measures of other companies due to
varying methods of calculation.
Management believes the presentation of Adjusted EBITDA is
appropriate as it eliminates the effect of certain non-cash and
other items not necessarily indicative of a company's underlying
operating performance. Management uses Adjusted EBITDA in
connection with certain components of its executive compensation
program. In addition, investors, lenders, financial analysts and
rating agencies have historically used EBITDA-related measures in
the company's industry, along with other measures, to estimate the
value of a company, to make informed investment decisions and to
evaluate companies in the industry. The presentation of Adjusted
EBITDA also provides additional information to investors about the
calculation of, and compliance with, certain covenants in the
company's Senior Secured Credit Facilities. Adjusted EBITDA is a
material component of these covenants.
The financial statement tables that accompany this press release
include a reconciliation of Adjusted EBITDA, a non-GAAP financial
measure, to the applicable most comparable U.S. GAAP financial
measure for the three and nine-month periods ended September 30, 2018 and 2017. However, the Company
has not reconciled the forward-looking Adjusted EBITDA long-term
goal included in this press release to the most directly comparable
GAAP financial measure because this cannot be done without
unreasonable effort due to the seasonal nature of the Company's
business and the high variability, complexity and low visibility
with respect to amounts for disposition of assets, income taxes and
other expenses and adjusting items which are excluded from the
calculation of Adjusted EBITDA. For the same reasons, the Company
is unable to assess the probable significance of the unavailable
information, which could have a potentially significant impact on
its future GAAP financial results.
About SeaWorld Entertainment, Inc.
SeaWorld Entertainment, Inc. (NYSE: SEAS) is a leading theme
park and entertainment company providing experiences that matter,
and inspiring guests to protect animals and the wild wonders of our
world. The Company is one of the world's foremost zoological
organizations and a global leader in animal welfare, training,
husbandry and veterinary care. The Company collectively cares for
what it believes is one of the largest zoological collections in
the world and has helped lead advances in the care of animals. The
Company also rescues and rehabilitates marine and terrestrial
animals that are ill, injured, orphaned or abandoned, with the goal
of returning them to the wild. The SeaWorld® rescue team
has helped more than 33,000 animals in need over the last 50
years. SeaWorld Entertainment, Inc. owns or licenses a
portfolio of recognized brands including SeaWorld®,
Busch Gardens®, Aquatica®, Sesame
Place® and Sea Rescue®. Over its more than
50-year history, the Company has built a diversified portfolio of
12 destination and regional theme parks that are grouped in key
markets across the United States,
many of which showcase its one-of-a-kind zoological collection. The
Company's theme parks feature a diverse array of rides, shows and
other attractions with broad demographic appeal which deliver
memorable experiences and a strong value proposition for its
guests.
Copies of this and other news releases as well as additional
information about SeaWorld Entertainment, Inc. can be obtained
online at www.seaworldentertainment.com. Shareholders and
prospective investors can also register to automatically receive
the Company's press releases, SEC filings and other notices by
e-mail by registering at that website.
Rudolph the Red-Nosed Reindeer and all related elements © &
TM under license to Character Arts, LLC. All rights reserved.
Forward-Looking Statements
In addition to historical information, this press release
contains statements relating to future results (including certain
projections and business trends) that are "forward-looking
statements" within the meaning of federal securities laws. The
Company generally uses the words such as "might," "will," "may,"
"should," "estimates," "expects," "continues," "contemplates,"
"anticipates," "projects," "plans," "potential," "predicts,"
"intends," "believes," "forecasts," "future," "guidance,"
"targeted," "goal" and variations of such words or similar
expressions in this press release and any attachment to identify
forward-looking statements. All statements, other than statements
of historical facts included in this press release, including
statements concerning plans, objectives, goals, expectations,
beliefs, business strategies, future events, business conditions,
results of operations, financial position, business outlook,
earnings guidance, business trends and other information are
forward-looking statements. The forward-looking statements are not
historical facts, and are based upon current expectations,
estimates and projections, and various assumptions, many of which,
by their nature, are inherently uncertain and beyond management's
control. All expectations, beliefs, estimates and projections are
expressed in good faith and the Company believes there is a
reasonable basis for them. However, there can be no assurance that
management's expectations, beliefs, estimates and projections will
result or be achieved and actual results may vary materially from
what is expressed in or indicated by the forward-looking
statements.
