SeaWorld Entertainment, Inc. Reports First Half 2013 Results

         SeaWorld Entertainment, Inc. Reports First Half 2013 Results

PR Newswire

ORLANDO, Fla., Aug. 13, 2013

ORLANDO, Fla., Aug.13, 2013 /PRNewswire/ --SeaWorld Entertainment, Inc.
(NYSE:SEAS), a leading theme park and entertainment company, today reported
financial results for the first half of 2013.

Highlights

  oRecord revenue of $649.9 million in the first half of 2013, an increase of
    $11.6 million or 2% compared to the first half of 2012.
  oAdjusted EBITDA^[1] of $138.1 million in the first half of 2013, an
    increase of $3.9 million or 3% compared to the first half of 2012.
  oAdjusted Free Cash Flow^[1] of $56.0 million in the first half of 2013, an
    increase of $30.8 million compared to the first half of 2012.
  oReaffirmed guidance for full year 2013 Adjusted EBITDA ^ in the range of
    $430 million to $440 million.
  oReduced long-term debt by $180.8 million in the first half of 2013.
  oCompleted re-financing of $1.4 billion Credit Facility at favorable terms
    and extended maturity date to May 2020.
  oDeclared a cash dividend of $0.20 per share (paid on July 1^st, 2013).

"We are pleased with our first half results particularly in light of a
challenging second quarter due to the unfavorable timing of Easter and adverse
weather conditions at many of our parks," Jim Atchison, President and CEO of
SeaWorld Entertainment, Inc. said. "With the strength of our business model,
the ongoing benefits of our pricing and yield management efforts, and strong
operational execution, we remain on track to end the year within our
previously disclosed Adjusted EBITDA guidance range of $430 to $440 million."


Year to Date Results
During the first half of 2013, the Company generated record total revenue of
$649.9 million, an increase of $11.6 million, or 2%, over the same period in
2012. Adjusted EBITDA in the first six months of 2013was $138.1 million, an
increase of $3.9 million, or 3%, over the first half of 2012. The Company
reported a net loss for the first six months of 2013 of $56.2 million, or
$(0.66) per diluted share. Adjusted Net Loss^[1] was $2.7 million, or $(0.03)
per diluted share, in the first half of 2013. In the prior year period, the
Company had incurred a net loss of $6.0 million, or $(0.07) per diluted
share. Adjusted Free Cash Flow ^ was $56.0 million, an increase of $30.8
million compared to the first six months of 2012.

The increase in total revenue during the first six months of 2013 was driven
by a total revenue per capita increase of 8% from $59.84 in the first half of
2012 to $64.59 in the first half of 2013, partially offset by the impact of
lower total attendance. Admission per capita (defined as admission revenue
divided by total attendance) increased by 10% from $36.78 to $40.49 in the
first half of 2012, primarily as a result of pricing and yield management
strategies, while in-park per capita spending (defined as food, merchandise,
and other revenue divided by total attendance) increased by 5% from $23.06 to
$24.10 due to targeted price increases along with increased penetration and
in-park offerings.

Attendance for first half of 2013 declined by 6% compared to the same period
in 2012 from approximately 10.7 to 10.1 million guests. The most significant
portion of the decline was an expected result of new pricing and yield
management strategies, which reduced attendance but increased total revenue
per capita. The next largest portion of the decline was a result of
unexpected adverse weather conditions at the Company's Florida and Virginia
parks during the second quarter and at all but one of the Company's park
locations in the month of June. The remainder of the decline was a result of
the unfavorable timing of Easter on March 31^st which caused an overlap with
the spring break holiday period for schools in many of the Company's key
markets.

Second Quarter 2013
During the second quarter of 2013, the Company generated total revenue of
$411.3 million, a decrease of $14.6 million, or 3%, over the same period in
2012. Adjusted EBITDA was $127.0 million, a decrease of $13.4 million, or
10%, over the second quarter of 2012. The Company reported a net loss for the
second quarter of 2013 of $15.9 million, or $(0.18) per diluted share.
Adjusted Net Income^[1] was $36.5 million, or $0.41 per diluted share, in the
second quarter of 2013. In the second quarter of 2012, the Company reported
net income of $39.1 million, or $0.47 per diluted share.

The decrease in total revenue in the second quarter of 2013 was driven by
lower attendance partially offset by a 7% increase in total revenue per capita
from $58.75 in the second quarter of 2012 to $62.67 in the second quarter of
2013. Admission per capita increased by 9% from $35.74 to $38.85 primarily as
a result of higher ticket pricing and yield management strategies while
in-park per capita spending increased by 3% from $23.01 to $23.81 due to
targeted price increases and increased in-park offerings.

