SEAS SeaWorld Entertainment Inc

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 28, 2024

United Parks & Resorts Inc.

(Exact name of Registrant as Specified in Its Charter)

Delaware	001-35883	27-1220297
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
6240 Sea Harbor Drive Orlando, Florida		32821
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (407) 226-5011

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	PRKS	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Item 1.01 Entry into a Material Definitive Agreement.

On February 27, 2024, United Parks & Resorts Inc. (the “Company”) and Hill Path Capital LP (“Hill Path”) entered into the First Amendment (the “Amendment”) to the Stockholders Agreement, dated as of May 27, 2019 (as amended from time to time, the “Stockholders Agreement”), by and between the Company and Hill Path. The Amendment provides, among other things, that (A) any future amendment to or waiver by the Company of the Amendment will require approval of a majority of the directors of the Company’s Board of Directors who are not Hill Path affiliates and are disinterested from Hill Path (“Special Committee Approval”); (B) (i) any future acquisition of all or substantially all of the Company’s common stock not owned by Hill Path or its affiliates, whether by merger, consolidation, tender offer or otherwise or (ii) any material related party transaction with Hill Path or its affiliates will first require Special Committee Approval and approval by a majority of the Company’s voting shares not owned or controlled by Hill Path (“Disinterested Stockholder Approval”); and (C) for most matters put to a stockholder vote (including director elections, acquisition transactions and other routine matters) where the Stockholders Agreement currently provides that Hill Path may vote such shares either (x) affirmatively in accordance with the recommendation of the Board of Directors (or, in the case of director elections, in favor of each person nominated by the Board of Directors or the Nominating and Corporate Governance Committee) or (y) in the same proportion as the shares not owned or controlled by Hill Path, Hill Path may only vote such shares in the same proportion as the votes of the Company’s outstanding voting shares not owned or controlled by Hill Path.

The Board has entered into the Amendment in connection with the announced Share Repurchase Program. The Amendment provides that its terms will only become effective if Disinterested Stockholder Approval is obtained for both the Amendment and the Share Repurchase Program and any shares are purchased under such program. If the Amendment or the Share Repurchase Program proposal is not approved by the Company’s stockholders, the Amendment, in accordance with its terms, will automatically terminate and have no effect.

The Amendment will cease to have effect at any time if both the aggregate beneficial ownership and the aggregate economic ownership of the Hill Path Affiliates fall below their current levels. The Amendment will again become effective at any time thereafter if either the aggregate beneficial ownership or the aggregate economic ownership of the Hill Path Affiliates again equals or exceeds their current levels.

The information provided in this Item 1.01 is qualified in its entirety by reference to the terms of the Amendment, attached hereto as Exhibit 10.1 and incorporated herein by reference.

Item 2.02 Results of Operations and Financial Condition.

On February 28, 2024, the Company issued a press release announcing the results of the Company’s operations for the quarter and fiscal year ended December 31, 2023. The full text of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference in this Item 2.02.

The information in this Current Report on Form 8-K and Exhibit 99.1 is being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing made by the Company under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 7.01 Regulation FD Disclosure

On February 28, 2024, the Company posted new written investor presentation materials on its investor relations website at http://www.unitedparksinvestors.com/events-and-presentations/default.aspx. The Company intends to use such materials from time to time in meetings with the investment community and for general marketing purposes.

The information set forth under this Item 7.01 of this Current Report on Form 8-K shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing made by the Company under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.		Description
10.1		First Amendment to the Stockholders Agreement, dated as of February 27, 2024, by and between Hill Path Capital LP and United Parks & Resorts Inc.
99.1		Press release of United Parks & Resorts Inc., dated February 28, 2024, announcing results for the quarter and fiscal year ended December 31, 2023.
104		Cover page interactive data filed (embedded within the Inline XBRL document).

 

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

				UNITED PARKS & RESORTS INC.
Date: February 28, 2024		By:		/s/ G. Anthony (Tony) Taylor
		Name:		G. Anthony (Tony) Taylor
		Title:		Chief Legal Officer, General Counsel and Corporate Secretary

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FIRST AMENDMENT TO

STOCKHOLDERS AGREEMENT

This First Amendment to the Stockholders Agreement (this “Amendment”), dated as of February 27, 2024, is by and between Hill Path Capital LP, a Delaware limited partnership (“Hill Path”), and United Parks & Resorts Inc., a Delaware corporation (formerly known as SeaWorld Entertainment, Inc.) (the “Company”). Capitalized terms used herein shall have the meanings set forth in the Stockholders Agreement by and between Hill Path and the Company dated as of May 27, 2019 (the “Original Agreement” and, as amended by this Amendment, the “Agreement”).

