SeaWorld Entertainment is a name and company known the world over for their incredible theme park and entertainment offerings which fuse fun activities like rides, shows, and other attractions with the beauty of nature, resulting in highly engaging, enjoyable educational experience environments that really accentuate the majesty of the some 67k marine and terrestrial animals currently in the company’s unique collection.
Such high profile brands as SeaWorld® and Busch Gardens®, with attractions like the incredible Shamu™ show, which continues to draw massive crowds at SeaWorld San Diego (as well as at shows in Orlando and San Antonio), are not just household names here in the United States; they have and continue to gain increasing prominence on the world’s stage. SEAS owns or licenses a large portfolio of globally recognized brands and has really carved out a solid foundation for itself in the parks industry, with over five decades in the game and is now picking up considerable steam in media. SeaWorld has quite literally become synonymous with aquatic theme parks and such shows as Shamu in particular have enjoyed an exceptionally long run, with the current “One Ocean” Shamu production delighting crowds with its mixture of jaw dropping animal training and always exciting human-orca interactions.
Part of the success story for SEAS is the thrill people get from seeing rare and even dangerous creatures up close and personal, so the company has never shied away from this crucial aspect of the business, despite also running a vast array of theme and ride-focused content at venues like the European-themed Busch Gardens Williamsburg. Busch Gardens Williamsburg has some of the best rides in the state of Virginia, including world-class roller coasters like the flying coaster Alpengeist® (Ghost of the Alps), which has the riders hanging below the track with their legs free and which has been consistently voted to be among the top ten steel coasters on earth today. The company is also seeing really good traction with their water parks, like the Adventure Island® location right across from their Busch Gardens Tampa site, or the Aquatica™ parks in Orlando, San Antonio, and San Diego, which feature high-speed water slides and wave pools, as well as tranquil beaches and/or fun lounging areas.
This superb menu has meant good business for SEAS, with a majority of revenue coming in the door from their strongly executed operations, even as more and more space opens up for the company through ingenious leveraging of their high profile brands to do consumer products, education/entertainment, and other media. These guys saw attendance of over 24M guests last year, with roughly 14.6% of that coming from 55 plus countries on six continents. The first half of 2013 looks really nice, with the Aug 13 financials showing record revenues of $649.9M, up 2% over last year’s front half. The company sliced off over $180M in long-term debt as well and refinanced their $1.4B credit facility with favorable terms (maturity rolled out to 2020), declaring a $0.20 cash dividend per share at the start of July.
President and CEO of SEAS, Jim Atchison, beamed at how the company shrugged off a bad Q2, with weather and ugly Easter holiday timing conspiring to drag profitability down (Mar 31 date caused wicked overlap with the spring break holiday in several key markets). Atchison emphasized the strength of the company’s underlying business model and how their rigorous pricing and yield management efforts have allowed SEAS to remain firmly on-track for 2013 guidance, with adjusted EBITDA projections of $430 to $440M (revenues of $1.45B to $1.48B). The fact that they could bring in new pricing and yield management strategies, weather the impact, and still pull down record revenues, with a total revenue per capita increase of 8%, says a lot about how finely tuned the SEAS engine is.
With a diverse group of 11 hot destinations and regional theme parks across key U.S. markets, as well as an exceptionally shrewd approach to capital expenditures and working capital management, SEAS is set up to continue dominating in this space for the foreseeable future. The strong performance competencies established by SEAS at their operations, combined with a naturally interesting group of people and work environment, is a formula that lends itself quite naturally to television production and this vector has becoming of increasing interest to the company as a relatively low budget way to further leverage their impressive infrastructure.
Also announced back in August was a third season of the successful show SeaWorld’s Sea Rescue™ with Sam Champion, as well as a new TV show to air on ABC affiliates that will follow the zoological team from Busch Gardens Tampa (the land-animal sister park to SeaWorld). This new show will be called The Wildlife Docs™ and will start airing this October 5th on most ABC stations during the popular Saturday morning programming block, Litton’s Weekend Adventure, right after Good Morning America.
To get a closer look at SeaWorld Entertainment, visit www.SeaworldInvestors.com
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