Attendance during the second quarter declined by 9% from approximately 7.2
million in 2012 to 6.6 million guests in 2013. Attendance in the second
quarter of 2013 was impacted by the same issues as outlined in the
year-to-date results with an additional impact of attendance shifting out of
the second quarter into the first quarter due to the timing of Easter.

Other
As previously disclosed, in April 2013, the Company completed its initial
public offering of 29,900,000 shares of common stock at $27.00 per share. Net
proceeds were used to redeem $140.0 million in aggregate principal amount of
Senior Notes at a redemption price of 111.0% plus accrued and unpaid interest
therein, approximately $46.3 million was used to make a one-time payment to an
affiliate of Blackstone in connection with the termination of the 2009
Advisory Agreement, and $37.0 million was used to repay a portion of
outstanding indebtedness under the Company's Term Loan B. In connection with
the termination of the 2009 Advisory Agreement, the Company wrote-off
approximately $3.8 million in prepaid advisory fees during the second quarter
of 2013.

In May 2013, the Company entered into Amendment No. 5 to its Senior Secured
Credit Facilities that amended the terms of its existing Senior Secured Credit
Facilities to, among other things, refinance Term Loan A and Term Loan B into
new Term B-2 Loans, extend the final maturity date of the term loan
facilities, reduce future principal and interest payments and provide for
additional future borrowings.

In June 2013, the Company's Board of Directors declared a cash dividend of
$0.20 per share, which was paid on July 1, 2013, to all common stockholders of
record at the close of business on June 20, 2013.

Guidance
The following guidance is based on current management expectations. All
financial guidance amounts are estimates subject to change, including as a
result of matters discussed under the "Forward-Looking Statements" cautionary
language which follows and the Company undertakes no duty to update its
guidance.For the full year of 2013, the Company expects to generate revenue
in the range of $1.45 billion to $1.48 billion and Adjusted EBITDA in the
range of $430 million to $440 million.

Conference Call
The Company will hold a conference call today, Tuesday, August 13 at 5 p.m. ET
to discuss its second quarter 2013 financial results. The conference call
will be broadcast live on the Internet and the release and the conference call
can be accessed via the Company's website at seaworldentertainment.com by
clicking on the "Investor Relations" link located on the upper right corner of
that page. For those unable to participate in the live call, a replay of the
webcast will be available from 8 p.m. ET August 13, 2013 to 11:59 p.m. ET on
August 20, 2013 via the "Investor Relations" section of
seaworldentertainment.com or by dialing 1-877-870-5176 from anywhere in the
U.S. or 1-858-384-5517 from international locations, conference code 1865619.

Statement Regarding Non-GAAP Financial Measures
This earnings release and accompanying financial statement tables include
several supplemental non-GAAP financial measures, including Adjusted EBITDA,
Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Diluted Share, Free
Cash Flow and Adjusted Free Cash Flow. Adjusted EBITDA, Adjusted Net Income
(Loss), Adjusted Net Income (Loss) per Diluted Share, Free Cash Flow, and
Adjusted Free Cash Flow are not recognized terms under GAAP, should not be
considered in isolation or as a substitute for a measure of liquidity or
performance 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, Adjusted Net Income (Loss), Adjusted Net Income
(Loss) per Diluted Share, Free Cash Flow, Adjusted Free Cash Flow and other
non-GAAP financial measures have limitations that should be considered before
using these measures to evaluate the Company's liquidity or financial
performance. Adjusted EBITDA, Adjusted Net Income (Loss), Adjusted Net Income
(Loss) per Diluted Share, Free Cash Flow or Adjusted Free Cash Flow, as
presented, may not be comparable to similarly titled measures of other
companies due to varying methods of calculation.

Adjusted EBITDA is defined as net (loss) income before income tax expense
(benefit), interest expense, depreciation and amortization, as further
adjusted to exclude certain non-cash, and other items permitted in calculating
covenant compliance under the indenture governing the Company's existing
senior notes and the credit agreement governing the Company's senior secured
credit facilities. Adjusted EBITDA is a material component of these
covenants. Management presents Adjusted EBITDA because it believes that it
provides additional information to investors about the calculation of and
compliance with these financial covenants. Management also 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 evaluate a company's ability to meet
its debt service requirement, to estimate the value of a company and to make
informed investment decisions.