BACKGROUND:

WHEREAS, the Board has determined that it is in the best interests of the Company and its stockholders for the Company to authorize repurchases from time to time of up to $500 million of shares of Common Stock or such lesser amount as to ensure that the Beneficial Ownership Percentage of all Hill Path Affiliates (including James P. Chambers, who for the purpose of this Amendment and the Original Agreement, shall be deemed to be a Hill Path Affiliate), in the aggregate, does not equal or exceed 50% (the “Repurchase Program”);

WHEREAS, the Board has authorized the Repurchase Program, subject to Disinterested Stockholder Approval (as defined below);

WHEREAS, the Board has determined (i) to call a special meeting of the Company’s stockholders (the “Special Meeting”); (ii) to submit the Repurchase Program and this Amendment for approval by the holders of a majority of the outstanding shares of Common Stock not held by the Hill Path Affiliates (Nomura Global Financial Products Inc., as counterparty on the Derivatives (as defined below), and James P. Chambers, as a Partner at Hill Path, shall be deemed to be Hill Path Affiliates solely for purposes of this approval requirement) (such approval, the “Disinterested Stockholder Approval” and such stockholders, the “Disinterested Stockholders”); and (iii) to recommend that such stockholders vote in favor of the Disinterested Stockholder Approval;

WHEREAS, Hill Path Affiliates (i) currently have Beneficial Ownership of 27,314,264 shares of Common Stock, representing approximately 42.7% of the outstanding shares of Common Stock (the “Current Beneficial Ownership Percentage”); and (ii) have entered into cash-settled total return swap agreements (any such swap agreements or other derivative arrangements, collectively, the “Derivatives” and the economic ownership interest represented by such Derivatives taken together with those shares of Common Stock with respect to which there is Beneficial Ownership, “Economic Ownership Percentage”) that establish economic exposure to an aggregate of 4,421,431 additional shares of Common Stock, representing approximately 6.9% of the outstanding shares of Common Stock (the “Current Derivative Ownership Percentage,” together with the Current Beneficial Ownership Percentage, the “Current Economic Ownership Percentage”, which as of the date hereof is approximately 49.6%) that provide economic results comparable to ownership but do not provide the power to vote or direct the voting of or to dispose or direct the disposition of shares of Common Stock;

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WHEREAS, in connection with its consideration of the Repurchase Program, a special committee of the Board, consisting of directors who are not Hill Path Affiliated Directors and who are disinterested from Hill Path, requested that Hill Path agree to certain amendments to the Original Agreement; and

WHEREAS, to facilitate the Repurchase Program and for the benefit of all the Company’s stockholders, Hill Path is willing to amend the Original Agreement as set forth herein, to become effective when the Company has acquired any shares under the Repurchase Program.

NOW, THEREFORE, in consideration of and in reliance upon the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

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[Signature Page Follows]

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IN WITNESS WHEREOF, each of the parties hereto has executed this Amendment, or caused the same to be executed by its duly authorized representative as of the date first above written.

HILL PATH CAPITAL LP

 

By: /s/ Scott I. Ross_________________________
Name: Scott I. Ross
Title: Managing Partner

 

UNITED PARKS & RESORTS INC.

 

By: /s/ Marc G. Swanson_____________________
Name: Marc G. Swanson
Title: Chief Executive Officer

 

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United Parks & Resorts Inc. Reports Fourth Quarter and Fiscal 2023 Results

ORLANDO, FL, February 28, 2024 - United Parks & Resorts Inc. (NYSE: PRKS), a leading theme park and entertainment company, today reported its financial results for the fourth quarter and fiscal year 2023.

Fourth Quarter 2023 Highlights

Fiscal 2023 Highlights

Other Highlights

“We are pleased to report another quarter and fiscal year of strong financial results,” said Marc Swanson, Chief Executive Officer of United Parks & Resorts Inc. “In the fourth quarter we delivered record attendance and record in park per capita spending despite adverse weather impacts, in particular across our Florida markets during peak visitation periods and an unfavorable calendar shift in the quarter. For the full year we delivered near record results and grew our total revenue per capita for the 6th year in a row despite significant adverse weather impacts throughout the year. We estimate that weather related and calendar shift impacts reduced attendance by approximately 75,000 visits in the fourth quarter and that weather related impacts reduced attendance by over 370,000 visits for the full year.”

