Q1 2024 United Parks & Resorts Inc Earnings Call
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Operator: Good day, and welcome to the United Parks and Resorts First Quarter 2024 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 1 on a touch-tone phone. To withdraw your question, please press 2. Please note, this event is being recorded. I would now like to turn the conference over to Matthew Stroud, Investor Relations. Please go ahead.
Good day, and welcome to the United Parks and resorts first quarter 'twenty 'twenty four earnings conference call.
Operator: All participants will be in listen only mode.
Operator: Should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.
Operator: After todays presentation, there will be an opportunity to ask questions.
Operator: To ask a question you May press Star then one on a touchtone phone.
Operator: To withdraw your question. Please press two.
Operator: Please note this event is being recorded.
Operator: I would now like to turn the conference over to Matthew Stroud Investor Relations. Please go ahead.
Matthew V. Stroud: Thank you and good morning everyone. Welcome to United Parks & Resorts' first quarter earnings conference call. Today's call is being webcast and recorded. The press release was issued this morning and is available on our investor relations website at www.unitedparksinvestors.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 Marc Swanson, Chief Executive Officer, and Jim Forrester, Interim Chief Financial Officer and Treasurer.
Matthew V. Stroud: Thank you and good morning, everyone welcome to the United Parks and resorts first quarter earnings Conference call today's call is being webcast and recorded.
Matthew V. Stroud: Our press release was issued this morning and is available on our Investor Relations website at Www, United Parks investors Dot com.
Matthew V. Stroud: Replay information for this call can be found in the press release and will be available on our website following the call.
Matthew V. Stroud: Joining me. This morning are Marc Swanson, Chief Executive Officer, and Jim Forrester interim Chief Financial Officer and Treasurer.
Speaker Change: This morning, we will review our first quarter financial results and then we will open the call to your questions.
Matthew V. Stroud: 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 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 factors section of our annual report on Form 10-K and quarterly reports on Form 10-Q filed with the Security 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 statement.
Matthew V. Stroud: Before we begin I would like to remind everyone that our comments today will contain forward looking statements within the meaning of federal securities laws.
Matthew V. Stroud: 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 factors section of our annual report on Form 10-K, and quarterly reports on Form 10-Q filed with the Securities and Exchange Commission.
Matthew V. Stroud: 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.
Matthew V. Stroud: We undertake no obligation to update any forward looking statements.
Matthew V. Stroud: In addition, on the call, we may reference non-GAAP financial measures and other financial metrics, such as adjusted EBITDA and free cash flow. 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, Marc Swanson. Thank you, Matthew.
Matthew V. Stroud: In addition on the call we May reference non-GAAP financial measures and other financial metrics, such as adjusted EBITDA and free cash flow more information.
Matthew V. Stroud: 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.
Matthew V. Stroud: Now I would like to turn the call over to our Chief Executive Officer, Marc Swanson Marc.
Marc G. Swanson: Good morning, everyone, and thank you for joining us. We are pleased to report record financial results this quarter, including record revenue and adjusted EBITDA. While attendance in the quarter benefited from a positive calendar shift, including the shift of the Easter holiday into the last day of the first quarter from the second quarter of the previous year, this benefit was almost entirely offset by unusually wet and cold weather during the quarter, particularly on certain peak attendance days and mainly in our Florida parks.
Marc G. Swanson: Thank you Matthew good morning, everyone and thank you for joining us.
Marc G. Swanson: We are pleased to report record financial results this quarter, including record revenue and adjusted EBITDA.
Marc G. Swanson: While attendance in the quarter benefited from a positive calendar shift, including the shift of the Easter holiday into the last day of the first quarter from the second quarter and prior year.
Marc G. Swanson: This benefit was almost entirely offset by unusually wet and cold weather during the quarter, particularly on certain peak attendance days and mainly in our Florida parks.
Marc G. Swanson: In part, per capita revenue, excluding the impact of certain one-time revenue, increased 4% during the quarter, representing the 16th consecutive quarter of growth. Looking ahead, we are excited about our plans for 2024, with an exceptional lineup of new, one-of-a-kind rides, attractions, and events, improved in-park venues, and offerings across our parks, some of which are already live, and others that are anticipated to debut later this spring and summer. We are excited to have launched SeaWorld Park's 60th anniversary celebration, featuring special events, shows, and attractions that will continue throughout the year.
Marc G. Swanson: In Park per capita revenue excluding the impact of certain onetime revenue.
Marc G. Swanson: Increased 4% during the quarter, representing the 16th consecutive quarter of growth.
Marc G. Swanson: Looking ahead, we are excited about our plans for 2024 with an exceptional lineup of new one of a kind rides attractions and events.
Marc G. Swanson: We improved in park venues and offerings across our parks some of which are already live and others that are anticipated to debut later this spring and summer.
Marc G. Swanson: We are excited to have launched Seaworld parks 60, <unk> anniversary celebration.
Marc G. Swanson: Special events shows and attractions that will continue throughout the year.
Marc G. Swanson: We hope many will come celebrate SeaWorld's 60-year history of conservation, education, and fun for all ages. We're also encouraged by the booking trends at our Discovery Cove property, along with our group bookings, which are running well ahead of 2023. In addition, in the first quarter of 2024, international visitation, while still down compared to 2019, improved meaningfully compared to 2023.
Marc G. Swanson: We hope many will come celebrate with us she rolled 60 year history of conservation education and fun for all ages.
Marc G. Swanson: We're also encouraged by the booking trends at our discovery Cove property, along with our group bookings, which are running well ahead of 2023.
