United Parks & Resorts Inc 10-Q for FY2022 Q2

United Parks & Resorts Inc. (PRKS)

10-Q 2022-08-05 For: 2022-06-30

Added on April 07, 2026

About this 10-Q

United Parks & Resorts Inc filed this 10-Q on August 5, 2022, covering the quarter ended June 30, 2022 (FY2022 Q2).

Headline figures

Quarter ended June 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $504.82M; up 14.8% from $439.78M a year earlier
Net income: $116.61M; down 8.7% from net income of $127.76M a year earlier
Diluted EPS: $1.62; up 1.9% from $1.59 a year earlier

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Delaware		27-1220297
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
6240 Sea Harbor Drive Orlando, Florida		32821
(Address of principal executive offices)		(Zip Code)


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

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐

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. ☐

		Page No.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS		1

PART I.	FINANCIAL INFORMATION	4

Item 1.	Unaudited Condensed Consolidated Financial Statements	4

	Unaudited Condensed Consolidated Balance Sheets	4

	Unaudited Condensed Consolidated Statements of Operations	5

	Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Deficit	6

	Unaudited Condensed Consolidated Statements of Cash Flows	7

	Notes to Unaudited Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34

Item 4.	Controls and Procedures	34

PART II.	OTHER INFORMATION	36

Item 1.	Legal Proceedings	36

Item 1A.	Risk Factors	36

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36

Item 3.	Defaults Upon Senior Securities	37

Item 4.	Mine Safety Disclosures	37

Item 5.	Other Information	37

Item 6.	Exhibits	38

	Signatures	39

	June 30,			December 31,
	2022			2021
Assets
Current assets:
Cash and cash equivalents	$	160,830		$	443,707
Accounts receivable, net		84,001			76,948
Inventories		56,641			29,478
Prepaid expenses and other current assets		28,682			17,263
Total current assets		330,154			567,396
Property and equipment, at cost		3,479,343			3,385,308
Accumulated depreciation		(1,809,262	)		(1,740,144	)
Property and equipment, net		1,670,081			1,645,164
Goodwill		66,278			66,278
Trade names/trademarks, net		157,000			157,000
Right of use assets-operating leases		133,191			132,217
Deferred tax assets, net		22,528			23,995
Other assets, net		17,378			18,266
Total assets	$	2,396,610		$	2,610,316
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable and accrued expenses	$	172,263		$	134,311
Current maturities of long-term debt		12,000			12,000
Operating lease liabilities		3,088			2,895
Accrued salaries, wages and benefits		16,419			22,156
Deferred revenue		235,542			154,793
Other accrued liabilities		59,124			45,811
Total current liabilities		498,436			371,966
Long-term debt, net		2,101,955			2,104,835
Long-term operating lease liabilities		118,180			117,046
Deferred tax liabilities, net		38,053			12,803
Other liabilities		41,437			37,582
Total liabilities		2,798,061			2,644,232
Commitments and contingencies (Note 8)
Stockholders’ Deficit:
Preferred stock, $0.01 par value—authorized, 100,000,000 shares, no shares issued or outstanding at June 30, 2022 and December 31, 2021		—			—
Common stock, $0.01 par value—authorized, 1,000,000,000 shares; 96,212,193 and 95,541,992 shares issued at June 30, 2022 and December 31, 2021, respectively		962			955
Additional paid-in capital		700,866			711,474
Accumulated deficit		(7,664	)		(115,287	)
Treasury stock, at cost (27,830,224 and 19,953,042 shares at June 30, 2022 and December 31, 2021, respectively)		(1,095,615	)		(631,058	)
Total stockholders’ deficit		(401,451	)		(33,916	)
Total liabilities and stockholders’ deficit	$	2,396,610		$	2,610,316