“Weather aside, we continue to drive growth in total revenue per capita including growth in admissions per capita, and in-park per capita, which has increased for 15 consecutive quarters, demonstrating the effectiveness of our revenue strategies, our pricing power and the strength of consumer spending in our parks. Also, in 2023 along with our partners we successfully opened our first SeaWorld park outside of the United States in Abu Dhabi, which has been extremely well received and is performing ahead of expectations. In addition, we made meaningful investments across our parks and business that we are confident will deliver strong returns and will be a source of growth and profitability this year and into the future,” said Marc Swanson, Chief Executive Officer of United Parks & Resorts Inc. “I want to thank our ambassadors for all their dedicated efforts in 2023.”

"Our attendance levels for fiscal 2023 were still below levels achieved in 2019, primarily due to a decline in international and group attendance which we are confident will recover to and surpass pre-COVID levels. We are also still more than 3 million visitors below our historical high attendance of approximately 25 million guests achieved in 2008. Our clear opportunity to drive meaningfully more attendance to our parks combined with our demonstrated ability to continue to grow total per capita spending, manage and reduce costs and achieve strong returns on our investments give us high confidence in our ability to continue to deliver operational and financial improvements that will lead to meaningful increases in shareholder value” continued Swanson.

“We are excited about our plans for 2024, including an incredible line-up of new, one-of-a kind rides, attractions and events, improved in park venues and offerings across our parks. We are also really excited about celebrating SeaWorld Parks 60th anniversary this year which kicks off across our SeaWorld parks on March 21st and will run through the whole year. There will be even more reasons to visit our SeaWorld parks this year with special events, shows, attractions and a whole lot more. We are happy to report that our new rides and attractions are all currently scheduled to open before the peak summer season. We are also encouraged to see 2024 bookings trending ahead of prior year for both group sales and our Discovery Cove Property. We expect meaningful growth and new records in revenue and Adjusted EBITDA for 2024,” concluded Swanson.

 

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[1] This earnings release includes Adjusted EBITDA, Covenant Adjusted EBITDA and Free Cash Flow which are financial measures that are not calculated in accordance with Generally Accepted Accounting Principles in the U.S. ("GAAP"). See "Statement Regarding Non-GAAP Financial Measures and Key Performance Metrics" section and the financial statement tables for the definitions of Adjusted EBITDA, Covenant 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.

[2] This earnings release includes key performance metrics such as total revenue per capita, admissions per capita and in-park per capita spending. See “Statement Regarding Non-GAAP Financial Measures and Key Performance Metrics” section for definitions and further details.

 

For 2024, the Company has an exciting line-up of new rides, attractions, events and new and improved in park venues and offerings with something new and meaningful in every one of its parks. The Company’s new rides and attractions include the following:

 

The Company's results of operations for fiscal 2023 and 2022 continued to be impacted by the global COVID-19 pandemic due in part to a decline in international attendance from historical levels.

Fourth Quarter 2023 Results

In the fourth quarter of 2023, the Company hosted approximately 5.0 million guests, generated total revenues of $389.0 million, net income of $40.1 million and Adjusted EBITDA of $150.4 million. Attendance increased approximately 23,000 guests when compared to the fourth quarter of 2022 primarily due to an increase in demand, partly from the Company's Halloween and Christmas events, partially offset by the impact of adverse weather during peak visitation periods, particularly across our Florida markets and the impact of a calendar shift in the quarter.

The decrease in total revenue of $1.6 million compared to the fourth quarter of 2022 was primarily a result of decreases in admission per capita (defined as admissions revenue divided by total attendance), partially offset by increased in-park per capita spending (defined as food, merchandise and other revenue divided by total attendance). Admission per capita decreased primarily due to the

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impact of the admissions product mix when compared to the fourth quarter of 2022. In-park per capita spending improved due to pricing initiatives. The decrease in net income of $9.0 million compared to the fourth quarter of 2022 was primarily a result of the impact of higher operating expenses. Adjusted EBITDA was negatively impacted by a decrease in total revenue.