Marc G. Swanson: In addition in the first quarter of 2024 International visitation.
Marc G. Swanson: I'll still down compared to 2019.
Marc G. Swanson: Improved meaningfully compared to 2023.
Marc G. Swanson: We strongly believe we have a clear opportunity to drive meaningfully more attendance and total per capita spending, and we have high confidence in our ability to continue to deliver operational and financial improvements that will lead to meaningful increases in shareholder value. We continue to expect to deliver new records in revenue and adjusted EBITDA for 2024. I want to thank our stockholders and board of directors for their recent overwhelming approval of our $500 million share repurchase program, which we have already begun to implement and through which we are continuing our track record of returning meaningful capital to shareholders.
Marc G. Swanson: We strongly believe we have a clear opportunity to drive meaningfully more attendance and total per capita spending.
Marc G. Swanson: We have high confidence in our ability to continue to deliver operational and financial improvements.
Marc G. Swanson: That will lead to meaningful increases in shareholder value.
Marc G. Swanson: We continue to expect to deliver new records in revenue and adjusted EBITDA for 2024.
Marc G. Swanson: I want to thank our stockholders and board of directors for their recent overwhelming approval of our $500 million share repurchase program, which we have already begun to implement and through which we are continuing our track record of returning meaningful capital to shareholders.
Marc G. Swanson: Finally, I want to thank our ambassadors for their dedication and commitment as we prepare for what we believe will be an exciting and busy summer season. For 2024, we have an exciting lineup of new rides, attractions, events, and new and improved in-park venues and offerings with something new and meaningful in our parks. Let me highlight a few of our new rides and attractions, along with a couple of them, and Mark. SeaWorld San Antonio opened Catapult Falls, the world's first launched flume coaster featuring the world's steepest flume drop and the tallest flume drop in Texas.
Marc G. Swanson: Finally, I want to thank our ambassadors for their dedication and commitment as we prepare for what we believe will be an exciting and busy summer season.
Marc G. Swanson: Also, Aquatica Orlando opened Tassie's Underwater Twist, featuring... Taji's Underwater Twist, Florida's most immersive water slide that takes riders on an exhilarating journey into a world of watery wonders set to an inspiring original musical score. The remaining new attractions include the following. In Williamsburg, Busch Gardens will open the Loch Ness Monster. The legend lives on.
Marc G. Swanson: For 2024, we have an exciting lineup of new rides attractions events and new.
Marc G. Swanson: New and improved in park venues and offerings with something new and meaningful in our parks.
Speaker Change: Me highlight a few of our new.
Marc G. Swanson: Rides and attractions.
Marc G. Swanson: Along with a couple of events.
Marc G. Swanson: In March she won't San Antonio Open catapult falls, the world's first launched fluent coaster featuring the worlds steepest drop in the Polish flume drop in Texas.
Marc G. Swanson: Also.
Marc G. Swanson: Orlando opened tasiast underwater twist featuring.
Marc G. Swanson: The casualties underwater twist Florida's most immersive water slide that takes riders on an exhilarating journey into a world of watery wonders set to an inspiring original musical score.
Marc G. Swanson: The remaining new attractions include the following.
Marc G. Swanson: In Williamsburg, Busch Gardens will open Loch Ness Monster the legend lives on.
Marc G. Swanson: An all-new experience loaded with all-new thrills, dramatic storytelling, and innovative effects, as it takes riders on Nessie's newly updated Signature Track. In Orlando, SeaWorld Orlando will open Penguin Trek, an unforgettable multi-launch family coaster adventure where guests will navigate the harsh Antarctic environment in search of a colony of penguins. This attraction includes a new realm featuring a restaurant, a Signature Bar, and an Expansive Gift Shop, along with one of the largest collections of penguins in North America. Penguin Trek will be an indoor/outdoor coaster experience.
Marc G. Swanson: And all new experience loaded with all new thrills dramatic storytelling and innovative effects as it takes riders on sce's newly updated signature track.
Marc G. Swanson: In Orlando Seaworld, Orlando will open Penguin track and unforgettable multi Lance lauck multi launch family coaster adventure.
Marc G. Swanson: Where guests will navigate the harsh Antarctic environment in search of a colony of Penguins.
Marc G. Swanson: This attraction includes a new realm, featuring a restaurant.
Marc G. Swanson: Signature bar inexpensive gift shop, along with one of the largest collections of Penguins in North America.
Marc G. Swanson: Penguin will be an indoor outdoor coaster experience.
Marc G. Swanson: Park's first family coaster as well as the eight and most immersive edition to the coaster capital of Orlando.
Marc G. Swanson: Parks First Family Coaster, as well as the 8th and most immersive addition to the Coaster Capital of Orlando. In San Diego, SeaWorld San Diego will open Jewels of the Sea, the Jellyfish Experience, a first-of-its-kind attraction featuring a compelling mix of immersive media and live jellyfish. This interactive view into the mysterious underwater world of glowing and graceful jellyfish will be something to see. In Tampa Bay, this garden's Tampa Bay will open Phoenix Rising, a family-friendly roller coaster that takes riders soaring above the Serengeti Plains, then drops into an array of fun-filled twists and turns at speeds up to 44 miles per hour.
Marc G. Swanson: In San Diego Seaworld, San Diego will open jaws of the see the jellyfish experience.
Marc G. Swanson: First of its kind attraction, featuring a compelling mix of immersive media and live jellyfish.
Marc G. Swanson: This interactive view into the mysterious underwater world of blowing and graceful jellyfish.
