United Parks & Resorts Inc.

Good day and welcome to the United Parks and Resorts first quarter 2025 earnings conference call. All participants will be in the listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Matthew Stroud from Investor Relations. Please go ahead.

Thank you and good morning, everyone. Welcome to United Parks and Resorts first quarter earnings conference call. Today's call is being webcast and recorded. A press release was issued this morning and is available on our investor relations website at www.unitedparksinvestors.com. Replay information for this call can be found in the press release and will be available on our website following the call. Joining me this morning are Mark Swanson, Chief Executive Officer, and Jim Michalajczyk, Chief Financial Officer and Treasurer. This morning, we will review our first quarter financial results, and then we will open the call to your questions. Before we begin, I would like to remind everyone that our comments today will contain forward-looking statements within the meaning of the federal securities laws. These statements are subject to a number of risks and uncertainties that could cause actual results to be materially different from those forward-looking statements, including those identified in the risk factors section of our annual report on Form 10-K and quarterly reports on Form 10-Q filed with the Securities and Exchange Commission. These risk factors may be updated from time to time and will be included in our filings with the SEC that are available on our website. We undertake no obligation to update any forward-looking statements. In addition, on the call we may reference non-GAAP financial measures and other financial metrics such as adjusted EBITDA and free cash flow. More information regarding our forward-looking statements and reconciliations of non-GAAP measures to the most comparable GAAP measure is included in our earnings release available on our website and can also be found in our filings with the SEC. Now, I would like to turn the call over to our Chief Executive Officer, Mark Swanson. Mark?

