Parks! America Inc

Good day and welcome to the Parks America Report's second quarter fiscal year 2024 financial results 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 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 Joe Diaz. Please go ahead.

Good afternoon, and thank you for joining us today to review Parks America's financial results for the second quarter of fiscal 2024, ended March 31, 2024. With us today on the call are Lisa Brady, Chief Executive Officer, and Todd White, Chief Financial Officer. Before we begin with prepared remarks, I would like to remind everyone certain statements made by the management team of Parks America during this conference call constitute forward-looking statements within the meaning of the Private Security Litigation Reform Act of 1995. Except for the statements of historical fact, This conference call may contain forward-looking statements that involve risks and uncertainties, some of which are detailed under risk factors in documents filed by the company with the Securities and Exchange Commission, including the annual report on Form 10-K for the year ended October 1, 2023. Forward-looking statements speak only as of the date the statements were made. company can give no assurance that such forward-looking statements will prove to be correct. Parks America does not undertake and specifically disclaims any obligation to update any forward-looking statements except as required by law. I would also like to inform you that we have filed a definitive proxy statement with the SEC in connection with our upcoming 2024 annual meeting of stockholders. Scheduled to be held on June 6, 2024. The company, its directors, nominees, and certain of our executive officers are participants in the solicitation of proxies from our stockholders in connection with the annual meeting. Stockholders are strongly encouraged to read the proxy statement and related materials filed with the SEC carefully and in their entirety as they contain important information about the annual meeting, including the identity of the participants in the solicitation and their direct or indirect interests by securities holdings or otherwise. At the conclusion of today's prepared remarks, we will open the call for your questions. Now I'd like to turn the call over to Lisa Brady, Chief Executive Officer of Parks America. Lisa?

Thanks, Joe, and good afternoon, everyone. We appreciate you taking the time today to be on this call. The second quarter of 2024 generated revenue of $1.9 million, an increase of 4.4% over last year's second quarter. The second quarter is historically our slowest quarter of the fiscal year for park attendance as we're in the middle of the winter season. While the proxy contest initiated by Focus Compounding in December has been a significant distraction, we continue to execute on our strategic plan to better position Parks America for improved performance in the quarters and years to come. So with that, we are pleased to report an increase in revenue over last year's comparable quarter. We had a particularly strong performance from our Missouri park as it posted a 48% increase during the quarter, primarily driven by our proactive online marketing campaign, which is delivering a strong return on dollars invested. We are taking a very targeted approach to allocating marketing dollars, focusing on highly qualified audiences that would naturally have an affinity to an adventure like our wildlife safari parks. Our Texas park continues to be up year to date despite extremely challenging weather in the second quarter, and we continue to see strong traction with group business at that park. Results for the Georgia park for the quarter were down slightly and continued to lag behind 2022. We believe that this is a continued impact from a portion of the walkabout being closed, as well as continued settling from the bump that the business received during COVID-19 in the years of 2020 and 2021. The competitive environment in Georgia has also increased with an additional safari opening in March of 2023. Despite these challenges, the park continues to generate substantial revenue and cash flow and our team is diligently working to improve efficiency and to continue to drive visitor traffic. The first six weeks of the quarter through May 14th have also been very encouraging. Revenue is up more than 75% with 120% plus increase in Georgia. Remember, we were closed for approximately three weeks in the third quarter of 2023 for the tornado. A 25% increase in Missouri and an 18% increase in Texas. On a pro forma basis, which backs out and adjusts for the impact of our ticketing platform transition, as well as the impact of the tornado in Georgia last year, revenue is up 1.4%. Georgia park revenue continues to lag 2022, but at a decelerated pace. We are pleased with the continued momentum in Missouri and Texas and encouraged by this acceleration in momentum at our Georgia park as we head into our seasonally strong back half of the year. We are seeing strong traction with our marketing campaigns and are heavily focused on digital advertising, including a mix of organic social, out-of-home, and paid social, as well as paid search. We are using highly targeted methodology, including lookalike audiences and geofence target areas, such as entertainment properties near our locations, in order to convert visitors. We're seeing strong returns across the board on these efforts, with returns north of 3 to 1 per dollar spent on advertising spend. Operationally, we continue to be focused on enhancing our corporate culture, including ongoing training on best practices and guest service standards. During the quarter, we also transitioned to a new ticketing platform and point of sale that is much more suited to the size and scale of our business. This change has been highly beneficial and has provided additional flexibility for our teams in order to test promotions, create bundles, and launch dynamic pricing. To that end, we've introduced a more dynamic pricing model for all three parks. Historically, prices were the same on a Saturday in July as they were on a Wednesday in January. We now have the ability to adjust prices by day of week and by season, which we will believe will allow us to tap into consumer pricing power during peak periods and drive additional demand, particularly during our low seasons. We are seeing early traction with this initiative, which we will continue to refine in the coming months, and we expect continued benefit in the next several quarters, both in terms of volume and pricing. In our first quarter earnings call, we discussed early strength in season pass sales, and I'm pleased to report that this strength has continued into the second quarter. Long term, we continue to believe there's a huge amount of potential in the season pass category for all three of our parks in order to bring Parks America more in line with current industry averages. Group sales are another area of opportunity, and all three parks do extremely well with school groups and birthday parties. However, we continue to fine tune our efforts and believe that group business has the potential to grow as a percentage of our total sales as well. Now on to capital allocation. As we've discussed elsewhere, our 2024 capital plan is heavily focused on further strategic rebuild of our Georgia Park following the tornado devastation in March of 2023. Roughly $750,000 of our 2024 capital spending is to replace Georgia's 30-plus year old restroom facility that was damaged beyond repair by the March tornado. As we work to recover and reopen, we intentionally deferred this project until 2024. This project also includes setting up a new guest entry plaza to improve the arrival experience and provide a space for all guests to dwell, which we believe will positively impact our Georgia Park for decades to come. Also in Georgia, our Carnivore Nighthouse is being built, a capybara encounter area added, roadway infrastructure improved, and additional fencing and sidewalks repaired. We continue to take a strategic and measured approach to the rebuild at our Georgia Park, ensuring we put in place a product that will withstand the test of time and improve the guest, animal, and staff experience, ultimately delivering higher revenue and profitability. While we are making great progress, we continue to remain very disciplined as it relates to our capital spending. Approximately a quarter of the walkabout section at the Georgia Park remains closed. As we prepare and plan to rebuild in a rational, strategic manner, balancing both the needs of the park with the needs of our investors. With our minimal capital spending budget at our Missouri park, we were able to complete a nature walkway and the activation of a guest-facing pond, which has had great reviews and opened earlier in May. In Texas, capital was focused on completing critical electrical infrastructure in order to have proper coverage in our main building and our keeper facility. At both parks, we are also adding shade structures and completing necessary safety and infrastructure-related projects at both parks. We remain committed to our long-term vision for our parks, and we believe that our 2024 capital plan balances additional needs from the Georgia park and deferred maintenance, along with the addition of guest-facing improvements and amenities. Our 2024 fiscal capital plan anticipates spending approximately $1.4 million which will again be fully funded from our existing cash and continues to demonstrate our commitment to building for long-term sustainable growth. We are so proud of the teams at our parks as we've been still able to demonstrate substantial progress against many of our core initiatives, and we're seeing positive results from these efforts despite obvious external headwinds during the quarter. With that, I will turn our call over to Todd White, our CFO, for a deeper review of the second quarter 2024 results. Todd? Thank you, Lisa.