Marc G. Swanson: Will be something to see.
Marc G. Swanson: And Tampa Bay, which gardens, Tampa Bay will open Phoenix rising the family friendly roller coaster that takes riders sorry above the Serengeti plain.
Marc G. Swanson: Then drops into an array of fun filled twist and turns at speeds up to 44 miles per hour.
Marc G. Swanson: This will be the tallest and fastest inverted family coaster in North America. Other attractions and events set to open include Ticket to Pooh Splash at Aquatica San Antonio; Aquaglow at Aquatica or Orlando; 1-2-3 Playground and Sunny Day Carousel at Sesame Place, Philadelphia; Nitro Racer at Water Country USA; Castaway Falls at Adventure Island; and Dine with Elmo and Friends at Sesame Place in
Marc G. Swanson: This will be the tallest and fastest inverted family coaster in North America.
Marc G. Swanson: Other attractions and events and include ticket slash at Aquatica San Antonio.
Marc G. Swanson: Aqua glow at Aquatica Orlando.
Marc G. Swanson: 123, playground, and Sunny day care sell at Sesame place Philadelphia.
Marc G. Swanson: Nitro racer at water country USA.
Marc G. Swanson: Castaway falls at Adventure Island.
Marc G. Swanson: And dine with Elmo and friends at Sesame place San Diego.
Marc G. Swanson: Now, let me give a brief update on some of our strategic initiatives. First, we continue to progress with our cost and efficiency-related work, and as we noted last quarter, we expect $50 million of real-life savings in 2024. As you all know, cost management and discipline is a key focus of our management team, and we have demonstrated our ability to deliver on cost efficiencies over the last few years. Second, on the digital transformation front, we continue to build out our CRM capabilities, which are still in their infancy, and roll out and improve our mobile app.
Speaker Change: Now, let me give a brief update on some of our strategic initiatives.
Marc G. Swanson: First we continued to progress with our cost and efficiency related work and as we noted last quarter, we expect $50 million of realized savings in 2024.
Marc G. Swanson: As you all know cost management discipline is a key focus of our management team and we have demonstrated our ability to deliver on cost efficiencies over the last few years.
Marc G. Swanson: Second on the digital transformation front, we continue to build out our CRM capabilities.
Marc G. Swanson: They're still in their infancy, and rollout and improve our mobile app.
Marc G. Swanson: In regards to our mobile app, we are pleased that it is being used by an increasing number of guests in our park to improve their in-park experience. The app has now been downloaded more than 9.4 million times, up from $8.5 million at the end of Q4. Total revenue generated on the app is up approximately 10% compared to the prior year, and we are now seeing an approximately 28% increase in average transaction value for food and beverage purchases made through the app compared to point-of-sale orders. Mobile ordering is operational at approximately 88% of our target restaurants.
Marc G. Swanson: With regard to our mobile App. We are pleased that it is being used by an increasing number of guests in our parks.
Marc G. Swanson: To improve their in park experience.
Marc G. Swanson: <unk> has now been downloaded more than nine 4 million times.
Marc G. Swanson: Up from $8 5 million at the end of Q4.
Marc G. Swanson: Total revenue generated on the App is up approximately 10% compared to prior year and we are now seeing approximately.
Marc G. Swanson: And approximately 28% increase in average transaction value for food and beverage purchases made through the app compared to point of sale orders.
Marc G. Swanson: Mobile ordering is operating at approximately 88% of our targeted restaurants.
Marc G. Swanson: We are excited about the potential of the app and its ability to improve the in-park guest experience, drive increases in revenue, and decreases in cost. We are continuing to refine current capabilities and develop additional capabilities to further increase engagement and optimize the experience. Third, on the international front, we are excited that SeaWorld Abu Dhabi is celebrating its one-year anniversary this month, and their performance is ahead of expectation.
Marc G. Swanson: We are excited about the potential of the app and its ability to improve the in park guest experience.
Marc G. Swanson: Drive increases in revenue and decreases in cost.
Marc G. Swanson: We are continuing to refine current capabilities and develop additional capabilities to further increase engagement and optimize the experience.
Marc G. Swanson: Third on the international front, we are excited that Seaworld Abu Dhabi is celebrating its one year anniversary this month.
Marc G. Swanson: And their performance is ahead of expectations.
Marc G. Swanson: We continue to make progress with discussions related to other international opportunities and expect to have more to share in the coming quarters. Fourth, on the hotel front, we're very excited about our hotel opportunities across our park portfolio. We continue to have conversations with various partners, and we'll share more in the coming quarters. As we discussed last quarter, we are laser-focused on the ROI for these hotel opportunities.
Marc G. Swanson: We continue to make progress with discussions related to other international opportunities and expect to have more to share in coming quarters.
Marc G. Swanson: Fourth on the hotel front.
Marc G. Swanson: We're very excited about our hotel opportunity across our product portfolio. We continue to have conversations with various partners.
Marc G. Swanson: We will share more in the coming quarters.
Marc G. Swanson: As we discussed last quarter, we are laser focused on the ROI for these hotel opportunities.
Marc G. Swanson: I'm very excited about the significant investments we are making and the many initiatives we have underway across our business that we expect will improve the guest experience, allow us to generate more revenue, and make us a more efficient and more profitable enterprise. We are building an even stronger and more resilient business that we are confident and expect will deliver improved operational and financial results and meaningful increases in shareholder value. Let me briefly comment on our balance sheet, which continues to be strong.
Marc G. Swanson: I'm very excited about the significant investments, we are making and the many initiatives we have underway across our business.
