United Parks & Resorts Inc 10-Q for FY2023 Q3

United Parks & Resorts Inc. (PRKS)

10-Q 2023-11-09 For: 2023-09-30

Added on April 07, 2026

About this 10-Q

United Parks & Resorts Inc filed this 10-Q on November 9, 2023, covering the quarter ended September 30, 2023 (FY2023 Q3).

Headline figures

Quarter ended September 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $548.25M; down 3.0% from $565.21M a year earlier
Net income: $123.56M; down 8.2% from net income of $134.56M a year earlier
Diluted EPS: $1.92; down 3.5% from $1.99 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	☐


		Page No.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS		2

PART I.	FINANCIAL INFORMATION	5

Item 1.	Unaudited Condensed Consolidated Financial Statements	5

	Unaudited Condensed Consolidated Balance Sheets	5

	Unaudited Condensed Consolidated Statements of Operations	6

	Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Deficit	7

	Unaudited Condensed Consolidated Statements of Cash Flows	9

	Notes to Unaudited Condensed Consolidated Financial Statements	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31

Item 4.	Controls and Procedures	32

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	34

Item 1A.	Risk Factors	34

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34

Item 3.	Defaults Upon Senior Securities	34

Item 4.	Mine Safety Disclosures	34

Item 5.	Other Information	35

Item 6.	Exhibits	35
	Signatures	36


	September 30,			December 31,
	2023			2022
Assets
Current assets:
Cash and cash equivalents	$	215,226		$	79,196
Accounts receivable, net		80,098			71,050
Inventories		54,623			55,190
Prepaid expenses and other current assets		25,888			28,260
Total current assets		375,835			233,696
Property and equipment, at cost		3,766,620			3,576,092
Accumulated depreciation		(1,958,429	)		(1,869,413	)
Property and equipment, net		1,808,191			1,706,679
Goodwill		66,278			66,278
Trade names/trademarks, net		157,000			157,000
Right of use assets-operating leases		127,814			130,479
Deferred tax assets, net		11,274			12,332
Other assets, net		29,150			19,323
Total assets	$	2,575,542		$	2,325,787
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable and accrued expenses	$	146,719		$	159,947
Current maturities of long-term debt		12,000			12,000
Operating lease liabilities		3,371			3,387
Accrued salaries, wages and benefits		24,412			17,423
Deferred revenue		161,082			169,535
Other accrued liabilities		58,892			46,914
Total current liabilities		406,476			409,206
Long-term debt, net		2,094,667			2,099,059
Long-term operating lease liabilities		113,057			115,396
Deferred tax liabilities, net		157,708			96,627
Other liabilities		56,030			43,163
Total liabilities		2,827,938			2,763,451
Commitments and contingencies (Note 8)
Stockholders’ Deficit:
Preferred stock, $0.01 par value—authorized, 100,000,000 shares, no shares issued or outstanding at September 30, 2023 and December 31, 2022		—			—
Common stock, $0.01 par value—authorized, 1,000,000,000 shares; 96,634,322 and 96,287,771 shares issued at September 30, 2023 and December 31, 2022, respectively		966			963
Additional paid-in capital		719,134			710,151
Retained earnings		370,046			175,903
Treasury stock, at cost (32,690,289 and 32,376,539 shares at September 30, 2023 and December 31, 2022, respectively)		(1,342,542	)		(1,324,681	)
Total stockholders’ deficit		(252,396	)		(437,664	)
Total liabilities and stockholders’ deficit	$	2,575,542		$	2,325,787


