SeaWorld Entertainment, Inc. Reports First Quarter 2014 Results

       SeaWorld Entertainment, Inc. Reports First Quarter 2014 Results

PR Newswire

ORLANDO, Fla., May 14, 2014

ORLANDO, Fla., May 14, 2014 /PRNewswire/ --SeaWorld Entertainment, Inc.
(NYSE: SEAS), a leading theme park and entertainment company, today reported
financial results for the quarter ended March 31, 2014.

Release Highlights

  oAchieved record total revenue per capita of $69.72 in the first quarter of
    2014, an increase of 2.2% over the same period in 2013.
  oRepurchased 1.75 million shares of common stock directly from selling
    stockholders affiliated with The Blackstone Group L.P. during a secondary
    offering on April 9, 2014. This most recent repurchase increases the total
    shares repurchased from such selling stockholders to 3.25 million since
    December 2013.
  oDeclared a cash dividend of $0.20 per share on March 4, 2014, payable on
    April 1, 2014.
  oDeclared a cash dividend of $0.21 per share, an increase of 5%, on May 13,
    2014, payable on July 1, 2014.
  oReaffirmed fiscal 2014 revenue guidance in the range of $1,490 million to
    $1,520 million and Adjusted EBITDA^[1] in the range of $450 million to
    $465 million.

"The first quarter, which historically represents only 12%-15% of our full
year attendance, came in as expected with the shift of Easter and the Spring
Break holiday period into the second quarter. Based on the successful launch
of our 50th Anniversary celebration, a strong mix of new attractions yet to
open, the ongoing benefits of our pricing and yield management strategies, and
a strong start to the second quarter, we remain on track to deliver our fourth
consecutive year of record financial results," Jim Atchison, President and
Chief Executive Officer of SeaWorld Entertainment, Inc. said today. "As a
result, we are reaffirming our fiscal 2014 revenue guidance to be in the range
of $1,490 million to $1,520 million and our Adjusted EBITDA guidance to be in
the range of $450 million to $465 million."

"Our business development efforts are moving forward," Jim Atchison continued.
"The Company recently entered into an exclusive six-month Memorandum of
Understanding to assess the viability of a multi-park development in the
Middle East with a partner who has an established track record of opening and
operating world-class attractions, and to finalize the terms of the agreement.
We have worked diligently with our partner to identify the best theme park
concepts and potential locations in the region and are moving forward into the
next stage of the project."

"In our media business, I am excited that our Sea Rescue™ television series,
which has been seen by over 141 million viewers since its debut in 2012, was
nominated for a Daytime Emmy^® Award in the category of Outstanding Children's
Series by the National Academy of Television Arts & Sciences," Jim Atchison
added.

First Quarter 2014 Results
For the first quarter of 2014, the Company generated revenue of $212.3
million, a decrease of $26.3 million, or 11%, versus the first quarter of
2013. Adjusted EBITDA was a loss of $15.8 million, compared to Adjusted EBITDA
of $11.1 million in the first quarter of 2013. The Company reported a net
loss of $49.4 million, or a loss of $0.56 per diluted share, for the three
months ended March 31, 2014. Adjusted Net Loss^[1] was $49.1 million, or a
loss of $0.56 per diluted share. In the first quarter of 2013, the Company
generated a net loss of $40.4 million, or a loss of $0.49 per diluted share.
Free Cash Flow^[1] was a deficit of $33.8 million for the first quarter of
2014 compared to a deficit of $8.1 million in the first quarter of 2013
primarily due to an increase of $14.5 million in capital expenditures related
to future attractions.

The decrease in revenue was primarily driven by a 13.0% decrease in
attendance, partially offset by a total revenue per capita increase of 2.2%
from $68.19 in the first quarter of 2013 to an all-time record of $69.72 in
the first quarter of 2014. Attendance in the first quarter was impacted by a
shift in the timing of Easter into the second quarter of 2014, which caused a
shift in the Spring Break holiday period for schools in many of the Company's
key source markets. Attendance was also impacted by adverse weather,
particularly above average precipitation in the Florida market as well as
below average temperatures in the Texas market for the first quarter of 2014.