Marc G. Swanson: And we expect will improve the guest experience.
Marc G. Swanson: Allow us to generate more revenue and make us a more efficient and more profitable enterprise.
Marc G. Swanson: We are building, an even stronger and more resilient business.
Marc G. Swanson: We are confident and expect will deliver improved operational and financial results and meaningful increases in shareholder value.
Marc G. Swanson: Let me briefly comment on our balance sheet, which continues to be strong.
Marc G. Swanson: Our March 31st, 2024 net total leverage ratio is 2.57 times, and we had approximately $577 million of total available liquidity, including approximately $204 million of cash on the balance sheet in advance of us starting our summer season, where we typically generate the majority of our cash flow. This strong balance sheet gives us flexibility to continue to invest in and grow our business and to opportunistically allocate capital with the goal of maximizing long-term value for shareholders. In January, we repriced our term loan and reduced our interest rate by 50 basis points, or approximately $5 million per year.
Marc G. Swanson: Our March 31, 2024, net total leverage ratio is 257 times.
Marc G. Swanson: And we had approximately $577 million of total available liquidity incur.
Marc G. Swanson: Including approximately $204 million of cash on the balance sheet and.
Marc G. Swanson: In advance of us starting our summer season, where we typically generate the majority of our cash flow.
Marc G. Swanson: This strong balance sheet gives us flexibility to continue to invest in and grow our business.
Marc G. Swanson: And to Opportunistically allocate capital with the goal to maximize long term value for shareholders.
Marc G. Swanson: In January we repriced, our term loan and reduced our interest rate by 50 basis points or approximately $5 million per year.
Marc G. Swanson: Earlier this month, we paid off our high-cost senior secured notes raised in 2020 with an add-on to our term loan, which we expect will save at least $2 million in interest per year, and we raised an incremental $152.5 million that we put on our balance sheet. I want to again thank our stockholders and board of directors for their recent overwhelming approval of our $500 million dollar share repurchase program, which we have already begun to implement and through which we are returning capital to shareholders. During the first quarter, we repurchased 375,000 shares for an aggregate total of approximately $20.2 million. Subsequent to March 31st, 2024 through May 6th, 2024.
Marc G. Swanson: Earlier this month, we paid off our high cost senior secured notes raised in 2020.
Marc G. Swanson: With an add on to our term loan, which we expect will save at least $2 million of interest per year.
Marc G. Swanson: And we raised an incremental $152 $5 million that we put on our balance sheet.
Marc G. Swanson: I want to again, thank our stockholders and board of directors for their recent overwhelming approval.
Marc G. Swanson: Of our $500 million share repurchase program, which we have already begun to implement and through which through which we are returning capital to shareholders.
Marc G. Swanson: During the first quarter, we repurchased 375000 shares.
Marc G. Swanson: For an aggregate total of approximately $22 million.
Marc G. Swanson: Subsequent to March 31, 2024 through May six 2024.
James W. Forrester: We purchased approximately 1.5 million shares for an aggregate total of approximately $80.6 million. Needless to say, the board and company believe our shares are materially undervalued. We have significant confidence in our business, and as we shared with you last quarter, any reasonable way you look at it, we feel we are materially undervalued and that there is significant upside opportunity in our current share price. Our financial position is strong, our business is resilient, and our first quarter results, along with the coming opening of more of our ride, attraction, and event lineup.
Marc G. Swanson: We purchased approximately one 5 million shares.
James W. Forrester: For an aggregate total of approximately $86 million.
James W. Forrester: Needless to say the board and company believe our shares are materially undervalued.
James W. Forrester: We have significant confidence in our business.
James W. Forrester: And our prospects and as we shared with you last quarter any reasonable way you look at it we feel we are materially undervalued and that there is significant upside opportunity in our current share price.
James W. Forrester: Our financial position is strong our business is resilient and our first quarter results along with the coming opening of more of a ride attraction to that lineup.
James W. Forrester: All the initiatives that we have underway give us confidence in our ability to continue to achieve new records in revenue and adjusted EBITDA for 2024. With that, Jim will discuss our financial results in more detail.
James W. Forrester: And all of the initiatives that we have underway give us confidence in our ability to continue to achieve new records in revenue and adjusted EBITDA for 2024.
Jim: With that.
James W. Forrester: Jim will discuss our financial results in more detail.
James W. Forrester: Jim.
James W. Forrester: Thank you, Marc. Our team is looking forward to sharing our quarter's strong performance with our audience this morning. During the first quarter, we generated record total revenue of $297.4 million, an increase of $4.1 million or 1.4% when compared to the first quarter of 2023. The increase in total revenue is primarily a result of an increase in attendance, partially offset by decreases in emissions per capita, and in part per capita spending. Attendance for the first quarter of 2024 increased by approximately 72,000 guests, or 2.1% when compared to the prior year quarter. Attendance was positively impacted by a favorable calendar shift, including the earlier timing of Easter and certain school spring breaks, and was negatively impacted by adverse weather, particularly at our Florida parks, including during peak visitation periods.
Jim: Thank you Mark our teams look forward to sharing our quarter's strong performance with our audience. This morning.
James W. Forrester: Excluding the impact of certain one-time revenue associated with the opening of SeaWorld Abu Dhabi in 2023, total revenue per capita increased 1.2%, and in part, per capita spending increased 4%. However, including the impact of certain one-time revenue associated with the opening of SeaWorld Abu Dhabi in 2023, total revenue per capita decreased 0.7% to $86.21. And in part, per capita spending decreased 0.5% to $38.15 from the first quarter of 2023, while emissions per capita decreased 0.9% to $48.60. Admissions per capita decreased primarily due to the net impact of the admissions product mix when compared to the prior year quarter.