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the Three Months Ended					For the Six Months Ended
	June 30,					June 30,
	2022			2021		2022			2021
Net revenues:
Admissions	$	275,505		$	243,225	$	426,367		$	339,005
Food, merchandise and other		229,312			196,559		349,143			272,699
Total revenues		504,817			439,784		775,510			611,704
Costs and expenses:
Cost of food, merchandise and other revenues		41,518			34,173		64,558			49,115
Operating expenses (exclusive of depreciation and amortization shown separately below)		190,496			157,307		343,421			265,079
Selling, general and administrative expenses		56,158			43,190		102,217			74,654
Severance and other separation costs		83			1,496		113			1,582
Depreciation and amortization		38,551			36,247		77,163			72,805
Total costs and expenses		326,806			272,413		587,472			463,235
Operating income		178,011			167,371		188,038			148,469
Other (income) expense, net		(32	)		21		(44	)		195
Interest expense		26,810			31,127		52,180			62,083
Income before income taxes		151,233			136,223		135,902			86,191
Provision for income taxes		34,623			8,461		28,279			3,313
Net income	$	116,610		$	127,762	$	107,623		$	82,878
Earnings per share:
Earnings per share, basic	$	1.63		$	1.62	$	1.46		$	1.05
Earnings per share, diluted	$	1.62		$	1.59	$	1.45		$	1.03
Weighted average common shares outstanding:
Basic		71,686			78,986		73,623			78,724
Diluted		72,168			80,177		74,449			80,123

	Shares of Common Stock Issued			Common Stock			Additional Paid-In Capital			Accumulated Deficit			Treasury Stock, at Cost			Total Stockholders' Deficit
Balance at December 31, 2021		95,541,992		$	955		$	711,474		$	(115,287	)	$	(631,058	)	$	(33,916	)
Equity-based compensation		—			—			6,982			—			—			6,982
Vesting of restricted shares		361,403			4			(4	)		—			—			—
Shares withheld for tax withholdings		(111,865	)		(1	)		(7,737	)		—			—			(7,738	)
Exercise of stock options		46,503			—			1,127			—			—			1,127
Repurchase of 1,535,427 shares of treasury stock, at cost		—			—			—			—			(109,905	)		(109,905	)
Net loss		—			—			—			(8,987	)		—			(8,987	)
Balance at March 31, 2022		95,838,033			958			711,842			(124,274	)		(740,963	)		(152,437	)
Equity-based compensation		—			—			2,549			—			—			2,549
Vesting of restricted shares		545,819			6			(6	)		—			—			—
Shares withheld for tax withholdings		(201,442	)		(2	)		(14,327	)		—			—			(14,329	)
Exercise of stock options		29,783			—			808			—			—			808
Repurchase of 6,341,755 shares of treasury stock, at cost		—			—			—			—			(354,652	)		(354,652	)
Net income		—			—			—			116,610			—			116,610
Balance at June 30, 2022		96,212,193		$	962		$	700,866		$	(7,664	)	$	(1,095,615	)	$	(401,451	)

	Shares of Common Stock Issued			Common Stock			Additional Paid-In Capital			Accumulated Deficit			Treasury Stock, at Cost			Total Stockholders' Deficit
Balance at December 31, 2020		94,652,248		$	946		$	680,360		$	(371,800	)	$	(415,309	)	$	(105,803	)
Equity-based compensation		—			—			4,473			—			—			4,473
Vesting of restricted shares		130,834			1			(1	)		—			—			—
Shares withheld for tax withholdings		(41,271	)		—			(1,971	)		—			—			(1,971	)
Exercise of stock options		116,634			1			2,392			—			—			2,393
Net loss		—			—			—			(44,884	)		—			(44,884	)
Balance at March 31, 2021		94,858,445			948			685,253			(416,684	)		(415,309	)		(145,792	)
Equity-based compensation		—			—			5,634			—			—			5,634
Vesting of restricted shares		653,146			7			(7	)		—			—			—
Shares withheld for tax withholdings		(213,601	)		(3	)		(10,554	)		—			—			(10,557	)
Exercise of stock options		82,491			1			1,638			—			—			1,639
Net income		—			—			—			127,762			—			127,762
Balance at June 30, 2021		95,380,481		$	953		$	681,964		$	(288,922	)	$	(415,309	)	$	(21,314	)

