United Parks & Resorts Inc. Q4 FY2024 earnings call

• Welcomed Jim Nicolaiczuk as the new CFO, thanked Jim Forrester for past service. - 2024 had strong financial results despite bad weather, with near-record attendance, in-park per capita, and total revenue per capita in both fourth quarter and full year. - 2025 has an outstanding lineup of new rides and attractions across parks, e.g., SeaWorld Orlando's family-friendly immersive flying experience, Busch Gardens Williamsburg's The Big Bad Wolf, The Wolf's Revenge, etc. - Capital allocation strategy includes investing in the business, debt pay down, M&A, and returning capital to shareholders. Investing in the business focuses on maintenance, new rides, etc., with expected $150 million to $175 million per year on core CapEx and up to $50 million per year on expansion and ROI CapEx. - 2024 repurchased 9.4 million shares, 2024 CapEx was $248.4 million. 2025 expected CapEx is approximately $225 million. - Strategic initiatives include hotels, real estate monetization, sponsorships, international, IP partnerships, and other areas like mobile app, CRM, etc. - Positioned to benefit from increased visitation to the Orlando market due to Universal's Epic Universe Park opening. - Believes there is clear opportunity to grow attendance by returning to historical levels and has a roadmap for future attendance growth through multiple drivers. - Identified approximately $75 million of cost efficiency and reduction initiatives.

In the fourth quarter, total revenue was $384.4 million, a decrease from the fourth quarter of 2023. The decrease in total revenue was primarily due to a decrease in attendance, partially offset by an increase in total revenue per capita. Attendance for the fourth quarter of 2024 decreased by approximately 79,000 guests or 1.6% compared to the prior year quarter. Adjusting for weather impacts, attendance would have increased approximately 2% compared to the prior year quarter. Total revenue per capita increased 0.4%, admission per capita decreased 1.9%, and in-park per capita spending increased 3.5%. For the full fiscal year 2024, total revenue was $1.73 billion, a decrease of $1.3 million or 0.1%. Total attendance was 21.5 million guests, a decrease of approximately 59,000 guests or 0.3%. Net income for the year was $227.5 million, a decrease of $6.7 million, and adjusted EBITDA was $700.2 million, a decrease of $13.3 million or 1.9%.

• Assuming no worse weather than 2024, expects meaningful growth and new records in revenue and adjusted EBITDA in 2025. - 2025 international sales growth up mid-single digits and group bookings growth up double digits. - Board strongly believes shares continue to be materially undervalued and there is significant upside opportunity in current share price. - 2025 expects to spend approximately $225 million of CapEx split between $175 million of core CapEx and $50 million of expansion and ROI CapEx. - Net total leverage ratio is 2.94x as of December 31, 2024, and has approximately $798.4 million of total available liquidity.

• Unusually poor weather in past years has impacted attendance and revenue. - Market valuation risks, including the company trading at a lower multiple than peer groups despite outperformance. - Uncertainties related to executing strategic initiatives as planned.

Q: Steve Wieczynski asked about how 2025 is expected to be a record year for EBITDA assuming normal weather and the impact of Epic Universe Park.

A: Marc Swanson said Epic Universe is a good opportunity, they expect to pick off people coming to the park, and they have plans like a new ride in Orlando to participate in market growth.

Q: Sean Rooney asked about 2025 first quarter trends and visitation deferral ahead of Epic opening.

A: Marc Swanson said January was abnormally cold in Florida, attendance is up day-to-day through recent Sunday, and they get a good amount of attendance from Florida locals.

Q: Thomas Yeh asked about Orlando market expansion expectation, revenue growth strategy, marketing support, and labor wage dynamics.

A: Marc Swanson said focus is on driving total revenue, they get a lot of visitation from Florida locals, and they manage costs and look to optimize marketing and labor.

Q: Lizzie Dove asked about barriers to reaching historical attendance and capital allocation and real estate monetization.

A: Marc Swanson said international visitation is still down from 2019 but improving, and they are open to considering real estate monetization options. Jim Nicolaiczuk added they refinanced and have free cash flow.

Q: Ben Chaiken asked about pricing growth and 2025 cost savings.

A: Marc Swanson said they focus on growing pricing, test and optimize, and Jim Nicolaiczuk said cost savings are across various areas including labor.

Q: Michael Swartz asked about incremental cost savings and first quarter trends.

A: Jim Nicolaiczuk said cost savings are across different areas including labor, and Marc Swanson said attendance is up day-to-day through recent Sunday and discussed Easter shift impact.