James W. Forrester: During the first quarter, we generated record total revenue of $297 4 million, an increase of $4 1 million or one 4% when compared to the first quarter of 2023.
James W. Forrester: The increase in total revenue was primarily a result of an increase in attendance, partially offset by decreases in admission per capita and in park per capita spending.
James W. Forrester: Attendance for the first quarter of 2024 increased by approximately 72000 guests or two 1% when compared to the prior year quarter.
James W. Forrester: Dennis was positively impacted by a favorable calendar shift, including the earlier timing of Easter and certain school spring breaks and was negatively impacted by adverse weather, particularly at our Florida parks, including during peak visitation periods.
James W. Forrester: Excluding the impact of certain onetime revenue associated with the opening of Seaworld Abu Dhabi in 2023 total revenue per capita increased one 2% and in park per capita spending increased 4%.
James W. Forrester: Including the impact of certain onetime revenue associated with the opening of Seaworld Abu Dhabi in 2023 total revenue per capita decreased <unk>, 7% to $86 21.
James W. Forrester: And in Park per capita spending decreased <unk>, 5% to $38 50.
James W. Forrester: From the first quarter of 2023 admission per capita decreased <unk>, 9% to $48 and success.
James W. Forrester: Admission per capita decreased primarily due to the net impact of the admissions product mix when compared to the prior year quarter.
James W. Forrester: In part, per capita spending decreased primarily due to a decrease in one-time revenue related to our international service agreements, partially offset by the impact of pricing initiatives when compared to the first quarter of 2023. Operating expenses decreased $7.8 million, or 4.5%, when compared to the first quarter of 2023. The decrease in operating expenses is primarily due to a decrease in costs associated with our international service agreements and a decrease in legal costs, including approximately $3.1 million related to the previously disclosed temporary COVID-19 park closures when compared to the first quarter of 2023. General administrative expenses decreased $0.4 million, or 0.8%, compared to the first quarter of 2020.
James W. Forrester: In Park per capita spending decreased primarily due to a decrease in one time revenue related to our international services agreements, partially offset by the impact of pricing initiatives when compared to the first quarter of 2023.
James W. Forrester: Operating expenses decreased $7 8 million or four 5% when compared to the first quarter of 2023. The decrease in operating expenses was primarily due to a decrease in costs associated with our international services agreements and a decrease in legal costs, including approximately $3 $1 million related to the previously does.
James W. Forrester: Clothes temporary COVID-19 park closures when compared to the first quarter of 2023.
James W. Forrester: Selling general and administrative expenses decreased <unk> $4 million or 0.8% compared to the first quarter of 2023.
James W. Forrester: We generated a net loss of $11.2 million for the first quarter, compared to a net loss of $16.5 million in the first quarter of 2023. The increase in net income was primarily a result of the impact of lower operating expenses. We generated adjusted EBITDA of $79.2 million, an increase of $6.7 million when compared to the first quarter of 2023. Justin Ebert was positively impacted by the decrease in expenses and the increase in total revenue.
James W. Forrester: We generated a net loss of $11 2 million for the first quarter compared to a net loss of $16 $5 million in the first quarter of 2023.
James W. Forrester: <unk> net income was primarily a result of the impact of lower operating expenses.
James W. Forrester: We generated adjusted EBITDA of $79 $2 million, an increase of $6 $7 million when compared to the first quarter of 2023, adjusted EBITDA was positively impacted by the decrease in expenses and an increase in total revenue.
James W. Forrester: Now turning to our balance sheet, our March 31st, 2024 net total leverage ratio is 2.57 times, and we had approximately $577 million of total available liquidity, including $204 million of cash in the balance sheet. A strong balance sheet gives us flexibility to continue to invest in and grow our business and to opportunistically allocate capital with the goal of maximizing long-term value for our shareholders. As previously mentioned, in January, we repriced our term loan and reduced our interest expense.
James W. Forrester: Now turning to our balance sheet. Our March 31, 2024, net total leverage ratio was 257 times and we had approximately $577 million of.
James W. Forrester: Total available liquidity, including $204 million of cash on the balance sheet.
James W. Forrester: Our strong balance sheet gives us flexibility to continue to invest in and grow our business and to Opportunistically allocate capital with the goal to maximize long term value for our shareholders as.
James W. Forrester: As previously mentioned in January we repriced, our term loan and reduced our interest expense and earlier. This month, we paid off our high cost senior secured notes raised in 2020 with an add on to our term loan which will reduce the company's annual interest expense going forward as part of the add on and we raised an incremental 152.
James W. Forrester: And earlier this month, we paid off our high-cost senior secured notes raised in 2020 with an add-on to our term loan, which will reduce the company's annual interest expense going forward. As part of the add-on, we raised an incremental $152.5 million that we put on our balance sheet. As Marc already mentioned, during the quarter, our stockholders and board of directors approved a new $500 million share buyback authorization in anticipation of us exhausting our previously authorized $250 million authorization in August 2022.
James W. Forrester: $2 $5 million that we put on our balance sheet.
James W. Forrester: As Mark already mentioned during the quarter, our stockholders and board of directors approved a new $500 million share buyback authorization in anticipation of us exhausting, our previously authorized $250 million authorization from August 2022.