		Three Months Ended December 31,								Variance
		2023				2022				%
(Unaudited, in millions, except per share and per capita amounts)
Total revenues		$	389.0			$	390.5				(0.4	%)
Net income		$	40.1			$	49.0				(18.3	%)
Earnings per share, diluted		$	0.62			$	0.76				(18.4	%)
Adjusted EBITDA		$	150.4			$	153.7				(2.1	%)
Net cash provided by operating activities		$	106.5			$	95.7				11.2	%
Attendance			4.96				4.94				0.5	%
Total revenue per capita		$	78.42			$	79.10				(0.9	%)
Admission per capita		$	44.46			$	45.63				(2.6	%)
In-Park per capita spending		$	33.96			$	33.47				1.5	%

Fiscal 2023 Results

In fiscal 2022, the Company hosted approximately 21.6 million guests and generated total revenues of $1,726.6 million, net income of $234.2 million and Adjusted EBITDA of $713.5 million. Attendance decreased by 0.3 million guests when compared to 2022 primarily due to significantly adverse weather, including some combination of unusual heat, cold and/or rain, across most of our markets, including during peak visitation periods.

The decrease in total revenue of $4.7 million compared to 2022 was primarily a result of a decrease in attendance partially offset by increases in admission per capita and in-park per capita spending. Admission per capita increased primarily due to the realization of higher prices in our admission products resulting from our strategic pricing efforts and the impact of the park attendance mix, which was partially offset by the impact of the admissions product mix when compared to 2022. In-park per capita spending improved primarily due to pricing initiatives and an increase in revenue related to the Company's international services agreements when compared to 2022, partially offset by factors including weather, the admissions product mix, closures and disruption related to construction delays at certain in park locations.

Net income and Adjusted EBITDA were negatively impacted by a decrease in total revenue and increases in operating expense, selling, general and administrative expenses. Net income was also negatively impacted by higher interest expense.

		Fiscal Year Ended December 31,								Variance
		2023				2022				%
(Unaudited, in millions, except per share and per capita amounts)
Total revenues		$	1,726.6			$	1,731.2				(0.3	%)
Net income		$	234.2			$	291.2				(19.6	%)
Earnings per share, diluted		$	3.63			$	4.14				(12.3	%)
Adjusted EBITDA		$	713.5			$	728.2				(2.0	%)
Net cash provided by operating activities		$	504.9			$	564.6				(10.6	%)
Attendance			21.61				21.94				(1.5	%)
Total revenue per capita		$	79.91			$	78.91				1.3	%
Admission per capita		$	44.16			$	44.00				0.4	%
In-Park per capita spending		$	35.75			$	34.91				2.4	%

Share Repurchases

During the year ended December 31, 2023, the Company repurchased 313,750 shares for an aggregate total of approximately $17.9 million.

The Board of Directors voted to recommend a new $500 million share buyback authorization, subject to approval by non-Hill Path shareholders

Rescue Efforts

In the fourth quarter of 2023, the Company came to the aid of 98 animals in need in the wild. The total number of animals the Company has helped over its history is more than 41,000.

The Company is a leader in animal rescue. Working in partnership with state, local and federal agencies, the Company’s rescue teams are on call 24 hours a day, seven days a week, 365 days a year. Consistent with its mission to protect animals and their ecosystems, rescue teams mobilize and often travel hundreds of miles to help ill, injured, orphaned or abandoned wild animals in need of the Company’s expert care, with the goal of returning them to their natural habitat.

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Conference Call

The Company will hold a conference call today, Wednesday, February 28, 2024, at 9 a.m. Eastern Time to discuss its fourth quarter and fiscal 2023 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.UnitedParksInvestors.com. For those unable to participate in the live webcast, a replay will be available beginning at approximately 12 p.m. Eastern Time on February 28, 2024, under the "Events & Presentations" tab of www.UnitedParksInvestors.com. A replay of the call can also be accessed telephonically from 12 p.m. Eastern Time on February 28, 2024, through 11:59 p.m. Eastern Time on March 6, 2024, 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 the conference code 1368178.

Statement Regarding Non-GAAP Financial Measures

This earnings release and accompanying financial statement tables include several non-GAAP financial measures, including Adjusted EBITDA, Covenant Adjusted EBITDA and Free Cash Flow. Adjusted EBITDA, Covenant 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, Covenant 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, Covenant 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 the 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.

