Investing can be fun. With the recent successful IPO of SeaWorld Entertainment Inc (NYSE:SEAS), both investors and SeaWorld visitors are enjoying the ride. With the IPO offering price of $27, SeaWorld’s share price has advanced more than 33% in just over a month’s time. Let’s take a look at what SeaWorld has to offer and what’s driving its growth.
SeaWorld Entertainment Inc (NYSE:SEAS) is a theme park and entertainment company that owns and operates 11 theme parks in the United States, including five of the country’s top 20 theme parks as measured by attendance. Its diversified brand portfolio includes SeaWorld, Busch Gardens, and Shamu, among others. The company has a strong competitive position with its well-known diverse brands, differentiated theme parks, and some of the world’s largest zoological collections. SeaWorld creates a high entry barrier with its huge animal collection and zoological expertise. Further, long development lead-times and high initial capital investment for theme park development lift the barrier for other competitors even higher.
Narrower loss for the first quarter
SeaWorld Entertainment Inc (NYSE:SEAS) reported a narrow loss for the first quarter of 2013 on May 22 due to a 12% increase in revenue. The company lost $0.49 per-share for the quarter, an improvement compared to a $0.55 per-share loss for the same quarter in 2012. Admission revenue and revenue from food, merchandise and other sources were up 14% and 9%, respectively. The management had also controlled expenses well, with expenses increasing only 5%.
As for the guidance, the company expects its full-year revenue to land in the range of $1.46 billion to $1.49 billion with adjusted EBIDTA in the range of $430 million to $440 million. Historically, the company incurs a net loss in the first and fourth quarters due to the seasonal nature of its business, while about two-thirds of the full year attendance and revenue are generated in the second and third quarters.
SeaWorld continues to deliver new attractions. “Antarctica: Empire of the Penguin,” which opened in late May, is SeaWorld Entertainment Inc (NYSE:SEAS) Orlando’s largest expansion ever and features new ride technology and a penguin habitat as well as an underwater viewing gallery. The company is also preparing to open its new Aquatica Park in San Diego on June 1, a park that was acquired in 2012 and rebranded.
Strategically, SeaWorld continues to open and operate companion parks near one another to reduce overhead costs while creating cross-selling opportunities. With a development strategy that is planned and executed well and premium offerings plus new and exciting attractions, SeaWorld is expected to increase its admission and in-park revenues to achieve continuous revenue growth.