James W. Forrester: During the first quarter, we repurchased 375,000 shares for an aggregate total of approximately $20.2 million. Subsequent to March 31, 2024 and through May 6, 2024, we purchased approximately 1.5 million shares for an aggregate total of approximately $80.6 million. As Marc said, we believe our shares are materially undervalued.
James W. Forrester: During the first quarter, we repurchased 375000 shares for an aggregate total of approximately $20 2 million subs.
James W. Forrester: Subsequent to March 31, 2024, and through May six 2020 for.
James W. Forrester: Purchased approximately one 5 million shares for an aggregate total of approximately $86 million as Mark said, we believe our shares are materially undervalued.
James W. Forrester: Our deferred revenue balance as of the end of April was $217.7 million. Excluding certain one-time items, deferred revenue increased approximately 1.4% when compared to April of 2020. As a reminder, our Deferred Revenue Balance contains a number of products, including ticketing, vacation packages, annual and seasonal passes, and ancillary products. We also continue to see many passholders who have been with us for at least a year who transition to month-to-month payments at the completion of their initial pass commitment. This month's and next month's revenue does not show up as deferred revenue.
James W. Forrester: Our deferred revenue balance as of the end of April was $217 $7 million, excluding certain one time items differed revenue increased approximately one 4% when compared to April of 2023.
James W. Forrester: As a reminder, our deferred revenue balance contains a number of products to include ticketing vacation packages Andrew on season passes and ancillary products. We also continue to see many pass holders who have been with us for at least a year, who transitioned to month to month payments at the completion of their initial pass commitment this month.
James W. Forrester: A month's revenue does not show up as deferred revenue.
James W. Forrester: Through April 2024, our past base, including all past products, was down 3% compared to April 2023 but up 32% when compared to April 2019. We are pleased that we are seeing mid-single to low double-digit price increases depending on our past products compared to prior years. We believe we have our best past benefits program ever, which we expect will drive additional increases in past sales and a strong past base for this year, especially now that we are in the peak advertising and selling season. We spent $87.3 million on CapEx in the first quarter of 2024, of which approximately $56.3 million was on core CapEx, and approximately $31 million was on expansion and or ROI projects.
James W. Forrester: Through April 2020 for our pass base, including all pass products was down 3% compared to April 2023, but up 32% when compared to April 2019, we're pleased that we're seeing mid single to low double digit price increases depending on our past product compared to prior year. We believe we have.
James W. Forrester: Our best past benefits program ever, which we expect will drive additional increases in pass sales and our strong past space for this year, especially now that we are in the peak advertising and selling season.
James W. Forrester: You spent $87 3 million on Capex in the first quarter of 2024.
James W. Forrester: Approximately $56 $3 million plus on core Capex and approximately $31 million plus on an expansion and or ROI projects for 2024, we expect to spend approximately $175 million on core capex and approximately $50 million of capex on growth and ROI.
James W. Forrester: In 2024, we expect to spend approximately $175 million on core CapEx and approximately $50 million of CapEx on growth and ROI projects. Now, let me turn the call back over to Marc, who will share some final thoughts. Yeah, thanks, Jim.
James W. Forrester: Next.
Marc: Now, let me turn the call back over to Mark who will share some final thoughts.
Marc: Yes, Thanks, Tim.
Marc G. Swanson: Look, before we open the call to your questions, I have some closing comments. In the first quarter of 2024, we came to the aid of 173 animals in need. Over our history, we have helped over 41,000 animals, including bottlenose dolphins, manatees, sea lions, seals, sea turtles, sharks, birds, and more.
Marc: But before we open the call to your questions I have some closing comments.
Marc G. Swanson: In the first quarter of 2024 weeks.
Marc G. Swanson: We came to the aid of 173 animals in need.
Marc G. Swanson: Over our history, we have helped over 41000 animals, including auto nose Dolphins Manatees Sea Lions.
Marc G. Swanson: <unk> <unk>.
Marc G. Swanson: <unk> turtles sharks.
Marc G. Swanson: <unk> and more.
Marc G. Swanson: I'm really proud of the team's hard work and their continued dedication to these important rescue efforts. We're certainly excited about 2024, and I want to thank our ambassadors for their dedication and commitment as we prepare for what we believe will be an exciting and busy summer season. We continue to believe there are significant additional opportunities to improve our execution, take advantage of clear growth opportunities, and continue to drive meaningful long-term growth in both revenue and adjusted EBITDA.
Speaker Change: I'm really proud of the team's hard work and their continued dedication to these important rescue efforts.
Marc G. Swanson: We're certainly excited about 2024 and I want to thank our ambassadors for their dedication and commitment as we prepare for what we believe will be an exciting and busy summer season.
Marc G. Swanson: We continue to believe there are significant additional opportunities to improve our execution take advantage of clear growth opportunities and continue to drive meaningful long term growth in both revenue and adjusted EBITDA.
Marc G. Swanson: We continue to have high confidence in our long-term strategy and our ability to deliver significantly improved operating and financial results that we expect will lead to meaningfully increased value for stakeholders. So now we can open it up for your questions.
Marc G. Swanson: We continue to have high confidence in our long term strategy and our ability to deliver significantly improved operating.
Marc G. Swanson: And financial results, we expect will lead to meaningfully increased value for stakeholders.
Marc G. Swanson: So now we can open it up for your questions.
Operator: We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.
Speaker Change: We will now begin the question and answer session.
Operator: If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. Please limit yourself to one question and one follow-up question. At this time, we will pause momentarily to assemble our roster. Our first question comes from Steve Wieczynski of Stiefel. Go ahead, please.
Operator: To ask a question you May Press Star then one on your Touchtone phone.