Admission per capita, defined as admissions revenue divided by total
attendance, increased by 3.6% from $43.56 in the first quarter of 2013 to
$45.12 in the first quarter of 2014 primarily as a result of higher ticket
pricing and the mix of ticket products sold. In-park per capita spending,
calculated as food, merchandise and other revenue divided by total attendance,
remained relatively flat at $24.60 in the first quarter of 2014 compared to
$24.63 in the prior year quarter.

Other
On March 4, 2014, the Company's Board of Directors declared a cash dividend of
$0.20 per share, which was paid on April 1, 2014, to all common stockholders
of record at the close of business on March 20, 2014.

On April 9, 2014, selling stockholders affiliated with The Blackstone Group
L.P. completed an underwritten secondary offering of 17,250,000 shares of the
Company's common stock, including 2,250,000 shares that were offered and sold
by the selling stockholders pursuant to the full exercise of the underwriters'
option to purchase additional shares. The selling stockholders received all of
the net proceeds from the secondary offering and no shares were sold by the
Company. The Company incurred approximately $0.7 million in expenses related
to this secondary offering in the first quarter of 2014. Concurrently with
the closing of the secondary offering, the Company repurchased 1,750,000
shares of its common stock directly from the selling stockholders in a
private, non-underwritten transaction. These repurchased shares will be held
by the Company as treasury stock at a cost of approximately $50.7 million.

On May 13, 2014, the Company's Board of Directors approved a 5% increase to
the quarterly cash dividend and declared a cash dividend of $0.21 per share,
payable on July 1, 2014, to all common stockholders of record at the close of
business on June 20, 2014.

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" caption
below and the Company undertakes no obligation to update its guidance. For the
full year of 2014, the Company reaffirms its previously provided guidance and
expects revenue to be in the range of $1,490 million to $1,520 million and
Adjusted EBITDA to be in the range of $450 million to $465 million.

Conference Call
The Company will hold a conference call today, Wednesday, May 14 at 5 p.m.
Eastern Time to discuss its first quarter 2014 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
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 after 8 p.m. Eastern Time
May 14, 2014 via the "Investor Relations" section of
seaworldentertainment.com. A replay of the call can also be accessed
telephonically from 8 p.m. Eastern Time on May 14, 2014 through 11:59 p.m.
Eastern Time on May 21, 2014 by dialing 1-877-870-5176 from anywhere in the
U.S. or 1-858-384-5517 from international locations, conference code 2368775.

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 Loss, Adjusted Net Loss per Diluted Share and Free Cash Flow.
Adjusted EBITDA, Adjusted Net Loss, Adjusted Net Loss per Diluted Share and
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 Loss, Adjusted Net Loss per Diluted Share, 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 Loss, Adjusted Net
Loss per Diluted Share, 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 income (loss) before income tax expense,
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 Loss is defined as net income (loss) before the after-tax impact
of the secondary offering costs. Adjusted Net Loss per Diluted Share is
calculated by dividing Adjusted Net Loss for the period by the diluted shares
outstanding. Management presents Adjusted Net Loss and Adjusted Net 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. Management presents 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 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 86,000 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 Annual Report on Form 10-K for the fiscal year
ended December 31, 2013, 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 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 Loss, Adjusted Net Loss per Diluted Share, and 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 Loss, Adjusted Net Loss per Diluted Share, 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 Months Ended
                            March 31,                      Change
                            2014           2013             $           %
Net revenues:
Admissions                  $          $         $(15,040)   (10%)
                            137,386       152,426
Food, merchandise and other 74,904         86,184           (11,280)    (13%)
Total revenues              212,290        238,610          (26,320)    (11%)
Costs and expenses:
Cost of food, merchandise   16,760         19,828           (3,068)     (15%)
and other revenues
Operating expenses          167,912        173,260          (5,348)     (3%)
Selling, general and        45,076         39,987           5,089       13%
administrative
Secondary offering costs    674            —                674         ND
Depreciation and            41,276         41,408           (132)       (0%)
amortization
Total costs and expenses    271,698        274,483          (2,785)     (1%)
Operating loss              (59,408)       (35,873)         (23,535)    (66%)
Other loss (income), net    17             (73)             90          123%
Interest expense            20,046         28,606           (8,560)     (30%)
Loss before income taxes    (79,471)       (64,406)         (15,065)    (23%)
Benefit from income taxes   (30,040)       (24,046)         (5,994)     (25%)
Net loss                    $          $         $ (9,071)  (22%)
                            (49,431)      (40,360)
Loss per share:
Net loss per share, basic   $        $       
                            (0.56)          (0.49)
Net loss per share, diluted $        $       
                            (0.56)          (0.49)
Weighted average commons
shares

outstanding:
Basic                       88,415         82,768
Diluted                     88,415         82,768



SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(In thousands)
                          For the Three Months Ended
                          March 31,                       Change
                          2014           2013             $            %
Net loss                  $          $         $ (9,071)   (22%)
                          (49,431)      (40,360)
Benefit from income taxes (30,040)       (24,046)         (5,994)      (25%)
Interest expense          20,046         28,606           (8,560)      (30%)
Depreciation and          41,276         41,408           (132)        (0%)
amortization
Secondary offering costs  674            —                674          ND
(a)
Advisory fees (b)         —              925              (925)        (100%)
Equity-based compensation 762            320              442          138%
expense (c)
Other adjusting items (d) —              111              (111)        (100%)
Other non-cash expenses   908            4,147            (3,239)      (78%)
(e)
Adjusted EBITDA           $          $         $(26,916)    (242%)
                          (15,805)       11,111
Net loss                  $          $         $ (9,071)   (22%)
                          (49,431)      (40,360)
Secondary offering costs  674            —                674          ND
(a)
Income taxes of certain   (362)          —                (362)        ND
non-GAAP adjustments
Adjusted Net Loss         $          $         $ (8,759)   (22%)
                          (49,119)      (40,360)
Net loss per share,       $        $         $  (0.07)  (14%)
diluted                   (0.56)          (0.49)
Secondary offering costs  0.01           —                0.01         ND
(a)
Income taxes of certain   (0.01)         —                (0.01)       ND
non-GAAP adjustments
Adjusted Net Loss per     $        $         $  (0.07)  (14%)
share, diluted            (0.56)          (0.49)
Weighted average shares   88,415         82,768
outstanding, diluted
Net cash provided by      $         $         $(11,163)    (46%)
operating activities      13,011          24,174
Capital expenditures      46,827         32,319           14,508       45%
Free Cash Flow            $          $         $(25,671)    (315%)
                          (33,816)       (8,145)



SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES
UNAUDITED BALANCE SHEET DATA
(In thousands)
                                   March 31, 2014       December 31, 2013
Cash and cash equivalents          $      61,240  $       
                                                        116,841
Total assets                       $    2,544,501    $      2,582,273
Long-term debt, including current
maturities:
Term B-2 Loans                     $    1,394,462    $      1,397,975
Revolving credit agreement         —                    —
Senior Notes                       260,000              260,000
Total long-term debt, including    $    1,654,462    $      1,657,975
current maturities
Total stockholders' equity         $     587,411   $       
                                                        654,132



SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES
UNAUDITED OTHER DATA
                       For the Three Months Ended
                       March 31,                            Change
                       2014                 2013            $         %
Attendance (in         3,045                3,499           (454)     (13.0%)
thousands)
Total revenue per      $69.72               $68.19          $1.53     2.2%
capita (f)
ND-Not determinable
(a) Reflects fees and expenses incurred by the Company prior to March
31, 2014 in connection with the secondary offering of common stock in
April 2014. The selling stockholders received all of the net proceeds
from the offering and the Company paid all expenses related to the
offering, other than underwriting discounts and commissions. No
shares were sold by the Company in the secondary offering.
(b) Reflects historical 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.
(c) Reflects non-cash compensation expense associated with the grants
of equity compensation.
(d) Reflects costs related to the Company's acquisition of the
Knott's Soak City Chula Vista water park and pre-opening costs
related to Aquatica San Diego.
(e) Reflects non-cash expenses related to miscellaneous asset
write-offs which were expensed.
(f) 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; Media Inquiries: Fred Jacobs, Vice
President of Communications, Fred.Jacobs@SeaWorld.com
 
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