Adjusted Net Income (Loss) is defined as net income (loss) before the
after-tax impact of the advisory termination fee and the loss on early
extinguishment of debt. Adjusted Net Income (Loss) per Diluted Share is
calculated by dividing Adjusted Net Income (Loss) for the period by the
diluted shares outstanding. Management presents Adjusted Net Income (Loss)
and Adjusted Net Income (Loss) per Diluted Share to eliminate the impact of
items, net of tax, that management does not consider indicative of ongoing
operating performance due to their inherent unusual nature or because they
result from an event of a similar nature.

Free Cash Flow is defined as net cash provided by operating activities reduced
by capital expenditures. Adjusted Free Cash Flow is defined as Free Cash Flow
further adjusted by the one-time cash payment of the 2009 Advisory Agreement
termination fee. Management presents Free Cash Flow and Adjusted Free Cash
Flow because it believes it provides supplemental information to assist
investors in analyzing the Company's ability to generate liquidity from its
operating activities. Free Cash Flow and Adjusted Free Cash Flow has
limitations due to the fact that it does not represent the residual cash flow
available for discretionary expenditures as it does not take into
consideration certain other non-discretionary cash requirements, such as
mandatory principal payments on the Company's long-term debt.

The financial statement tables that accompany this press release include a
reconciliation of non-GAAP financial measures to the applicable most
comparable U.S. GAAP financial measures.

About SeaWorld Entertainment, Inc.
SeaWorld Entertainment, Inc. (NYSE: SEAS) is a leading theme park and
entertainment company delivering personal, interactive and educational
experiences that blend imagination with nature and enable its customers to
celebrate, connect with and care for the natural world we share. The Company
owns or licenses a portfolio of globally recognized brands including SeaWorld,
Shamu and Busch Gardens. Over its more than 50-year history, the Company has
built a diversified portfolio of 11 destination and regional theme parks that
are grouped in key markets across the United States, many of which showcase
its one-of-a-kind collection of approximately 67,000 marine and terrestrial
animals. The Company's theme parks feature a diverse array of rides, shows and
other attractions with broad demographic appeal which deliver memorable
experiences and a strong value proposition for its guests. In addition to its
theme parks, the Company has recently begun to leverage its brands into media,
entertainment and consumer products.

Copies of this and other news releases as well as additional information about
SeaWorld Entertainment, Inc. can be obtained online at
www.seaworldentertainment.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.

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 Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended, which are subject to the "safe harbor" created by
those sections. The Company generally uses the words "may", "will", "could",
"expect", "anticipate", "believe", "estimate", "plan", "intend", and 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, beliefs, business strategies, future
events, business conditions, results of operations, financial position and
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, estimates and projections, and
various assumptions, many of which, by their nature, are inherently uncertain
and beyond management's control. All expectations, beliefs 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 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 and
uncertainties that could cause actual results to differ materially from the
forward-looking statements contained in this press release, including among
others: various factors beyond management's control adversely affecting
discretionary spending and attendance at the Company's theme parks; inability
to protect intellectual property or the infringement on intellectual property
rights of others; incidents or adverse publicity concerning the Company's
theme parks; outbreak of infectious disease affecting the Company's animals;
change in federal and state regulations governing the treatment of animals;
and other risks, uncertainties and factors set forth in the section entitled
"Risk Factors" in the Company's final prospectus filed on April 18, 2013 with
the 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 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.seaworldentertainment.com).

^[1] This earnings release includes several metrics, including Adjusted
EBITDA, Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Diluted
Share, Free Cash Flow and Adjusted Free Cash Flow that are not calculated in
accordance with Generally Accepted Accounting Principles in the U.S. ("GAAP").
See "Statement Regarding Non-GAAP Financial Measures" section at the end of
this earnings release for the definitions of Adjusted EBITDA, Adjusted Net
Income (Loss), Adjusted Net Income (Loss) per Diluted Share, Free Cash Flow
and Adjusted Free Cash Flow and their reconciliation to their respective most
comparable financial measures calculated in accordance with GAAP.



SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
               For the Three                         For the Six Months
               Months Ended                         Ended
               June 30,           Change            June 30,           Change
               2013      2012      $         %       2013      2012      $         %
Net revenues:
Admissions     $        $       $         (2%)    $        $        $ 15,114  4%
               255,001   259,058  (4,057)           407,427   392,313
Food,
merchandise    156,291   166,824   (10,533)  (6%)    242,475   246,011   (3,536)   (1%)
and other
Total revenues 411,292   425,882   (14,590)  (3%)    649,902   638,324   11,578    2%
Costs and
expenses:
Cost of food,
merchandise    32,974    36,959    (3,985)   (11%)   52,802    55,659    (2,857)   (5%)
and
otherrevenues
Operating      194,674   205,370   (10,696)  (5%)    367,934   368,746   (812)     (0%)
expenses
Selling,
general and    62,168    49,028    13,140    27%     102,155   91,764    10,391    11%
administrative
Termination of
advisory       50,072    —         50,072    ND      50,072    —         50,072    ND
agreement
Depreciation
and            40,424    41,439    (1,015)   (2%)    81,832    77,348    4,484     6%
amortization
Total costs    380,312   332,796   47,516    14%     654,795   593,517   61,278    10%
and expenses
Operating      30,980    93,086    (62,106)  (67%)   (4,893)   44,807    (49,700)  (111%)
income (loss)
Other income,  107       733       (626)     (85%)   180       1,873     (1,693)   (90%)
net
Interest       22,926    28,909    (5,983)   (21%)   51,532    56,718    (5,186)   (9%)
expense
Loss on early
extinguishment
of debt and
write-off of   32,429    —         32,429    ND      32,429    —         32,429    ND
discounts and
deferred
financing
costs
(Loss) income
before income  (24,268)  64,910    (89,178)  (137%)  (88,674)  (10,038)  (78,636)  (783%)
taxes
(Benefit from)
provision for  (8,414)   25,790    (34,204)  (133%)  (32,460)  (4,024)   (28,436)  (707%)
income taxes
Net (loss)     $        $      $         (141%)  $        $       $         (835%)
income         (15,854)  39,120   (54,974)          (56,214)  (6,014)   (50,200)
(Loss)
earnings per
share:
Net (loss)     $      $                        $      $   
income per     (0.18)                              (0.66)    (0.07)
share, basic             0.47
Net (loss)     $      $                        $      $   
income per     (0.18)                              (0.66)    (0.07)
share, diluted           0.47
Weighted
average
commons shares
outstanding:
Basic          88,222    82,448                      85,510    82,436
Diluted        88,222    83,240                      85,510    82,436



SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(In thousands)
               For the Three                        For the Six
               Months Ended                         Months Ended
               June 30,           Change            June 30,           Change
               2013      2012     $         %       2013      2012     $         %
Net (loss)     $         $        $         (141%)  $         $        $         (835%)
income         (15,854)  39,120   (54,974)          (56,214)  (6,014)  (50,200)
(Benefit from)
provision for  (8,414)   25,790   (34,204)  (133%)  (32,460)  (4,024)  (28,436)  (707%)
income taxes
Loss on early
extinguishment
of debt and
write-off of   32,429    —        32,429    ND      32,429    —        32,429    ND
discounts and
deferred
financing
costs (a)
Interest       22,926    28,909   (5,983)   (21%)   51,532    56,718   (5,186)   (9%)
expense
Depreciation
and            40,424    41,439   (1,015)   (2%)    81,832    77,348   4,484     6%
amortization
Termination of
advisory       50,072    —        50,072    ND      50,072    —        50,072    ND
agreement (b)
Advisory fees  1,874     1,999    (125)     (6%)    2,799     2,811    (12)      (0%)
(c)
Equity-based
compensation   1,902     774      1,128     146%    2,222     1,041    1,181     113%
expense (d)
Debt
refinancing    781       —        781       ND      781       1,000    (219)     (22%)
costs (e)
Other
adjusting      732       —        732       ND      843       —        843       ND
items (f)
Other non-cash 88        2,322    (2,234)   (96%)   4,235     5,292    (1,057)   (20%)
expenses (g)
Adjusted       $         $        $         (10%)   $         $        $ 3,899   3%
EBITDA         126,960   140,353  (13,393)          138,071   134,172
Net (loss)     $         $        $         (141%)  $         $        $         (835%)
income         (15,854)  39,120   (54,974)          (56,214)  (6,014)  (50,200)
Termination of
advisory       50,072    —        50,072    ND      50,072    —        50,072    ND
agreement (b)
Loss on early
extinguishment
of debt and
write-off of   32,429    —        32,429    ND      32,429    —        32,429    ND
discounts and
deferred
financing
costs (a)
Income taxes
of certain     (30,104)  —        (30,104)  ND      (29,020)  —        (29,020)  ND
non-GAAP
adjustments
Adjusted Net   $ 36,543  $        $         (7%)    $         $        $ 3,281   55%
Income (Loss)            39,120   (2,577)           (2,733)   (6,014)
Net (loss)                                                    $
income per     $ (0.18)  $ 0.47   $ (0.65)  (138%)  $ (0.66)  (0.07)   $ (0.59)  (843%)
share, diluted
Termination of
advisory       0.56      —        0.56      ND      0.59      —        0.59      ND
agreement (b)
Loss on early
extinguishment
of debt and
write-off of   0.37      —        0.37      ND      0.38      —        0.38      ND
discounts and
deferred
financing
costs (a)
Income taxes
of certain     (0.34)    —        (0.34)    ND      (0.34)    —        (0.34)    ND
non-GAAP
adjustments
Adjusted Net
Income (Loss)  $ 0.41    $ 0.47   $ (0.06)  (13%)   $ (0.03)  $        $ 0.04    57%
per share,                                                    (0.07)
diluted
Weighted
average shares 88,844    83,240                     85,510    82,436
outstanding,
diluted
Net cash
provided by    $ 73,557  $        $         (51%)   $ 97,731  $        $         (31%)
operating                148,972  (75,415)                    140,856  (43,125)
activities
Capital        55,706    58,540   (2,834)   (5%)    88,025    115,603  (27,578)  (24%)
expenditures
Free Cash Flow $ 17,851  $        $         (80%)   $ 9,706   $        $         (62%)
                         90,432   (72,581)                    25,253   (15,547)
Advisory
termination    46,300    —        46,300    ND      46,300    —        46,300    ND
fee cash
payment
Adjusted Free  $ 64,151  $        $         (29%)   $ 56,006  $        $ 30,753  122%
Cash Flow                90,432   (26,281)                    25,253



SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES
UNAUDITED BALANCE SHEET DATA
(In thousands)
                               June 30,         December 31,
                               2013             2012
Cash and cash equivalents      $    93,936  $      45,675
Total assets                   $  2,632,947    $   2,521,052
Long-term debt, including
current maturities:
Term Loan A                    $         $     152,000
                               —
Term Loan B                    —                1,293,774
Term B-2 Loans                1,405,000        —
Senior Notes                   260,000          400,000
Total long-term debt,          $  1,665,000    $   1,845,774
including current maturities
Total stockholders' equity     $   625,805   $     449,848



SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES
UNAUDITED OTHER DATA
               For the Three                       For the Six
               Months Ended                       Months Ended
               June 30,           Change          June 30,       Change
               2013      2012      $        %      2013    2012    $      %
Attendance (in 6,563     7,249     (686)    (9%)   10,062  10,667  (605)  (6%)
thousands)
Total revenue  $62.67    $58.75    $3.92    7%     $64.59  $59.84  $4.75  8%
per capita (h)
ND-Not
determinable
(a) Reflects a $15.4 million premium paid for the early redemption of $140.0
million of the Company's Senior Notes using net proceeds from the Company's
initial public offering in April 2013, along with a write-off of approximately
$5.5 million in related discounts and deferred financing costs and a write-off
of approximately $11.5 million of certain capitalized debt issuance costs in
connection with Amendment No. 5 to the Company's Senior Secured Credit
Facilities.



(b) Reflects a one-time fee of $46.3 million paid by the Company to an
affiliate of Blackstone in connection with the termination of the 2009
Advisory Agreement, and a related write-off of prepaid advisory fees of $3.8
million.



(c) Reflects fees paid to an affiliate of Blackstone under the 2009 Advisory
Agreement. The 2009 Advisory Agreement was terminated on April 24, 2013 in
connection with the Company's initial public offering.



(d) Reflects non-cash compensation expense associated with the grants of
equity compensation.



(e) Reflects costs which were expensed related to the April and May 2013
amendments and the March 2012 amendment to the Senior Secured Credit
Facilities.



(f) Reflects certain acquisition and pre-opening costs related to Aquatica San
Diego.



(g) Reflects non-cash expenses related to miscellaneous asset write-offs and
non-cash gains/losses on foreign currencies.



(h) Calculated as total revenues divided by attendance.





SOURCE SeaWorld Entertainment, Inc.

Website: http://www.seaworldentertainment.com
Contact: Investor Relations Inquiries: SeaWorld Entertainment, Inc.,
855.797.8625, investors@seaworld.com, or Media Inquiries: Fred Jacobs, Vice
President of Communications, Fred.Jacobs@SeaWorld.com
 
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