	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2023			2022			2023		2022
Net revenues:
Admissions	$	299,785		$	313,574		$	733,542	$	739,941
Food, merchandise and other		248,462			251,633			604,080		600,776
Total revenues		548,247			565,207			1,337,622		1,340,717
Costs and expenses:
Cost of food, merchandise and other revenues		40,431			41,385			101,862		105,943
Operating expenses (exclusive of depreciation and amortization shown separately below)		205,808			215,899			574,210		559,320
Selling, general and administrative expenses		59,705			53,082			176,152		155,299
Severance and other separation costs		(139	)		—			521		113
Depreciation and amortization		39,171			37,216			114,396		114,379
Total costs and expenses		344,976			347,582			967,141		935,054
Operating income		203,271			217,625			370,481		405,663
Other (income) expense, net		(21	)		(66	)		20		(110	)
Interest expense		37,052			30,556			110,407		82,736
Income before income taxes		166,240			187,135			260,054		323,037
Provision for income taxes		42,685			52,578			65,911		80,857
Net income	$	123,555		$	134,557		$	194,143	$	242,180
Earnings per share:
Earnings per share, basic	$	1.93		$	2.00		$	3.04	$	3.39
Earnings per share, diluted	$	1.92		$	1.99		$	3.01	$	3.36
Weighted average common shares outstanding:
Basic		63,954			67,176			63,955		71,450
Diluted		64,319			67,569			64,425		72,130


	Shares of Common Stock Issued			Common Stock			Additional Paid-In Capital			Retained Earnings			Treasury Stock, at Cost			Total Stockholders' Deficit
Balance at December 31, 2022		96,287,771		$	963		$	710,151		$	175,903		$	(1,324,681	)	$	(437,664	)
Equity-based compensation		—			—			4,482			—			—			4,482
Vesting of restricted shares		273,134			3			(3	)		—			—			—
Shares withheld for tax withholdings		(86,914	)		(1	)		(5,568	)		—			—			(5,569	)
Exercise of stock options		22,793			—			565			—			—			565
Net loss		—			—			—			(16,467	)		—			(16,467	)
Balance at March 31, 2023		96,496,784			965			709,627			159,436			(1,324,681	)		(454,653	)
Equity-based compensation		—			—			3,725			—			—			3,725
Vesting of restricted shares		53,735			—			—			—			—			—
Shares withheld for tax withholdings		(13,118	)		—			(771	)		—			—			(771	)
Exercise of stock options		45,248			1			1,078			—			—			1,079
Repurchase of 235,000 shares of treasury stock, at cost		—			—			—			—			(13,947	)		(13,947	)
Net income		—			—			—			87,055			—			87,055
Balance at June 30, 2023		96,582,649			966			713,659			246,491			(1,338,628	)		(377,512	)
Equity-based compensation		—			—			4,602			—			—			4,602
Vesting of restricted shares		20,986			—			—			—			—			—
Shares withheld for tax withholdings		(4,289	)		—			(221	)		—			—			(221	)
Exercise of stock options		34,976			—			1,094			—			—			1,094
Repurchase of 78,750 shares of treasury stock, at cost		—			—			—			—			(3,914	)		(3,914	)
Net income		—			—			—			123,555			—			123,555
Balance at September 30, 2023		96,634,322		$	966		$	719,134		$	370,046		$	(1,342,542	)	$	(252,396	)


	For the Nine Months Ended September 30,
	2023			2022
Cash Flows From Operating Activities:
Net income	$	194,143		$	242,180
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		114,396			114,379
Amortization of debt issuance costs and discounts		4,608			4,685
Deferred income tax provision		62,139			78,056
Equity-based compensation		12,809			13,975
Other, including loss on sale or disposal of assets, net		22,236			11,906
Changes in assets and liabilities:
Accounts receivable		(13,181	)		1,160
Inventories		413			(30,739	)
Prepaid expenses and other current assets		3,699			(4,401	)
Accounts payable and accrued expenses		(6,823	)		11,176
Accrued salaries, wages and benefits		6,989			(2,996	)
Deferred revenue		(4,383	)		17,815
Other accrued liabilities		9,095			7,779
Right-of-use assets and operating lease liabilities		329			469
Other assets and liabilities		(8,012	)		3,430
Net cash provided by operating activities		398,457			468,874
Cash Flows From Investing Activities:
Capital expenditures		(234,218	)		(150,729	)
Net cash used in investing activities		(234,218	)		(150,729	)
Cash Flows From Financing Activities:
Repayments of long-term debt		(9,000	)		(9,000	)
Proceeds from draws on revolving credit facility		20,000			—
Repayments of revolving credit facility		(20,000	)		—
Purchase of treasury stock		(17,861	)		(617,756	)
Payment of tax withholdings on equity-based compensation through shares withheld		(6,561	)		(22,182	)
Exercise of stock options		2,738			2,695
Debt issuance costs		—			(469	)
Other financing activities		(649	)		(427	)
Net cash used in financing activities		(31,333	)		(647,139	)
Change in Cash and Cash Equivalents, including Restricted Cash		132,906			(328,994	)
Cash and Cash Equivalents, including Restricted Cash—Beginning of period		82,320			444,486
Cash and Cash Equivalents, including Restricted Cash—End of period	$	215,226		$	115,492
Supplemental Disclosure of Noncash Investing and Financing Activities:
Capital expenditures in accounts payable	$	34,466		$	32,671
Right-of-use assets obtained in exchange for financing lease obligations	$	2,900		$	5,298