These forward-looking statements are subject to a number of
risks, uncertainties and other important factors, many of which are
beyond management's control, that could cause actual results to
differ materially from the forward-looking statements contained in
this press release, including among others: a decline in
discretionary consumer spending or consumer confidence; various
factors beyond management's control adversely affecting attendance
and guest spending at the Company's theme parks, including the
potential spread of contagious diseases; any risks affecting the
markets in which the Company operates, such as natural disasters,
severe weather and travel-related disruptions or incidents;
increased labor costs and employee health and welfare benefits;
complex federal and state regulations governing the treatment of
animals, which can change, and claims and lawsuits by activist
groups; incidents or adverse publicity concerning the Company's
theme parks; any adverse judgments or settlements resulting from
legal proceedings as well as risks relating to audits, inspections
and investigations by, or requests for information from, various
federal and state regulatory agencies; cyber security risks and the
failure to maintain the integrity of internal or guest data;
inability to protect the Company's intellectual property or the
infringement on intellectual property rights of others; risks
associated with the Company's cost optimization program, capital
allocation plans, share repurchases and financing transactions; and
other risks, uncertainties and factors set forth in the section
entitled "Risk Factors" in the Company's most recently available
Annual Report on Form 10-K, as such risks, uncertainties and
factors may be updated in the Company's periodic filings with the
Securities and Exchange Commission ("SEC").
Although the Company believes that these statements are based
upon reasonable assumptions, it cannot guarantee future results and
readers are cautioned not to place undue reliance on these
forward-looking statements, which reflect management's opinions
only as of the date of this press release. There can be no
assurance that (i) the Company has correctly measured or identified
all of the factors affecting its business or the extent of these
factors' likely impact, (ii) the available information with respect
to these factors on which such analysis is based is complete or
accurate, (iii) such analysis is correct or (iv) the Company's
strategy, which is based in part on this analysis, will be
successful. Except as required by law, the Company undertakes no
obligation to update or revise forward-looking statements to
reflect new information or events or circumstances that occur after
the date of this press release or to reflect the occurrence of
unanticipated events or otherwise. Readers are advised to review
the Company's filings with the SEC (which are available from the
SEC's EDGAR database at www.sec.gov and via the Company's
website at www.seaworldinvestors.com).
SEAWORLD
ENTERTAINMENT, INC. AND SUBSIDIARIES
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands,
except per share amounts)
