SeaWorld Entertainment, Inc.

Good day and welcome to the SeaWorld First Quarter 2021 Earnings Conference Call. All participants will be in 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. Please note this event is being recorded. I would like to now turn the conference over to Matthew Straub, Vice President of Investor Relations. Please go ahead.

Thank you, and good morning, everyone. Welcome to SeaWorld's 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.seaworldinvestors.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 Elizabeth Galaxi, 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 factor 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, free cash flow, adjusted free cash flow, net cash burned, and adjusted net cash flow, which are non-GAAP financial measures and metrics. 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?

Mark Swanson Thank you, Matthew. Good morning, everyone, and thank you for joining us. This morning, prior to our earnings release, We announced that I have been appointed as CEO of the company, and Elizabeth will serve as CFO effective immediately. We are thrilled to be taking on these new roles on a permanent basis. Over the past several years, together with our board, management team, and our dedicated ambassadors, we have worked tirelessly to execute on the strategic initiatives we have been working on and implementing. We are proud of these accomplishments and are excited about what the future holds for this dynamic company. With that, let me turn to our earnings release. I'm pleased to report that we saw continued improvement in our top line in both attendance trends and total revenue per capita, and in our bottom line in adjusted EBITDA in the first quarter. And I'm extremely proud that we not only generated positive adjusted net cash flow during the quarter, but we achieved higher adjusted EBITDA in the first quarter compared to the first quarter of 2019. The success of the strategic pricing, marketing, cost, and capital investment initiatives that we developed and had been refining prior to the onset of the COVID-19 pandemic combined with the strategies we developed and actions we have taken during the COVID-19 pandemic period helped us deliver these results. We are excited to have experienced a robust spring break season across our parks, including several days where our parks reached capacity limitations for the current operating environment. Had it not been for capacity limitations and our forced closures, we believe our attendance would have been notably higher in the quarter. We are encouraged by our guests' desire to visit and spend at our parks, and believe this is a good indicator for expected demand for our peak summer season. We began the first quarter with seven of our 12 parks open, all with capacity limitations and modified and or limited operations, which compares to eight of the 12 parks open in the prior year. The one park that was closed at the beginning of this year that was open in the prior year was our SeaWorld Park in California. We finished the quarter with 10 of our 12 parks open, which is consistent with the same period in 2019. As a reminder, we temporarily closed all of our parks on March 16th, 2020 in response to the COVID-19 pandemic. We expect all of our parks will be open for the peak 2021 summer season subject to local, state, and federal guidelines related to COVID-19. While attendance in the first quarter was significantly impacted by the COVID-19 factors, recent monthly attendance improved compared to the same period in 2019. Relative to 2019, monthly attendance excluding the company's parks in Virginia, California, and Pennsylvania which each were subject to significant capacity and or operating restrictions during the quarter, was down 37% in January, down 39% in February, and down 18% in March. The improving trend continued into the second quarter with monthly attendance down 15% in April on the same basis. Let me provide you with a quick update on capacity limitations for Virginia and California. On April 1st, we were able to increase capacity for our Busch Gardens Williamsburg Park to approximately 13,000 guests based on revised guidance from the state of Virginia. And on April 12th, SeaWorld San Diego resumed theme park operations with limited capacity in accordance with the State of California guidelines for theme parks. As mentioned last quarter, we have also implemented new operating calendars across several of our parks in 2021 based on learnings over the past 12 months. In particular, we began year-round operations at SeaWorld San Antonio, Busch Gardens Williamsburg, and at Sesame Place. These parks were open primarily on weekends and holidays, weather permitting, in advance of their traditional operating seasons. We are pleased with this strategic decision and our ability to profitably add operating days and operate more of our parks year-round. With this change, we now have year-round operations at eight of our 12 parks. Only our water parks in San Diego San Antonio, Tampa, and Williamsburg are not open year-round. Turning to our financial performance, we saw continued strong total revenue per capita growth in the first quarter relative to the prior year in both admissions and in-park spending. Our pricing and product strategies are clearly working, and our guests are spending more when they visit our parks. We've seen good success with our dynamic pricing initiatives and our first quarter events, including new or expanded food, beverage, and music event days at some of our parks, as well as several new or reimagined venues we launched during the quarter, helping contribute to the increased guest spending. On the merchandise side, we have refreshed our retail offerings by adding new products and improving the product mix, which is added to the increased guest spending. While this continues to be an unprecedented and challenging time for our company and industry, it's been encouraging to see our performance improve and assuring to see our guests visiting our parks over the last few months. With the sharp increase in visitation, we have been adding staff as quickly as possible. But, like other companies of experience, There have been challenges in hiring seasonal personnel, especially during the spring break period in late March and April. With the widespread distribution of COVID-19 vaccines and increasing immunization rates of the public, we believe guests are more willing to get outside, travel, and visit our parks again. We are starting the peak summer season in a few short weeks, where we are planning to have even more events and open all our parks. including our water parks in Williamsburg and San Diego, which were both closed all of 2020. We are optimistic about the upcoming summer season, and we expect that our parks will return to a more normalized operating environment as the year progresses. Our teams have worked hard to better position this company for revenue growth and increased profitability. As we have demonstrated in the first quarter, we believe the strategies we have been working on and refining over the past few years, along with the actions we have taken throughout the past year, will continue to lead to significantly improved financial results for the company. With that, I'd like to turn the call over to Elizabeth to discuss our financial results in more detail. Elizabeth?