	For the Three Months Ended September 30,
	2023						2022
	Net Income		Shares		Per Share Amount		Net Income		Shares		Per Share Amount
	(In thousands, except per share amounts)
Basic earnings per share	$	123,555		63,954	$	1.93	$	134,557		67,176	$	2.00
Effect of dilutive incentive-based awards				365						393
Diluted earnings per share	$	123,555		64,319	$	1.92	$	134,557		67,569	$	1.99


Years Ending December 31:	(In thousands)
Remainder of 2023	$	3,000
2024		12,000
2025		239,500
2026		12,000
2027		12,000
Thereafter		1,850,000
Total	$	2,128,500


	For the Three Months Ended
	September 30,						Variance
	2023			2022			#			%
Summary Financial Data:	(In thousands, except per capita data)
Net revenues:
Admissions	$	299,785		$	313,574		$	(13,789	)		(4.4	%)
Food, merchandise and other		248,462			251,633			(3,171	)		(1.3	%)
Total revenues		548,247			565,207			(16,960	)		(3.0	%)
Costs and expenses:
Cost of food, merchandise and other revenues		40,431			41,385			(954	)		(2.3	%)
Operating expenses (exclusive of depreciation and amortization shown separately below)		205,808			215,899			(10,091	)		(4.7	%)
Selling, general and administrative expenses		59,705			53,082			6,623			12.5	%
Severance and other separation costs		(139	)		—			(139	)	NM
Depreciation and amortization		39,171			37,216			1,955			5.3	%
Total costs and expenses		344,976			347,582			(2,606	)		(0.7	%)
Operating income		203,271			217,625			(14,354	)		(6.6	%)
Other income, net		(21	)		(66	)		45			68.2	%
Interest expense		37,052			30,556			6,496			21.3	%
Income before income taxes		166,240			187,135			(20,895	)		(11.2	%)
Provision for income taxes		42,685			52,578			(9,893	)		(18.8	%)
Net income	$	123,555		$	134,557		$	(11,002	)		(8.2	%)
Other data:
Attendance		7,129			7,336			(207	)		(2.8	%)
Total revenue per capita	$	76.90		$	77.05		$	(0.15	)		(0.2	%)
Admission per capita	$	42.05		$	42.75		$	(0.70	)		(1.6	%)
In-park per capita spending	$	34.85		$	34.30		$	0.55			1.6	%


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,				Last Twelve Months Ended September 30,
	2023		2022		2023		2022		2023
	(Unaudited, in thousands)
Net income	$	123,555	$	134,557	$	194,143	$	242,180	$	243,153
Provision for income taxes		42,685		52,578		65,911		80,857		83,937
Interest expense		37,052		30,556		110,407		82,736		145,172
Depreciation and amortization		39,171		37,216		114,396		114,379		152,637
Equity-based compensation expense (a)		4,644		4,472		13,715		15,554		17,918
Loss on impairment or disposal of assets and certain non-cash expenses(b)		8,723		3,540		22,985		12,555		24,648
Business optimization, development and strategic initiative costs (c)		6,662		4,656		28,191		14,050		33,987
Certain investment costs and other taxes		1,147		53		1,309		1,053		1,384
COVID-19 related incremental costs (d)		1,092		4,957		8,760		5,930		9,519
Other adjusting items (e)		1,666		1,598		3,239		5,275		4,377
Adjusted EBITDA (f)	$	266,397	$	274,183	$	563,056	$	574,569	$	716,732
Items added back to Covenant Adjusted EBITDA as defined in the Debt Agreements:
Estimated cost savings (g)										25,200
Other adjustments as defined in the Debt Agreements (h)										6,522
Covenant Adjusted EBITDA (i)									$	748,454