|
|
|
|
|
For the Three
Months
Ended September 30,
|
|
Change
|
|
|
For the Nine
Months Ended
September 30,
|
|
Change
|
|
|
|
2018
|
|
2017
|
|
$
|
|
%
|
|
|
2018
|
|
2017
|
|
$
|
|
%
|
|
Net
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Admissions
|
|
$
|
279,873
|
|
$
|
264,967
|
|
$
|
14,906
|
|
|
5.6
|
%
|
|
$
|
635,682
|
|
$
|
605,007
|
|
$
|
30,675
|
|
|
5.1
|
%
|
Food, merchandise and
other
|
|
|
203,302
|
|
|
172,745
|
|
|
30,557
|
|
|
17.7
|
%
|
|
|
456,580
|
|
|
392,812
|
|
|
63,768
|
|
|
16.2
|
%
|
Total
revenues
|
|
|
483,175
|
|
|
437,712
|
|
|
45,463
|
|
|
10.4
|
%
|
|
|
1,092,262
|
|
|
997,819
|
|
|
94,443
|
|
|
9.5
|
%
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of food,
merchandise and other
revenues
|
|
|
36,062
|
|
|
31,988
|
|
|
4,074
|
|
|
12.7
|
%
|
|
|
85,012
|
|
|
75,532
|
|
|
9,480
|
|
|
12.6
|
%
|
Operating expenses
(exclusive of depreciation and
amortization shown separately below and includes
equity compensation of $2,119 and $976 for the
three months ended September 30, 2018 and 2017,
respectively, and $6,350 and $5,830 for the nine
months ended September 30, 2018 and 2017,
respectively)
|
|
|
198,781
|
|
|
194,802
|
|
|
3,979
|
|
|
2.0
|
%
|
|
|
544,354
|
|
|
541,395
|
|
|
2,959
|
|
|
0.5
|
%
|
Selling, general and
administrative (includes equity
compensation of $3,064 and $2,269 for the three
months ended September 30, 2018 and 2017,
respectively, and $12,270 and $13,435 for the nine
months ended September 30, 2018 and 2017,
respectively)
|
|
|
51,549
|
|
|
54,770
|
|
|
(3,221)
|
|
|
(5.9)
|
%
|
|
|
186,076
|
|
|
176,340
|
|
|
9,736
|
|
|
5.5
|
%
|
Goodwill impairment
charges(a)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
269,332
|
|
|
(269,332)
|
|
NM
|
|
Restructuring and
other separation costs (b)
|
|
|
3,866
|
|
|
5,100
|
|
|
(1,234)
|
|
|
(24.2)
|
%
|
|
|
16,392
|
|
|
5,100
|
|
|
11,292
|
|
NM
|
|
Depreciation and
amortization
|
|
|
41,187
|
|
|
42,230
|
|
|
(1,043)
|
|
|
(2.5)
|
%
|
|
|
119,635
|
|
|
120,597
|
|
|
(962)
|
|
|
(0.8)
|
%
|
Total costs and
expenses
|
|
|
331,445
|
|
|
328,890
|
|
|
2,555
|
|
|
0.8
|
%
|
|
|
951,469
|
|
|
1,188,296
|
|
|
(236,827)
|
|
|
(19.9)
|
%
|
Operating income
(loss)
|
|
|
151,730
|
|
|
108,822
|
|
|
42,908
|
|
|
39.4
|
%
|
|
|
140,793
|
|
|
(190,477)
|
|
|
331,270
|
|
NM
|
|
Other income,
net
|
|
|
(59)
|
|
|
(108)
|
|
|
49
|
|
|
45.4
|
%
|
|
|
(38)
|
|
|
(111)
|
|
|
73
|
|
|
65.8
|
%
|
Interest
expense
|
|
|
19,500
|
|
|
20,160
|
|
|
(660)
|
|
|
(3.3)
|
%
|
|
|
59,974
|
|
|
57,873
|
|
|
2,101
|
|
|
3.6
|
%
|
Loss on early
extinguishment of debt and write-off of
discounts and debt issuance costs
(c)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
8,143
|
|
|
(8,143)
|
|
NM
|
|
Income (loss) before
income taxes
|
|
|
132,289
|
|
|
88,770
|
|
|
43,519
|
|
|
49.0
|
%
|
|
|
80,857
|
|
|
(256,382)
|
|
|
337,239
|
|
NM
|
|
Provision for
(benefit from) income taxes
|
|
|
36,301
|
|
|
33,736
|
|
|
2,565
|
|
|
7.6
|
%
|
|
|
25,016
|
|
|
(74,437)
|
|
|
99,453
|
|
NM
|
|
Net income
(loss)
|
|
$
|
95,988
|
|
$
|
55,034
|
|
$
|
40,954
|
|
|
74.4
|
%
|
|
$
|
55,841
|
|
$
|
(181,945)
|
|
$
|
