But, again, SEAS fundamentals are not painting a pretty picture and as we discuss in more detail below, its Q4 results were less-than-inspiring.
Of course, as many investors are aware, SEAS troubles really began a few years ago as negative publicity swirled around the company regarding its treatment of some of the animals at its parks - most notably, its Orcas. This was really brought to light by the documentary film, "Blackfish." Since then, SEAS has announced that it will end its theatrical Orca shows by 2019 at all of its parks, and will replace those shows with "Orca encounters" that promote the whales overall health.
But, the problem for SEAS is really two-fold. First, the negative publicity over the past few years has left a stain on the company that has greatly damaged its reputation among the public. And there is no quick-fix to that. Secondly, the Orca shows (Shamu, etc) were SEAS biggest attraction. For many customers, seeing the killer whale show was THE reason to go to SeaWorld. Without the headliner, a lot of customers are simply finding other tourist options to spend their dollars on. So, clearly, SEAS is fighting a massive uphill battle, and it is evident in its financial results.
On that topic, SEAS issued its Q4 results earlier this morning, and, it also announced that its CEO is stepping down and that its current Chief Parks Officer will transition to Interim CEO until a permanent CEO is found. This shake-up at the top is the most dramatic of several initiatives the company is taking in its attempt to right the ship. More on that below.
As for the quarterly results, they were mixed at best. Specifically, it reported a loss per share of ($0.24), missing the Capital IQ consensus by $0.05. Also, on a year/year basis, the loss widened from the ($0.14) reported in 4Q16 and Adjusted EBITDA declined by $3.5 million to $55 million.
On the topline, revenue once again fell, this time by about 1% to $265.5 million. That did exceed the $259 million consensus, but, SEAS has now reported year/year revenue declines in six of the past seven quarters. Driving the decline in revenue was a 2.7% dip in total attendance to 4.26 million guests. If there is a silver lining, it is that this was an improvement relative to the year as a whole, which saw a 5.5% dive in attendance. Another modest improvement was that total revenue per capital was up 2% in the quarter, compared to full year revenue per capital being down 0.6%.
SEAS did not provide specific EPS or revenue guidance for 2018, but, it did offer some information and commentary for the year. For instance, the company says it is on track to deliver on its previously-announced $40 million of cost savings by the end of the year, and that it sees another $25 million in potential cost savings.
On the demand side, its plan to offset pressures related to changes in its Orca shows will revolve around adding new rides and offering new events. For 2018, it is planning on adding 15 new rides, attractions, and events across its theme parks. To support this, the company is also bolstering its marketing efforts and is implementing new pricing and ticketing strategies.
To conclude, SEAS is a company in the midst of a major transformation, and uncertainty abounds. As it continues to navigate through all these changes, investors should continue to expect its quarterly results to be a bit erratic for the foreseeable future. The good news is, the worse may be behind the company now, expectations are certainly low at this point, and SEAS has put together a sensible turnaround plan. Now it just needs to effectively execute it.