Management believes the presentation of Covenant Adjusted EBITDA for the last twelve months is appropriate as it provides additional information to investors about the calculation of, and compliance with, certain financial covenants in the Company’s credit agreement governing its Senior Secured Credit Facilities and the indentures governing its Senior Notes and First-Priority Senior Secured Notes (collectively, the “Debt Agreements”). Covenant Adjusted EBITDA is a material component of these covenants.

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.

This earnings release includes several key performance metrics including total revenue per capita (defined as total revenue divided by attendance), admission per capita (defined as admissions revenue divided by attendance) and in-park per capita spending (defined as food, merchandise and other revenue divided by attendance). These performance metrics are used by management to assess the operating performance of its parks on a per attendee basis and to make strategic operating decisions. Management believes the presentation of these performance metrics is useful and relevant for investors as it provides investors the ability to review financial performance in the same manner as management and provides investors with a consistent methodology to analyze revenue between periods on a per attendee basis. In addition, investors, lenders, financial analysts and rating agencies have historically used similar per-capita related performance metrics to evaluate companies in the industry.

About United Parks & Resorts Inc.

United Parks & Resorts Inc. (NYSE: PRKS) is a global theme park and entertainment company that owns or licenses a diverse portfolio of award-winning park brands and experiences, including SeaWorld®, Busch Gardens®, Discovery Cove, Sesame Place®, Water Country USA, Adventure Island, and Aquatica®. The Company’s seven world-class brands span 13 parks in seven markets across the United States and Abu Dhabi, offering experiences that matter with exhilarating thrill and family-friendly rides, coasters, and experiences, inspiring up-close and educational presentations with wildlife, and other various special events throughout the year. In addition, the Company collectively cares for one of the largest zoological collections in the world, is a global leader in animal welfare, training, and veterinary care, and is one of the leading marine animal rescue organizations in the world with a legacy of rescuing and caring for animals that spans nearly 60 years, including coming to the aid of over 41,000 animals in need. To learn more, visit www.UnitedParks.com.

Copies of this and other news releases as well as additional information about United Parks & Resorts Inc. can be obtained online at www.unitedparks.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.

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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 the 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, beliefs, 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: various factors beyond the Company's control adversely affecting attendance and guest spending at the Company's theme parks, including, but not limited to, weather, natural disasters, labor shortages, inflationary pressures, supply chain delays or shortages, foreign exchange rates, consumer confidence, the potential spread of travel-related health concerns including pandemics and epidemics, travel related concerns, adverse general economic related factors including increasing interest rates, economic uncertainty, and recent geopolitical events outside of the United States, and governmental actions; failure to retain and/or hire employees; a decline in discretionary consumer spending or consumer confidence, including any unfavorable impacts from Federal Reserve interest rate actions and inflation which may influence discretionary spending, unemployment or the overall economy; the ability of Hill Path Capital LP and its affiliates to significantly influence the Company's decisions and their interests may conflict with ours or yours in the future; increased labor costs, including minimum wage increases, and employee health and welfare benefit costs; complex federal and state regulations governing the treatment of animals, which can change, and claims and lawsuits by activist groups before government regulators and in the courts; activist and other third-party groups and/or media can pressure governmental agencies, vendors, partners, guests and/or regulators, bring action in the courts or create negative publicity about us; incidents or adverse publicity concerning the Company's theme parks, the theme park industry and/or zoological facilities; a significant portion of the Company's revenues have historically been generated in the States of Florida, California and Virginia, and any risks affecting such markets, such as natural disasters, closures due to pandemics, severe weather and travel-related disruptions or incidents; technology interruptions or failures that impair access to the Company's websites and/or information technology systems; cyber security risks to us or the Company's third-party service providers, failure to maintain or protect the integrity of internal, employee or guest data, and/or failure to abide by the evolving cyber security regulatory environment; inability to compete effectively in the highly competitive theme park industry; interactions between animals and the Company's employees and the Company's guests at attractions at the Company's theme parks; animal exposure to infectious disease; high fixed cost structure of theme park operations; seasonal fluctuations in operating results; changing consumer tastes and preferences; inability to grow the Company's business or fund theme park capital expenditures; inability to realize the benefits of developments, restructurings, acquisitions or other strategic initiatives, and the impact of the costs associated with such activities; the effects of public health events on the Company's business and the economy in general; adverse litigation judgments or settlements; inability to protect the Company's intellectual property or the infringement on intellectual property rights of others; the loss of licenses and permits required to exhibit animals or the violation of laws and regulations; unionization activities and/or labor disputes; inability to maintain certain commercial licenses; restrictions in the Company's debt agreements limiting flexibility in operating the Company's business; inability to retain the Company's current credit ratings; the Company's leverage and interest rate risk; inadequate insurance coverage; inability to purchase or contract with third party manufacturers for rides and attractions, construction delays or impacts of supply chain disruptions on existing or new rides and attractions; environmental regulations, expenditures and liabilities; suspension or termination of any of the Company's business licenses, including by legislation at federal, state or local levels; delays, restrictions or inability to obtain or maintain permits; inability to remediate an identified material weakness; financial distress of strategic partners or other counterparties; tariffs or other trade restrictions; actions of activist stockholders; the policies of the U.S. President and his administration or any changes to tax laws; changes or declines in the Company's stock price, as well as the risk that securities analysts could downgrade the Company's stock or the Company's sector; risks associated with the Company's capital allocation plans and share repurchases, including the risk that the Company's share repurchase program could increase volatility and fail to enhance stockholder value, 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