237,786
|
|
NM
|
|
Earnings (loss)
per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) per share, basic
|
|
$
|
1.11
|
|
$
|
0.64
|
|
|
|
|
|
|
|
|
$
|
0.65
|
|
$
|
(2.12)
|
|
|
|
|
|
|
|
Net income (loss) per
share, diluted
|
|
$
|
1.10
|
|
$
|
0.64
|
|
|
|
|
|
|
|
|
$
|
0.64
|
|
$
|
(2.12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares
outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
86,616
|
|
|
86,012
|
|
|
|
|
|
|
|
|
|
86,410
|
|
|
85,712
|
|
|
|
|
|
|
|
Diluted
(d)
|
|
|
87,542
|
|
|
86,284
|
|
|
|
|
|
|
|
|
|
87,029
|
|
|
85,712
|
|
|
|
|
|
|
|
SEAWORLD
ENTERTAINMENT, INC. AND SUBSIDIARIES
UNAUDITED
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(In
thousands, except per share amounts)
|
|
|
|
|
For the Three
Months
Ended September 30,
|
|
Change
|
|
|
For the Nine
Months
Ended September 30,
|
|
Change
|
|
|
Last
Twelve
Months
Ended
September
30,
|
|
|
2018
|
|
2017
|
|
$
|
|
%
|
|
|
2018
|
|
2017
|
|
$
|
|
%
|
|
|
2018
|
Net income
(loss)
|
|
$
|
95,988
|
|
$
|
55,034
|
|
$
|
40,954
|
|
|
74.4
|
%
|
|
$
|
55,841
|
|
$
|
(181,945)
|
|
$
|
237,786
|
|
|
NM
|
|
|
$
|
35,400
|
Provision for
(benefit from) income taxes
|
|
|
36,301
|
|
|
33,736
|
|
|
2,565
|
|
|
7.6
|
%
|
|
|
25,016
|
|
|
(74,437)
|
|
|
99,453
|
|
|
NM
|
|
|
|
14,447
|
Loss on early
extinguishment of debt
and write-off of discounts and debt
issuance costs (c)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
8,143
|
|
|
(8,143)
|
|
NM
|
|
|
|
—
|
Interest
expense
|
|
|
19,500
|
|
|
20,160
|
|
|
(660)
|
|
|
(3.3)
|
%
|
|
|
59,974
|
|
|
57,873
|
|
|
2,101
|
|
|
3.6
|
%
|
|
|
80,102
|
Depreciation and
amortization
|
|
|
41,187
|
|
|
42,230
|
|
|
(1,043)
|
|
|
(2.5)
|
%
|
|
|
119,635
|
|
|
120,597
|
|
|
(962)
|
|
|
(0.8)
|
%
|
|
|
162,332
|
Goodwill impairment
charges(a)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
269,332
|
|
|
(269,332)
|
|
NM
|
|
|
|
—
|
Equity-based
compensation expense (e)
|
|
|
5,183
|
|
|
3,245
|
|
|
1,938
|
|
|
59.7
|
%
|
|
|
18,620
|
|
|
19,265
|
|
|
(645)
|
|
|
(3.3)
|
%
|
|
|
22,558
|
Loss on impairment or
disposal of assets (f)
|
|
|
4,222
|
|
|
7,814
|
|
|
(3,592)
|
|
|
(46.0)
|
%
|
|
|
11,873
|
|
|
8,727
|
|
|
3,146
|
|
|
36.0
|
%
|
|
|
15,577
|
Business
optimization, development and
strategic initiative costs (g)
|
|
|
7,670
|
|
|
7,370
|
|
|
300
|
|
|
4.1
|
%
|
|
|
26,604
|
|
|
13,662
|
|
|
12,942
|
|
|
94.7
|
%
|
|
|
30,415
|
Certain investment
costs and franchise
taxes(h)
|
|
|
2,890
|
|
|
386
|
|
|
2,504
|
|
NM
|
|
|
|
3,305
|
|
|
504
|
|
|
2,801
|
|
NM
|
|
|
|
3,883
|
Other adjusting items
(i)
|
|
|
(544)
|
|
|
3,791
|
|
|
(4,335)
|
|
NM
|
|
|
|
15,808
|
|
|
7,198
|
|
|
8,610
|
|
NM
|
|
|
|
20,394
|
Adjusted EBITDA
(j)
|
|
$
|
212,397
|
|
$
|
173,766
|
|
$
|
38,631
|
|
|
22.2
|
%
|
|
$
|
336,676
|
|
$
|
248,919
|
|
$
|
87,757
|
|
|
35.3
|
%
|
|
$
|
385,108
|
Items added back
to Adjusted EBITDA,
after cost savings, as defined in the
Amended Credit Agreement:
|
|
Estimated cost
savings (k)
|
|
|
27,700
|
Adjusted EBITDA,
after cost savings (l)
|
|
$
|
412,808
|
Prior to the Amended Credit Agreement, the credit agreement