	For the Six Months Ended June 30,
		2022		2021
Cash Flows From Operating Activities:
Net income	$	107,623		$	82,878
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		77,163			72,805
Amortization of debt issuance costs and discounts		3,130			3,323
Deferred income tax provision		26,530			682
Equity-based compensation		9,531			10,107
Other, including loss on sale or disposal of assets, net		8,539			2,112
Changes in assets and liabilities:
Accounts receivable		(9,690	)		(75,345	)
Inventories		(27,126	)		5,647
Prepaid expenses and other current assets		(10,101	)		(3,896	)
Accounts payable and accrued expenses		34,902			20,361
Accrued salaries, wages and benefits		(5,737	)		8,464
Deferred revenue		80,778			121,815
Other accrued liabilities		4,699			845
Right-of-use assets and operating lease liabilities		354			224
Other assets and liabilities		(961	)		(1,944	)
Net cash provided by operating activities		299,634			248,078
Cash Flows From Investing Activities:
Capital expenditures		(101,048	)		(44,981	)
Net cash used in investing activities		(101,048	)		(44,981	)
Cash Flows From Financing Activities:
Repayments of long-term debt		(6,000	)		(7,752	)
Purchase of treasury stock		(454,801	)		—
Payment of tax withholdings on equity-based compensation through shares withheld		(22,067	)		(12,528	)
Exercise of stock options		1,935			4,032
Debt issuance costs		(469	)		—
Other financing activities		(371	)		(4,357	)
Net cash used in financing activities		(481,773	)		(20,605	)
Change in Cash and Cash Equivalents, including Restricted Cash		(283,187	)		182,492
Cash and Cash Equivalents, including Restricted Cash—Beginning of period		444,486			435,225
Cash and Cash Equivalents, including Restricted Cash—End of period	$	161,299		$	617,717
Supplemental Disclosure of Noncash Investing and Financing Activities:
Capital expenditures in accounts payable	$	25,599		$	18,737
Treasury stock purchases not yet settled in other accrued liabilities	$	9,756		$	—
Other financing arrangements	$	—		$	4,239

	For the Three Months Ended June 30,
	2022						2021
	Net Income		Shares		Per Share Amount		Net Income		Shares		Per Share Amount
	(In thousands, except per share amounts)
Basic earnings per share	$	116,610		71,686	$	1.63	$	127,762		78,986	$	1.62
Effect of dilutive incentive-based awards				482						1,191
Diluted earnings per share	$	116,610		72,168	$	1.62	$	127,762		80,177	$	1.59

Years Ending December 31:	(In thousands)
Remainder of 2022	$	6,000
2023		12,000
2024		12,000
2025		239,500
2026		12,000
Thereafter		1,862,000
Total	$	2,143,500

	For the Three Months Ended
	June 30,					Variance
	2022			2021		#			%
Summary Financial Data:	(In thousands, except per capita data)
Net revenues:
Admissions	$	275,505		$	243,225	$	32,280			13.3	%
Food, merchandise and other		229,312			196,559		32,753			16.7	%
Total revenues		504,817			439,784		65,033			14.8	%
Costs and expenses:
Cost of food, merchandise and other revenues		41,518			34,173		7,345			21.5	%
Operating expenses (exclusive of depreciation and amortization shown separately below)		190,496			157,307		33,189			21.1	%
Selling, general and administrative expenses		56,158			43,190		12,968			30.0	%
Severance and other separation costs		83			1,496		(1,413	)		(94.5	%)
Depreciation and amortization		38,551			36,247		2,304			6.4	%
Total costs and expenses		326,806			272,413		54,393			20.0	%
Operating income		178,011			167,371		10,640			6.4	%
Other (income) expense, net		(32	)		21		(53	)	NM
Interest expense		26,810			31,127		(4,317	)		(13.9	%)
Income before income taxes		151,233			136,223		15,010			11.0	%
Provision for income taxes		34,623			8,461		26,162		NM
Net income	$	116,610		$	127,762	$	(11,152	)		(8.7	%)
Other data:
Attendance		6,264			5,809		455			7.8	%
Total revenue per capita	$	80.59		$	75.71	$	4.88			6.4	%
Admission per capita	$	43.98		$	41.87	$	2.11			5.0	%
In-park per capita spending	$	36.61		$	33.84	$	2.77			8.2	%