Operator: If you are using a speakerphone please pick up your handset before pressing the keys.
Operator: If at any time your question has been addressed.
Steven Moyer Wieczynski: I would like to withdraw your question. Please.
Steven Moyer Wieczynski: Please press Star then two.
Steven Moyer Wieczynski: Please limit to one question and one follow up question.
Operator: At this time, we will pause momentarily to assemble our roster.
Steven Moyer Wieczynski: Our first question comes from Steve Licensee of Stifel Go ahead. Please.
Steven Moyer Wieczynski: Yeah, hey guys, good morning. So, Marc, as we think about the remainder of, you know, this year, is there any way you can help us out with, you know, maybe how you guys are thinking about per capita, both on the admissions and the in-park side? Just, you know, we're just trying to understand a little bit better if there are going to be any more potential headwinds out there, you know, on both sides of the per cap, or if there's anything we need to think about over the second half of the year.
Steven Moyer Wieczynski: Yeah, Hey, guys good morning.
Steven Moyer Wieczynski: So some markets as we think about the remainder of this year is there is there any way you can help us out with maybe how you guys are thinking about per caps. Both on your admissions in the in park side. Just we're just trying to understand little bit better if theyre going to be any more potential headwinds out there.
Steven Moyer Wieczynski: Both sides of the per caps or if there's anything we need to think about over the second half of the year and then as you think about the ability to take price.
Steven Moyer Wieczynski: And then as you think about the ability to take price on the admission side of things, any updated thoughts on how you guys are thinking about taking, you know, taking more price? I know Jim talked about mid-single-digit price increases on past products, but any other color there would be would be helpful. Thanks.
Steven Moyer Wieczynski: On the admission side of things.
Steven Moyer Wieczynski: Any updated thoughts on how you guys are thinking about taking taking more price I know Jim talked about.
Steven Moyer Wieczynski: Mid single digit price increases on on pass products, but any other color there would be it would be helpful. Thanks.
Marc G. Swanson: Yes, Steve, I can help you with that question. So first, on pricing, look, obviously, you heard Jim talk about the pricing issues we've seen on past rides. So we're going to continue to execute on pricing. That's a tenet of our strategy that we've talked about, you know, growing prices on a year-over-year basis. And so we'll continue to do that.
Speaker Change: Yes, Steve I can I can help you with that question. So first on on pricing look obviously.
Marc G. Swanson: Jim talked about the price increases we've seen on past pricing. So we're going to continue to execute on pricing.
Marc G. Swanson: Tenant of our strategy that we've talked about growing.
Marc G. Swanson: Pricing on a year over year basis, and so we'll continue to do that.
Marc G. Swanson: I think as far as the remainder of the year on the per cap goes, there's a couple of things I think you've got to focus on a little bit. We're taking the pricing, but what is impacting per cap a little bit on the admission side is obviously the mix, and Jim called that out. You have group business being up more this year, and while that's great to see group typically has a lower overall per cap than some of our other products, multi-day tickets are up, so that spreads that revenue over multiple visits, which would be a drag on per cap at times.
Speaker Change: I think as far as the remainder of the year on the per cap. So there's a couple of things I think you got it.
Marc G. Swanson: Focus on a little bit one.
Marc G. Swanson: We're taking the pricing.
Marc G. Swanson: But what is impacting per cap a little bit on the admission side, obviously is the mix and Jim called that out. So you have group business being up.
Marc G. Swanson: No more of this year and while that's great to see group typically has a lower a lower overall per cap and then some of our other products multi day tickets are up so that spreads that revenue over over multi multiple visits.
Marc G. Swanson: B.
Marc G. Swanson: A drag on per cap at times so.
Marc G. Swanson: So, there's the pricing we're taking, and then there's the mix of the products that are being used, which is going to ebb and flow, but I think overall we have confidence in the overall pricing strategy on the admission side on a go-forward basis. I can tell you that in April, admissions per cap were just flat to, you know, very slightly positive. So, you know, that might give you some context for that, even with some of that mixed in.
Marc G. Swanson: There is there is the pricing we're taking and then there is the mix of the products that are being used which is going to ebb and flow, but I think overall, we have we have confidence in the overall pricing strategy on the admission side on a go forward basis actually tell you.
Marc G. Swanson: In April with the admissions per cap was.
Marc G. Swanson: Just just flat.
Marc G. Swanson: Very slightly positive so.
Marc G. Swanson: That might give you some context for that.
Marc G. Swanson: Even with some of that mix.
Marc G. Swanson: We got to where we are there in April, and then Jim mentioned the deferred revenue at the end of April being up 1.4%, and certainly, you know, I think that's another indication that we're getting pricing as well. As far as the MPARC, you know, we... We normalized the Q1 number for the one-time benefit from Abu Dhabi last year.
Marc G. Swanson: We got to where we are there in April.
Marc G. Swanson: And then Jim mentioned the deferred revenue at the end of April being up one 4% and certainly I think that's another indication that we're getting.
Marc G. Swanson: <unk> as well.
Marc G. Swanson: As far as the in park.
Marc G. Swanson: <unk>.
Marc G. Swanson: We normalize that.
Marc G. Swanson: The Q1 number for the one time benefit from the <unk> last year.
Marc G. Swanson: That should normalize here going forward, and really what we should have is the cadence of our new things coming online, some of our new venues and whatnot. So again, we're excited about the opportunities there. I think we have some exciting things going on in MPARC. We've certainly got some areas that we've got to do a better job of as well, but I think overall the anomaly you saw here in Q1 with the international will normalize going forward, and I can also tell you that MPARC per cap was positive in April as well. Okay, thanks, Marc. That's a really good color.