governing the Company\'s Senior Secured Credit Facilities limited
the amount of certain add-backs as described in footnotes (g) and
(i) below. The following table reconciles the Adjusted EBITDA
calculation as previously defined prior to the Amended Credit
Agreement to the Adjusted EBITDA calculation as defined in
the Amended Credit Agreement. This table is presented as
supplemental information only:
|
|
For the Three
Months Ended
March 31,
|
|
|
For the Three
Months
Ended June 30,
|
|
For the Three
Months
Ended September 30,
|
|
|
For the Nine
Months
Ended September 30,
|
|
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
Adjusted EBITDA (as
previously defined)
|
|
$
|
(117)
|
|
$
|
(30,363)
|
|
|
$
|
117,619
|
|
$
|
104,221
|
|
$
|
204,852
|
|
$
|
172,326
|
|
|
$
|
322,354
|
|
$
|
246,184
|
Certain expenses over
previous credit agreement
limit (g)
|
|
|
—
|
|
|
—
|
|
|
|
3,934
|
|
|
—
|
|
|
7,670
|
|
|
—
|
|
|
|
11,604
|
|
|
—
|
Taxes related to
other adjusting items not previously
added back (i)
|
|
|
2,415
|
|
|
—
|
|
|
|
428
|
|
|
1,295
|
|
|
(125)
|
|
|
1,440
|
|
|
|
2,718
|
|
|
2,735
|
Adjusted EBITDA (as
defined in the Amended
Credit Agreement)(j)
|
|
$
|
2,298
|
|
$
|
(30,363)
|
|
|
$
|
121,981
|
|
$
|
105,516
|
|
$
|
212,397
|
|
$
|
173,766
|
|
|
$
|
336,676
|
|
$
|
248,919
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months
Ended September 30,
|
|
|
Change
|
|
For the Nine
Months
Ended September 30,
|
|
|
Change
|
|
|
2018
|
|
2017
|
|
|
$
|
|
%
|
|
2018
|
|
2017
|
|
|
$
|
|
%
|
Net cash provided
by operating activities
|
|
$
|
140,644
|
|
$
|
99,476
|
|
|
$
|
41,168
|
|
41.4
%
|
|
$
|
267,458
|
|
$
|
187,779
|
|
|
$
|
79,679
|
|
42.4
%
|
Capital
expenditures
|
|
|
43,506
|
|
|
36,463
|
|
|
7,043
|
|
19.3
%
|
|
140,878
|
|
139,638
|
|
|
1,240
|
|
0.9
%
|
Free Cash Flow
(m)
|
|
$
|
97,138
|
|
$
|
63,013
|
|
|
$
|
34,125
|
|
54.2
%
|
|
$
|
126,580
|
|
$
|
48,141
|
|
|
$
|
78,439
|
|
162.9
%
|
SEAWORLD
ENTERTAINMENT, INC. AND SUBSIDIARIES
UNAUDITED BALANCE
SHEET DATA
(In
thousands)
|
|
|
|
|
As of
September 30,
2018
|
|
|
As of
December 31,
2017
|
|
Cash and cash
equivalents
|
|
$
|
125,669
|
|
|
$
|
33,178
|
|
Total
assets
|
|
$
|
2,211,977
|
|
|
$
|
2,085,782
|
|
Long-term debt,
including current maturities:
|
|
|
|
|
|
|
|
|
Term B-5
Loans
|
|
$
|
983,331
|
|
|
$
|
990,819
|
|
Term B-2 Loans
(n)
|
|
|
543,935
|
|
|
|
554,227
|
|
Revolving Credit
Facility
|
|
|
—
|
|
|
|
15,000
|
|
Total long-term debt,
including current maturities
|
|
$
|
1,527,266
|
|
|
$
|
1,560,046
|
|
Total stockholders'
equity
|
|
$
|
373,336
|
|
|
$
|
287,466
|
|
SEAWORLD
ENTERTAINMENT, INC. AND SUBSIDIARIES
UNAUDITED OTHER
DATA
(In thousands,
except per capita amounts)
|
|
|
|
|
For the Three
Months
Ended September 30,
|
|
Change
|
|
|
For the Nine
Months
Ended September 30,
|
|
Change
|
|
|
|
2018
|
|
2017
|
|
#
|
|
%
|
|
|
2018
|
|
2017
|
|
#
|
|
%
|
|
Attendance
|
|
|
8,344
|
|
|
7,609
|
|
|
735
|
|
|
9.7
|
%
|
|
|
17,982
|
|
|
16,537
|
|
|
1,445
|
|
|
8.7
|
%
|
Total revenue per
capita (o)
|
|
$
|
57.91
|
|
$
|
57.52
|
|
$
|
0.39
|
|
|
0.7
|
%
|
|
$
|
60.74
|
|
$
|
60.34
|
|
$
|
0.40
|
|
|
0.7
|
%
|
NM-Not meaningful.
