Another quarterly report, another report of losses as SeaWorld Parks and Entertainment struggles to find their foothold. On Tuesday SEAS reported their losses for the 3rd quarter of 2017 at around $47 million, and a loss in attendance company wide at 6.2%. The biggest drop comes from San Diego and Orlando. In the Orlando and Tampa areas, losses are blamed on Hurricane Irma, which came on shore just after Labor Day weekend. That meant that a lot of Floridians who would have gone to the parks were busy shuttering for the storm instead. No real reason is given for San Diego, but attendance has been pretty much in decline since the Blackfish controversy started, and has only continued to decrease over the years.
Here’s the official statement:
- Total revenues were $437.7 million, compared to $485.3 million in the third quarter of 2016. Net income was $55.0 million, or $0.64per diluted share, as compared to net income of $65.7 million, or $0.77 per diluted share, in the third quarter of 2016.
- Attendance in the third quarter of 2017 declined by approximately 732,000 guests compared to the prior year third quarter. Attendance was adversely impacted by a decline in U.S. domestic and international attendance, largely concentrated at the company’s parks in Orlando and San Diego, as well as the effects of Hurricanes Irma and Harvey.
- The company expects to achieve its targeted $40 million in net cost savings by the end of 2018. The company has also identified an additional $25.0 million in cost savings opportunities which is inclusive of the new restructuring program executed in October to increase efficiencies, reduce duplication of functions, and improve operations.
- With less than 15% of the company’s expected 2017 attendance remaining in November and December, the company has narrowed its 2017 Adjusted EBITDA[1] guidance range to $280 million to $295 million, primarily as a result of the weather impacts mentioned previously.
In other news, the company also announced the appointment of a new member to the SeaWorld board, Scott Ross from Hill Path Capital.
“We welcome Scott to the Board and look forward to working together on behalf of all our shareholders and other important stakeholders,” said SeaWorld Chairman Yoshikazu Maruyama. “Scott has a strong track record of working collaboratively with companies in which he invests to help build long-term value.”
“SeaWorld Entertainment owns and operates a diverse portfolio of high quality, differentiated and irreplaceable entertainment assets with tremendous long-term potential. I have great respect for the SeaWorld Board and management team and I look forward to working closely with them to drive increased value for all shareholders,” Mr. Ross said.
Don Robinson, lead independent director of SeaWorld said, “Scott brings valuable insights to the Board given his financial background, extensive experience as a director, and his perspective as a significant SeaWorld shareholder.”
SeaWorld definitely needs some kind of change to happen. Over the past few months, rumors began to grow and rumble that an outside source was looking to purchase SeaWorld. Merlin was rumored to be in talks, after the company had said they’d like to get their hands on the Busch Gardens properties. Other companies were also rumored to be interested in the parks, most of which would take the brand overseas to other markets like Europe.
Still, if the company wants to right itself, it’s going to have to make some pretty big changes. First one would expect would be to see cuts in operational costs. That would mean that some year round parks could go seasonal. It wouldn’t be unexpected to see SeaWorld San Diego go seasonal throughout parts of the year to save costs. At the same time, the company can’t let up on it’s efforts to bring new rides and experiences into the parks.
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