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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.unitedparks.com).

CONTACT:

 

Investor Relations:

Matthew Stroud

Investor Relations

(888) 410-1812

Investors@unitedparks.com

 

Media:

Libby Panke

FleishmanHillard

(314) 719-7521

Libby.Panke@fleishman.com

 

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UNITED PARKS & RESORTS INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

 

		For the Three Months Ended December 31,								Change								For the Year Ended December 31,								Change
		2023				2022				$				%				2023				2022				$				%
Net revenues:
Admissions		$	220,541			$	225,291			$	(4,750	)			(2.1	%)		$	954,083			$	965,232			$	(11,149	)			(1.2	%)
Food, merchandise and other			168,424				165,229				3,195				1.9	%			772,504				766,005				6,499				0.8	%
Total revenues			388,965				390,520				(1,555	)			(0.4	%)			1,726,587				1,731,237				(4,650	)			(0.3	%)
Costs and expenses:
Cost of food, merchandise and other revenues			29,835				29,274				561				1.9	%			131,697				135,217				(3,520	)			(2.6	%)
Operating expenses (exclusive of depreciation and amortization shown separately below)			184,664				176,367				8,297				4.7	%			758,874				735,687				23,187				3.2	%
Selling, general and administrative expenses			45,085				44,775				310				0.7	%			221,237				200,074				21,163				10.6	%
Severance and other separation costs (a)			295				(5	)			300			NM					816				108				708			NM
Depreciation and amortization			39,812				38,241				1,571				4.1	%			154,208				152,620				1,588				1.0	%
Total costs and expenses			299,691				288,652				11,039				3.8	%			1,266,832				1,223,706				43,126				3.5	%
Operating income			89,274				101,868				(12,594	)			(12.4	%)			459,755				507,531				(47,776	)			(9.4	%)
Other (income) expense, net			(38	)			67				(105	)		NM					(18	)			(43	)			25				58.1	%
Interest expense			36,259				34,765				1,494				4.3	%			146,666				117,501				29,165				24.8	%
Income before income taxes			53,053				67,036				(13,983	)			(20.9	%)			313,107				390,073				(76,966	)			(19.7	%)
Provision for income taxes			13,000				18,026				(5,026	)			(27.9	%)			78,911				98,883				(19,972	)			(20.2	%)
Net income		$	40,053			$	49,010			$	(8,957	)			(18.3	%)		$	234,196			$	291,190			$	(56,994	)			(19.6	%)
Earnings per share:
Earnings per share, basic		$	0.63			$	0.76											$	3.66			$	4.18
Earnings per share, diluted		$	0.62			$	0.76											$	3.63			$	4.14
Weighted average common shares    outstanding:
Basic			63,955				64,136												63,955				69,607
Diluted (b)			64,699				64,789												64,494				70,280

 

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UNITED PARKS & RESORTS INC. AND SUBSIDIARIES

UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(In thousands)

 