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)
July 1, 2023	July 31, 2023		—		—		—	$	42,424,727
August 1, 2023	August 31, 2023		83,039	$	49.80		78,750		38,510,748
September 1, 2023	September 30, 2023		—		—		—		38,510,748
			83,039				78,750	$	38,510,748


Exhibit No.		Description

10.1*†		Form of Performance Stock Unit Grant Notice and Restricted Stock Unit Agreement (Employees – Annual Incentive Plan Award)

10.2*†		Amended and Restated Outside Director Compensation Policy, effective January 1, 2023

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*		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 September 30, 2023, formatted in Inline XBRL


		SEAWORLD ENTERTAINMENT, INC.
		(Registrant)
Date: November 9, 2023		By: /s/ James W. Forrester, Jr.
		James W. Forrester, Jr.
		Interim Chief Financial Officer and Treasurer
		(Principal Financial Officer)

Date: November 9, 2023		By: /s/ Shekufeh Shirazi Boyle
		Shekufeh Shirazi Boyle
		Chief Accounting Officer
		(Principal Accounting Officer)


Performance Component	Performance Component Percentage (i.e. Weighting*)	Metric Defined in Exhibit A, Section:
SEAS Adjusted EBITDA	60%	1(b)(A)
SEAS Guest Satisfaction	20%	1(b)(B)
Individual Goal Discretionary	20%	Discretionary
TOTAL	100%


Actual Performance Percentage for the Adjusted EBITDA Component*	Percentage of Restricted Stock Units Earned for the Adjusted EBITDA Component
Actual Performance Percentage less than 90%	0%
Actual Performance Percentage equal to 90%	33%
Actual Performance Percentage equal to 95%	50%
Actual Performance Percentage equal to 100%	100%
Actual Performance Percentage greater than 100%	No maximum. An additional 0.5% for each $1 million increase above 100% payout.


Actual Performance Percentage for the SEAS Guest Satisfaction Component**	Percentage of Restricted Stock Units Earned for the SEAS Guest Satisfaction Component
Actual Performance Percentage less than 75% of combined Park Guest Satisfaction targets and subject to the “AIP Park EBITDA Gate” (defined below)	0%
Actual Performance Percentage equal to 75% of combined Park Guest Satisfaction targets and subject to the AIP Park EBITDA Gate	75%
Actual Performance Percentage equal to 100% of combined Park Guest Satisfaction targets and subject to the AIP Park EBITDA Gate	100%
Actual Performance Percentage greater than 100% of combined Park Guest Satisfaction targets and subject to the AIP Park EBITDA Gate	125%


Committee	Annual Committee Chairperson Fee*
Audit Committee		$30,000
Compensation Committee		$25,000
Nominating and Corporate Governance		$25,000
Revenue Committee		$25,000
Special/Ad Hoc Committee		$30,000**


Committee	Annual Committee Member Fee*
Audit Committee		$20,000
Compensation Committee		$15,000
Nominating and Corporate Governance		$15,000
Revenue Committee		$15,000
Special/Ad Hoc Committee		$20,000**


Date: November 9, 2023	Signature:	/s/ Marc G. Swanson
		Marc G. Swanson
		Chief Executive Officer
		(Principal Executive Officer)


Date: November 9, 2023	Signature:	/s/ James W. Forrester, Jr.
		James W. Forrester, Jr.
		Interim Chief Financial Officer and Treasurer
		(Principal Financial Officer)