(a) Reflects non-cash goodwill impairment charges
incurred in the nine months ended September
30, 2017 related to the full impairment of goodwill for the
Company's SeaWorld Orlando reporting unit.
(b) Reflects restructuring and other separation
costs which for the three months ended September 30, 2018 primarily relates to a
restructuring program in 2018 and for the nine months ended
September 30, 2018 primarily relates
to costs associated with the departure of certain executives during
2018.
(c) Reflects primarily the write-off of $8.0 million
in debt issuance costs incurred on the Term B-5 Loans during the
nine months ended September 30, 2017.
(d) There were no anti-dilutive shares of common
stock equivalents excluded from the computation of diluted earnings
per share during the three months ended September 30, 2018. During the nine months
ended September 30, 2018, there were
approximately 1,736,000 anti-dilutive shares excluded from the
computation of diluted earnings per share. During the three
months ended September 30, 2017,
there were approximately 4,180,000 anti-dilutive shares excluded
from the computation of diluted earnings per share. There
were approximately 5,137,000 potentially dilutive shares excluded
from the computation of diluted loss per share during the nine
months ended September 30, 2017 as
their effect would have been anti-dilutive due to the Company's net
loss in that period.
(e) Reflects non-cash equity compensation expenses
associated with the grants of equity compensation. For the nine
months ended September 30, 2018,
includes approximately $5.5 million
related to equity awards which were accelerated in connection with
the departure of certain executives, as required by their
respective employment agreements. For the nine months ended
September 30, 2017, includes
$8.4 million associated with certain
performance-vesting restricted shares which vested in the second
quarter of 2017.
(f) Reflects primarily non-cash expenses related to
fixed asset write-offs and impairments.
(g) For the three and nine months ended September 30, 2018, business optimization,
development and other strategic initiative costs incurred related
to: (i) $3.9 million and $16.4 million, respectively, of severance and
other employment costs which, for the three months ended primarily
relates to a restructuring program in 2018 and for the nine months
ended September 30, 2018, primarily
related to costs associated with the departure of certain
executives during 2018; (ii) $3.6
million and $8.9 million,
respectively, of third party consulting costs; and (iii)
$0.2 million and $1.3 million, respectively, of product and
intellectual property development costs.
For the three and nine months ended September 30, 2017, reflects business
optimization, development and other strategic initiative costs
primarily composed of: (i) $ 5.1
million of costs related to a restructuring program in 2017;
(ii) $0.9 million and $3.6 million, respectively, of third party
consulting costs; (iii) $0.6 million
and $3.8 million, respectively, of
product and intellectual property development costs; and (iv)
additional net separation costs of $0.1
million and $0.5 million
incurred in the three and nine months ended September 30, 2017 for certain positions
eliminated not related to a formal restructuring or cost savings
initiative.
Prior to the Amended Credit Agreement, due to limitations under
the credit agreement governing the Company's Senior Secured Credit
Facilities, the amount which the Company was able to add back to
Adjusted EBITDA for these costs, was limited to $15.0 million in any fiscal year. As such, the
Adjusted EBITDA calculation for the three and six months ended
June 30, 2018 previously reported did
not reflect approximately $3.9
million of related costs due to these limitations.