Thank you, Matthew. Good morning, everyone, and thank you for joining us. We are pleased to report another quarter of strong financial results. Results in the first quarter were negatively impacted by the timing of Easter and Spring Break holidays moving into the second quarter this year compared to being in the first quarter last year. The shift of Easter and spring break from the first quarter to the second quarter also impacted admissions per capita and in-park per capita as peak operating days that usually come with higher relative pricing and guest spending also shifted from the first quarter to the second quarter this year as compared to prior year. Despite the negative calendar shift, in-park per capita spending increased 1.1% during the first quarter a record level and has now grown for 19 of the last 20 quarters. First quarter results were also impacted by certain timing-related impacts that resulted in over $5 million more of certain expenses being reported in the first quarter of 2025 compared to the first quarter of 2024. We are also pleased to report that April 2025 attendance was up 8.1 percent compared to April of 2024. As we look ahead to the remainder of the year, we are excited about the significant investments we have made across our parks and business, including the incredible lineup of new, one-of-a-kind rides and attractions, popular events, improved in-park venues, and other offerings across our parks. We are also encouraged by the 2025 bookings for our Discovery Cove property, our 2025 group bookings, and our 2025 international ticket sales, all of which are running ahead of 2024. With approximately 75% of our historical attendance and revenue opportunity still ahead of us as of April 30th, 2025, we continue to expect new records in revenue and adjusted EBITDA in 2025. We strongly believe we have a clear opportunity to drive substantially more attendance and total per capita spending and have high confidence in our ability to continue to deliver operational and financial improvements that we expect will lead to meaningful increases in shareholder value. Finally, I want to thank our ambassadors for their ongoing efforts as we prepare for what we anticipate will be another busy summer season. For 2025, we have an exciting lineup of new rides attractions, events, and new and improved in-park venues and offerings with something new and exciting across our parks. Our new rides and attractions include the following. SeaWorld San Diego debuted Jewels of the Sea in March, an immersive new aquarium experience featuring multiple galleries, including one of the largest jelly cylinders in the country and an engaging multimedia component. The park also announced the reinvention of Journey to Atlantis, San Diego's first coaster, which will honor the beloved original while introducing new storytelling and thrill elements. SeaWorld San Antonio launched Rescue Junior in March, an all-new, kid-friendly realm celebrating animal rescue. The area features themed rides, interactive play zones, and a water play area designed for young adventurers. Sesame Place Philadelphia kicked off its 45th birthday celebration in April, offering guests birthday-themed fun all spring and summer. Fan favorite entertainment has been refreshed with celebratory twists, including the return of the popular Sesame Street birthday parade. SeaWorld Orlando opened Expedition Odyssey on May 9th, a groundbreaking family-friendly attraction that blends somatic storytelling with ride technology to transport guests on an unforgettable journey from the top of the world to the ocean's depths. The remaining new attractions include the following. Busch Gardens Williamsburg will open the Big Bad Wolf, the Wolf's Revenge, the longest family inverted coaster in North America, will take riders through over 2,500 feet of track at speeds up to 40 miles per hour. Water Country USA will open High Tide Harbor, an all-new multi-level water play structure designed for families to explore together. This exciting area features over 100 interactive water elements, including cannons, sprayers, and tipping fountains, ensuring endless fun for kids of all ages. With vibrant and dynamic water activities, High Tide Harbor promises to be the ultimate family-friendly destination for staying cool. Busch Gardens Tampa Bay will open Wild Oasis, an all-new realm featuring the sights and sounds of the rainforest, a newly reimagined drop tower featuring digital and sound effects, an interactive water play, Wonderland, a multi-level climbing canopy, and an all-new multi-species animal habitat for up-close encounters. Now, let me give a brief update on just some of our strategic initiatives. First, on hotels, Our work and discussions continue. We have nothing new to report today, but continue to work through various options and with various potential partners. We are excited about the prospect of integrating branded hotels into our parks and the expected positive benefits. Second, on real estate, as we have discussed, we own over 2,000 acres in valuable real estate and desirable locations, including approximately 400 acres undeveloped land adjacent to our parks including significant developable land in Orlando we continue to have discussions with various potential partners as we explore ways to unlock the value of this very valuable real estate we do not believe that the public markets have or are appropriately giving credit to these attractive and valuable 100% owned real estate assets third I On sponsorships, we have been actively working over the past several months on various sponsorship opportunities that leverage our valuable assets and customer database. As a reminder, we have over 21 million annual visitors across our park portfolio, and the average length of stay is over six hours. In recent years, we have not pursued nor had meaningful sponsorship partnerships. Clearly, we have been missing this opportunity. Starting late last year, we formalized a partnership with a third-party group and dedicated internal resources to pursuing this opportunity. Since then, we have had meaningful discussions with several potential sponsors and expect to have exciting announcements in the coming months. The reception from potential sponsors has been good, given our annual visitation, the demographic we attract, and related opportunities to target these guests through our CRM database and other methods. We expect these opportunities will exceed $20 million over time in high margin revenue of which we expect to realize mid to high single digits in 2025. Fourth, on international, we continue discussions with multiple partners on this front in various geographies and look forward to sharing more with you in the near future. Fifth, on IP partnerships, we continue our active discussions with various partners to bring their globally recognized IP to our parks via new rides, attractions, and or other exciting activations. Finally, on our other initiatives, including park enhancements, technology investments, CRM and mobile app, among other things, all are moving forward and we expect will help drive growth and financial improvements over the coming quarters and years. Very excited about the significant investments we are making. and in many initiatives we have underway across our business that we expect will improve the guest experience, allow us to generate more revenue, and make us a more efficient and more profitable enterprise. We are building an even stronger and more resilient business that we are confident and expect will deliver improved operational and financial results and meaningful increases in shareholder value. Let me briefly comment on our balance sheet, which continues to be strong. On March 31st, 2025, net total leverage ratio is 3.1 times, and we had approximately $764 million of total available liquidity, including approximately $76 million of cash on the balance sheet in advance of us starting our summer season where we generate a majority of our cash flow. The strong balance sheet gives us flexibility to continue to invest in and grow our business and to opportunistically allocate capital with the goal to maximize long-term value for shareholders. During the first quarter, we repurchased 100,000 shares for an aggregate total of approximately $4.6 million. We know buybacks are on the mind of many of our investors, and while we don't have anything specific to announce today, I can tell you that our board strongly believes our shares are materially undervalued and that purchasing our shares at or near current levels is an extraordinary opportunity. I can also tell you that the board is working through various governance and other considerations and should have something to announce in the coming weeks. I would add from the management team, we have significant confidence in our business and our prospects, and along with the board, believe strongly that our shares are materially undervalued. Finally, while we recognize There has been economic uncertainty in recent weeks and while this may or may not continue going forward, I want to remind you all that we have a proven and time-tested resilient business model and offer a great value proposition to our guests. As a reminder, approximately 90% of our guests come from the United States and the majority are within driving distance to our parks. Based on the seasonal nature of our business, we have approximately 75% of our attendance and revenue opportunity still ahead of us as of April 30th, 2025, which along with the coming opening of more of a ride, attraction, and event lineup, and all the initiatives that we have underway, give us continued confidence in our ability to achieve new records in revenue and adjusted EBITDA for 2025. With that, Jim will now discuss our financial results in more detail. Jim?