		For the Three Months Ended  December 31,								Change								For the Year Ended December 31,								Change
		2023				2022				$				%				2023				2022				$				%
Net income		$	40,053			$	49,010			$	(8,957	)			(18.3	%)		$	234,196			$	291,190			$	(56,994	)			(19.6	%)
Provision for income taxes			13,000				18,026				(5,026	)			(27.9	%)			78,911				98,883				(19,972	)			(20.2	%)
Interest expense			36,259				34,765				1,494				4.3	%			146,666				117,501				29,165				24.8	%
Depreciation and amortization			39,812				38,241				1,571				4.1	%			154,208				152,620				1,588				1.0	%
Equity-based compensation expense (c)			4,246				4,203				43				1.0	%			17,961				19,757				(1,796	)			(9.1	%)
Loss on impairment or disposal of assets and certain non-cash expenses (d)			8,651				1,663				6,988			NM					31,636				14,218				17,418				122.5	%
Business optimization, development and strategic initiative costs (e)			5,712				5,796				(84	)			(1.4	%)			33,903				19,846				14,057				70.8	%
Certain transaction and investment costs and other taxes			402				75				327			NM					1,711				1,128				583				51.7	%
COVID-19 related incremental costs (f)			316				759				(443	)			(58.4	%)			9,076				6,689				2,387				35.7	%
Other adjusting items (g)			1,984				1,138				846				74.3	%			5,223				6,413				(1,190	)			(18.6	%)
Adjusted EBITDA (h)		$	150,435			$	153,676			$	(3,241	)			(2.1	%)		$	713,491			$	728,245			$	(14,754	)			(2.0	%)
Items added back to Covenant Adjusted EBITDA as defined in the Debt Agreements:
Estimated cost savings (i)																			23,100				1,600				21,500			NM
Other adjustments as defined in the Debt Agreements (j)																			7,350				10,877				(3,527	)			(32.4	%)
Covenant Adjusted EBITDA (k)																		$	743,941			$	740,722			$	3,219				0.4	%

 

 

 

		For the Three Months Ended  December 31,								Change								For the Year Ended December 31,								Change
		2023				2022				$				%				2023				2022				$				%
Net cash provided by operating activities		$	106,459			$	95,714			$	10,745				11.2	%		$	504,916			$	564,588			$	(59,672	)			(10.6	%)
Capital expenditures			70,618				49,976				20,642				41.3	%			304,836				200,705				104,131				51.9	%
Free Cash Flow (l)			35,841				45,738				(9,897	)			(21.6	%)			200,080				363,883				(163,803	)			(45.0	%)
Net cash used in investing activities		$	(71,389	)		$	(49,976	)		$	(21,413	)			42.8	%		$	(305,607	)		$	(200,705	)		$	(104,902	)			52.3	%
Net cash used in financing activities		$	(3,374	)		$	(78,910	)		$	75,536				(95.7	%)		$	(34,707	)		$	(726,049	)		$	691,342				(95.2	%)

 

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UNITED PARKS & RESORTS INC. AND SUBSIDIARIES

UNAUDITED BALANCE SHEET DATA

(In thousands)

 

		As of December 31,
		2023				2022
Cash and cash equivalents		$	246,922			$	79,196
Total assets		$	2,625,046			$	2,325,787
Deferred revenue		$	155,614			$	169,535
Long-term debt, including current maturities:
Term B Loans		$	1,173,000			$	1,185,000
Senior Notes			725,000				725,000
First-Priority Senior Secured Notes			227,500				227,500
Total long-term debt, including current maturities		$	2,125,500			$	2,137,500
Total stockholders' deficit		$	(208,216	)		$	(437,664	)

UNITED PARKS & RESORTS INC. AND SUBSIDIARIES

UNAUDITED CAPITAL EXPENDITURES DATA

(In thousands)

 

 

		For the Year Ended December 31,								Change
		2023				2022				#				%
Capital Expenditures:
Core (m)		$	181,850			$	131,940			$	49,910				37.8	%
Expansion/ROI projects (n)			122,986				68,765				54,221				78.8	%
Capital expenditures, total		$	304,836			$	200,705			$	104,131				51.9	%

 

UNITED PARKS & RESORTS INC. AND SUBSIDIARIES

UNAUDITED OTHER DATA

(In thousands, except per capita amounts)

		For the Three Months Ended December 31,								Change								For the Year Ended December 31,								Change
		2023				2022				#				%				2023				2022				#				%
Attendance			4,960				4,937				23				0.5	%			21,606				21,939				(333	)			(1.5	%)
Total revenue per capita(o)		$	78.42			$	79.10			$	(0.68	)			(0.9	%)		$	79.91			$	78.91			$	1.00				1.3	%
Admission per capita(p)		$	44.46			$	45.63			$	(1.17	)			(2.6	%)		$	44.16			$	44.00			$	0.16				0.4	%
In-Park per capita spending(q)		$	33.96			$	33.47			$	0.49				1.5	%		$	35.75			$	34.91			$	0.84				2.4	%

 

NM-Not meaningful.

