SEA WORLD PLUNGES TO SECOND - QUARTER LOSS DESPITE RECORD FIRST - HALF REVENUE

SEA WORLD PLUNGES TO SECOND - QUARTER LOSS DESPITE RECORD FIRST - HALF REVENUE

By Jason Garcia, Orlando Sentinel
7:55 p.m. EDT, August 13, 2013

Attendance and earnings plunged at SeaWorld theme parks this spring, but the company said Tuesday it expects improvement during the rest of the year thanks in large part to its new Antarctica expansion in Orlando.

"We're very pleased with the performance of this attraction. Our cluster of parks in Orlando are our highest-performing group on a year-to-date basis," SeaWorld Entertainment Inc. President and Chief Executive Officer Jim Atchison said during a conference call with analysts. Antarctica is "something that's a big game-changer for us, in terms of our brand and the guest experience."

The comments came after a second quarter in which SeaWorld lost $15.9 million, a sharp reversal from the same period last year, when it turned a $39.1 million profit.

Total revenue slipped 3 percent to $411 million.

Quarterly attendance at the company's 11 U.S. parks tumbled 9 percent during the quarter, dropping to 6.6 million from 7.2 million a year ago.
SeaWorld blamed several factors, including unusually heavy rain in Florida.

Neither the Walt Disney Co. nor Comcast Corp., both of whom recently reported earnings for the same quarter, cited weather effects at Walt Disney World or Universal Orlando. But Atchison noted that SeaWorld's business is heavily concentrated in Florida — its five Florida parks produce 55 percent of its annual revenue.

SeaWorld also said poor weather in Virginia, where it has two parks, and an earlier Easter holiday this year contributed to the second quarter's shrunken attendance.

It said some of the attendance decline was deliberate, as the company aggressively raised ticket prices and culled certain discounts. Total revenue per guest jumped 7 percent during the quarter, from $58.75 a person to $62.67.

Costs associated with the company's recent stock offering and subsequent debt repayments also contributed to the quarterly loss.

SeaWorld executives nonetheless said they are optimistic about the remainder of the year. Despite the second-quarter struggles, SeaWorld generated $650 million in revenue during the first half of 2013, a 2 percent increase from a year ago and a company record.

A big reason for their optimism is Antarctica: Empire of the Penguin, the new "land" that opened in late May at SeaWorld Orlando. SeaWorld executives say it is the largest park expansion in company history.

Antarctica did little to help SeaWorld's second-quarter head count. Attendance shrank in April and May as visitors waited for the new area to open but jumped in June, with the two trends essentially offsetting each other.

But Atchison said the attraction is now spurring gains in attendance and sales. The company is banking on the attraction being a big driver of growth during the July-through-September quarter, a period during which SeaWorld usually generates as much as 60 percent of its earnings.

"This new, one-of-a-kind attraction has been well-received and is driving the level of incremental interest and revenue that we expected," Atchison said.

"We do various surveys and collect data about the guest response, which has been very favorable," he added. "We're still running hour-and-a-half-to-two-hour lines with Antarctica, which is a good problem to have."

SeaWorld said it continues to expand beyond its theme parks, announcing plans Tuesday for a second television show. "The Wildlife Docs" will spotlight zoological operations at Busch Gardens Tampa and will premiere this fall, airing during the same Saturday-morning block of programming as the company's first show, "Sea Rescue," which is entering its third season.

During Tuesday's conference call, Atchison made sure to highlight some of the company's recent scientific and conservation efforts. They included the first successful hatchings of penguins artificially inseminated at SeaWorld San Diego and the first successful cesarean section performed on a shark at Discovery Cove in Orlando.

The emphasis on such advances, which Atchison said could eventually help conservation efforts in the wild, comes with SeaWorld's killer-whale program under heavy scrutiny thanks to "Blackfish." That critical documentary, which chronicles the capture and captivity of the killer whale that killed a SeaWorld Orlando trainer in February 2010, passed the $1 million mark in U.S. ticket sales last weekend, according to BoxOfficeMojo.com.

SeaWorld has aggressively attacked the film this summer, but executives made no mention of it Tuesday.

jrgarcia@tribune.com or 407-420-5414
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http://www.orlandosentinel.com/business/os-seaworld-second-quarter-earnings-20130812,0,2576777.story

Photo: SeaWorld trainer Amber Cavett
( SEAWORLD ORLANDO / October 31, 2008 )