(h) Reflects primarily a loss of approximately
$2.8 million during the three and
nine months ended September 30, 2018
relating to expenses incurred and fees associated with the
termination of an agreement.
(i) Reflects the impact of expenses incurred
primarily related to certain legal matters, which the Company is
permitted to exclude under the credit agreement governing its
Senior Secured Credit Facilities due to the unusual nature of the
items. For the three and nine months ended September 30, 2018, includes approximately
$1.5 million of insurance recoveries
received related to these legal matters. For the nine months ended
September 30, 2018, also includes
$12.1 million related to legal
settlements.
Prior to the Amended Credit Agreement, these items were excluded
on an after-tax basis only, as such, the Adjusted EBITDA
calculation for the three months ended March
31 and June 30, 2018
previously reported did not reflect related taxes of approximately
$2.4 million and $0.4 million, respectively. Additionally,
the Adjusted EBITDA calculation for the three months ended
June 30, 2017 and for the three and
nine months ended September 30, 2017,
did not reflect related taxes of approximately $1.3 million, $1.4
million and $2.7 million,
respectively.
(j) Adjusted EBITDA is defined as net income (loss)
before income tax expense, interest expense, depreciation and
amortization, as further adjusted to exclude certain non-cash, and
other items permitted in calculating covenant compliance under the
credit agreement governing the Company's Senior Secured Credit
Facilities. The Adjusted EBITDA presentation for the prior periods
has been changed to conform with the current period
presentation. In particular, the Adjusted EBITDA calculation
changed to conform with the changes made to its definition in the
Amended Credit Agreement. Prior to the Amended Credit
Agreement, the credit agreement governing the Company's Senior
Secured Credit Facilities limited the amount of certain add-backs
as described in footnotes (g) and (i) above.
(k) The Senior Secured Credit Facilities permits the
Company's calculation of certain covenants to be based on Adjusted
EBITDA, as defined above, for the last twelve month period further
adjusted for net annualized estimated savings the Company expects
to realize over the following 18 month period related to certain
specified actions, including restructurings and cost savings
initiatives. These estimated savings are calculated net of
the amount of actual benefits realized during such period. These
estimated savings are a non-GAAP Adjusted EBITDA add-back item only
as defined in the Amended Credit Agreement and does not impact the
Company's reported GAAP net income (loss). The Amended Credit
Agreement limits the amount of such estimated savings which may be
reflected to 25% of Adjusted EBITDA, calculated for the last twelve
months before the impact of these estimated cost savings. Prior to
the Amended Credit Agreement, the credit agreement limited the
amount of such estimated savings which could be reflected in the
calculation of Adjusted EBITDA to $10.0
million for any four consecutive fiscal quarters calculated
as the amount the Company expected to realize over the following 12
month period.
(l) The Senior Secured Credit Facilities permits the
Company's calculation of certain covenants to be based on Adjusted
EBITDA, as defined above, for the last twelve month period further
adjusted for net annualized estimated savings as described in
footnote (k) above.
(m) Free Cash Flow is defined as net cash provided by
operating activities less capital expenditures. Management believes
that Free Cash Flow is useful to investors, equity analysts and
rating agencies as a liquidity measure. The Company uses Free Cash
Flow to evaluate its ability to generate cash flow from business
operations. Free Cash Flow does not represent the residual
cash flow available for discretionary expenditures, as it excludes
certain expenditures such as mandatory debt service requirements,
which are significant. Free Cash Flow is not defined by GAAP and
should not be considered in isolation or as an alternative to net
cash provided by (used in) operating, investing and financing
activities or other financial data prepared in accordance with
GAAP. Free Cash Flow as defined above may differ from similarly
titled measures presented by other companies.
(n) On October 31,
2018, the Company, through its wholly-owned subsidiary,
SeaWorld Parks and Entertainment, Inc., closed on the Amended
Credit Agreement which refinanced the entire amount of the existing
Term B-2 Loans with new Term B-5 Loans.
(o) Calculated as total revenues divided by
attendance.
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SOURCE SeaWorld Entertainment, Inc.