ND-Not determinable

(a) Reflects restructuring and other separation costs and/or adjustments.

(b) During the three months and year ended December 31, 2023, there were approximately 474,000 and 437,000 anti-dilutive shares excluded from the computation of diluted earnings per share, respectively. During the three months and year ended December 31, 2022, there were approximately 368,000 and 277,000 anti-dilutive shares excluded from the computation of diluted earnings per share, respectively.

(c) Reflects non-cash equity compensation expenses and related payroll taxes associated with the grants of equity-based compensation.

(d) Reflects primarily non-cash expenses related to asset write-offs and costs related to certain rides and equipment which were removed from service. For the years ended December 31, 2023 and 2022 also includes approximately $11.8 million and $6.5 million, respectively, related to non-cash self-insurance reserve adjustments.

(e) For the year ended December 31, 2023, reflects business optimization, development and other strategic initiative costs primarily related to: (i) $16.9 million of third-party consulting costs; and (ii) $15.3 million of other business optimization costs and strategic

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initiative costs. For the three months ended December 31, 2023, reflects business optimization, development and other strategic initiative costs primarily related to $5.5 million of other business optimization costs and strategic initiative costs.

For the three months and year ended December 31, 2022, reflects business optimization, development and other strategic initiative costs primarily related to: (i) $2.2 million and $9.9 million, respectively of third-party consulting costs; and (ii) $3.1 million and $8.8 million, respectively of other business optimization costs and strategic initiative costs.

(f) For the year ended December 31, 2023, primarily reflects costs associated with nonrecurring contractual liabilities and respective assessments, and certain legal matters related to the previously disclosed temporary COVID-19 park closures. For the three months ended December 31, 2023, primarily reflects costs associated with nonrecurring contractual liabilities related to the previously disclosed temporary COVID-19 park closures.

For the three months and year ended December 31, 2022, primarily reflects costs associated with certain legal matters related to the temporary COVID-19 park closures.

(g) Reflects the impact of expenses, net of insurance recoveries and adjustments, incurred primarily related to certain 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 year ended December 31, 2022, includes approximately $3.6 million related to a legal settlement.

(h)Adjusted EBITDA is defined as net income before income tax expense, interest expense, depreciation and amortization, as further adjusted to exclude certain non-cash, and other items as described above.

(i) The Company’s Debt Agreements permit the calculation of certain covenants to be based on Covenant 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 24 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 Debt Agreements and does not impact the Company’s reported GAAP net income.

(j) The Debt Agreements permit the Company’s calculation of certain covenants to be based on Covenant Adjusted EBITDA as defined above, for the last twelve-month period further adjusted for certain costs as permitted by the Debt Agreements including recruiting and retention expenses, public company compliance costs and litigation and arbitration costs, if any.

(k) Covenant Adjusted EBITDA is defined in the Debt Agreements as Adjusted EBITDA for the last twelve-month period further adjusted for net annualized estimated savings among other adjustments as described in footnote (i) and (j) above.

(l) Free Cash Flow is defined as net cash provided by (used in) operating activities less capital expenditures.

(m) Reflects capital expenditures during the respective period for park rides, attractions and maintenance activities. Certain amounts relating to prior period results were reclassified to conform to current period presentation. These reclassifications have not changed the results of operations of the prior period.

(n) Reflects capital expenditures during the respective period for park expansion, new properties, revenue and/or expense return on investment (“ROI”) projects. Certain amounts relating to prior period results were reclassified to conform to current period presentation. These reclassifications have not changed the results of operations of the prior period.

(o) Calculated as total revenues divided by attendance.

(p) Calculated as admissions revenue divided by attendance.

(q) Calculated as food, merchandise and other revenue divided by attendance.

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v3.24.0.1

Document And Entity Information	Feb. 28, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Feb. 28, 2024
Entity Registrant Name	United Parks & Resorts Inc.
Entity Central Index Key	0001564902
Entity Emerging Growth Company	false
Entity File Number	001-35883
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	27-1220297
Entity Address, Address Line One	6240 Sea Harbor Drive
Entity Address, City or Town	Orlando
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	32821
City Area Code	407
Local Phone Number	226-5011
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	PRKS
Security Exchange Name	NYSE

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