	For the Three Months Ended June 30,				For the Six Months Ended June 30,					Last Twelve Months Ended June 30,
	2022		2021		2022		2021			2022
	(Unaudited, in thousands)
Net income	$	116,610	$	127,762	$	107,623	$	82,878		$	281,258
Provision for income taxes		34,623		8,461		28,279		3,313			24,802
Loss on early extinguishment of debt and write-off of discounts and debt issuance costs^(a)		—		—		—		—			58,827
Interest expense		26,810		31,127		52,180		62,083			106,739
Depreciation and amortization		38,551		36,247		77,163		72,805			153,018
Equity-based compensation expense ^(b)		3,205		6,782		11,082		11,255			40,845
Loss on impairment or disposal of assets and certain non-cash expenses^(c)		4,411		3,079		9,015		3,687			12,427
Business optimization, development and strategic initiative costs ^(d)		5,790		2,835		9,394		3,347			14,806
Certain investment costs and other taxes		599		329		1,000		416			1,414
COVID-19 related incremental costs^(e)		623		2,192		973		4,368			19,167
Other adjusting items^(f)		3,224		2		3,677		(147	)		5,126
Adjusted EBITDA ^(g)	$	234,446	$	218,816	$	300,386	$	244,005		$	718,429
Items added back to Covenant Adjusted EBITDA as defined in the Debt Agreements:
Estimated cost savings^(h)											4,100
Other adjustments as defined in the Debt Agreements⁽ⁱ⁾											19,329
Covenant Adjusted EBITDA ⁽^j)										$	741,858

Period Beginning	Period Ended	Total Number of Shares Purchased⁽¹⁾⁽²⁾		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs⁽²⁾		Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs⁽²⁾
April 1, 2022	April 30, 2022		2,220,389	$	69.33		2,027,659	$	—
May 1, 2022	May 31, 2022		1,863,821	$	53.64		1,855,169		150,507,911
June 1, 2022	June 30, 2022		2,458,987	$	46.80		2,458,927		35,442,792
			6,543,197				6,341,755	$	35,442,792

Exhibit No.		Description

10.1*		Incremental Amendment and Lender Joinder Agreement, dated as of June 9, 2022, by and among Goldman Sachs Lending Partners LLC, as an Incremental Revolving Facility Lender, SeaWorld Parks & Entertainment, Inc., and J.P. Morgan Chase Bank, N.A., as Administrative Agent

10.2*†		Letter Agreement dated May 11, 2022 between Elizabeth Castro Gulacsy and SeaWorld Entertainment, Inc.

10.3*†		Offer Letter of Employment, Agreed and Accepted the 16th day of June, 2022, between SeaWorld Entertainment, Inc. and Michelle Adams

10.4*†		Form of Performance Stock Unit Grant Notice and Restricted Stock Unit Agreement (Senior Leadership Team Executive Employees – Performance-Based Restricted Stock Units (fiscal 2022 awards))

31.1*		Certification of Periodic Report by Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002

31.2*		Certification of Periodic Report by Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002

32.1*		Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2*		Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS*		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH*		Inline XBRL Taxonomy Extension Schema Document.

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104		The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 has been formatted in Inline XBRL.

* †		Filed herewith. Identifies exhibits that consist of a management contract or compensatory plan or arrangement

		SEAWORLD ENTERTAINMENT, INC.
		(Registrant)



Date: August 5, 2022		By: /s/ Michelle F. Adams
		Michelle F. Adams
		Chief Financial Officer and Treasurer
		(Principal Financial and Accounting Officer)


Lender	Revolving Facility Commitment	Applicable Percentage
JPMorgan Chase Bank, N.A.	$80,000,000.00	20.51%
Deutsche Bank AG New York Branch	$72,500,000.00	18.59%
Goldman Sachs Bank USA	$67,500,000.00	17.31%
Citizens Bank, N.A.	$50,000,000.00	12.82%
Fifth Third Bank	$50,000,000.00	12.82%
Barclays Bank PLC	$45,000,000.00	11.54%
Citibank, N.A.	$20,000,000.00	5.13%
Goldman Sachs Lending Partners LLC	$5,000,000.00	1.28%
Total	$390,000,000.00	100%

Date: August 5, 2022	Signature:	/s/ Marc G. Swanson
		Marc G. Swanson
		Chief Executive Officer
		(Principal Executive Officer)

Date: August 5, 2022	Signature:	/s/ Michelle F. Adams
		Michelle F. Adams
		Chief Financial Officer and Treasurer
		(Principal Financial Officer)