Marc G. Swanson: That will that should normalize here going forward and then really what we should have as you know.
Marc G. Swanson: The cadence of our new things coming online some of our new venues and whatnot. So again, we're excited about the opportunities there I think we have.
Marc G. Swanson: Some exciting things going on.
Marc G. Swanson: And in Park, we've got certainly some areas that we got to do a better job of as well but.
Marc G. Swanson: I think overall.
Marc G. Swanson: The anomaly you saw here in Q1 with the international that'll that'll normalize going forward and I can also tell you that.
Marc G. Swanson: Part per cap.
Marc G. Swanson: Positive in April as well.
Steven Moyer Wieczynski: And then I want to ask about the potential hotel investments. You know, we continue to get asked about when we'll, you know, when we'll hear more about those hotel projects. And, you know, I feel like we've heard about these investments now for a while. But based on your commentary and your prepared remarks, it still seems like you're, you know, still quarters away. Maybe I'm reading a little bit too much into that before we hear anything. So I was wondering maybe why it's taking so long to get any more color around those projects.
Marc G. Swanson: Okay. Thanks, Marc that's really good color and then wanted to ask about the potential.
Steven Moyer Wieczynski: Hotel investments, we continue to get asked about when will you know when we'll hear more about those those hotel projects and feel like we've heard about these investments now for a while but based on your commentary in your prepared remarks, it still seems like you're still quarters away, maybe I'm reading a little bit too much into that before we hear any.
Steven Moyer Wieczynski:
Steven Moyer Wieczynski: So just just wondering why you know maybe why it's taking so long to get any more color.
Steven Moyer Wieczynski: Those projects and if you do do those potential projects then how do you think about the way.
Steven Moyer Wieczynski: You would go about those projects versus using your free cash flow for repurchasing shares and things like that thanks.
Marc G. Swanson: And if you do do those potential projects, then how do you think about the way you go about those projects versus using your free cashflow for repurchasing shares and things like that? Thanks. Yeah, sure. So, Steve, we talked a lot about this last quarter. I think one of the things we heard from our investors is that they wanted more color on the hotels and how we're thinking about everything from the structure to the RLI.
Speaker Change: Yeah sure so Steve we talked a lot about this this last quarter I think one of the things we had heard.
Marc G. Swanson: From from our investors as they wanted they wanted more color on hotels and how we're thinking about everything from the structure to the ROI. So I think we did a pretty good job last quarter of laying that out and really its focus on finding that right structure that right way to set us up whether that's with a partner.
Marc G. Swanson: So, I think we did a pretty good job last quarter of laying that out. And really, it's focused on finding that right structure, that right way to set this up, whether that's with a partner or whatever you want to think about it, that achieves that unlevered cash-in-cash return that we talked about of 20%. And we've committed to being laser focused on that RLI, and we're going to take the appropriate time to make sure we get that right.
Marc G. Swanson: Or do you want to think about it that achieves that that unlevered.
Marc G. Swanson: Cash on cash return that we talked about 20%.
Marc G. Swanson: We've committed to being laser focused on that ROI and we're going to we're going to take the appropriate time to make sure we get that right.
Marc G. Swanson: And certainly, to your point, that's what we're in the process of doing. So, you know, more to come in the coming quarters. As far as how we finance that, I certainly don't think it needs to be entirely out of cash. There are multiple ways you could do this, and certainly one option would be financing some portion of it. So again, I think what you're going to see us do is focus on the structure and the financing that makes the most sense for us, and, you know, we'll work with the board on that.
Marc G. Swanson: Certainly oh.
Marc G. Swanson: That's what we're in the process of doing.
Marc G. Swanson: So more to come on the coming quarters as far as how we finance that I, certainly don't think it needs to be.
Marc G. Swanson: Out of entirely out of cash there is multiple ways you can do this and certainly one option would be.
Marc G. Swanson: Financing some portion of it so again I think what youre going to see US do is focus on the structure and the financing that makes the most sense for us.
Marc G. Swanson: We'll work with the board on that.
Steven Moyer Wieczynski: Okay. Thanks, Marc. I appreciate the color.
Speaker Change: Okay. Thanks, Mark appreciate the color.
Operator: The next question comes from Matthew Boss of J.P. Morgan. Go ahead, please.
Steven Moyer Wieczynski: The next question comes from Matthew Boss of Jpmorgan go ahead. Please.
Matthew V. Stroud: Great, thanks. So, Marc, I think it would be helpful if you could speak to underlying demand trends that you're seeing at your parks, maybe if there is any way to parse through the best you can, weather and some of the timing shifts during the quarter, and from a traffic perspective, what you've seen in April and early May, maybe regionally.
Matthew V. Stroud: Great. Thanks, So mark.
Marc: I think it would be helpful.
Matthew V. Stroud: If it would not be possible to speak to underlying demand trends that you're seeing at your parks, maybe if if any way to parse through the best you can weather and some of the timing shifts during the quarter.
Matthew V. Stroud: From a traffic perspective, what you've seen in April and early May maybe regionally.
Marc G. Swanson: Hey, Matthew. I'm not going to give you a ton of individual color on parks just for competitive reasons, but I can try to help you out with some of the shifting and weather impacts and whatnot. So, obviously, in the quarter, we have the benefit of Easter moving from April of last year into March of this year, and then you also had some incremental weekend days in March as well. That kind of shift that we called it, that normalized in April, so when you get to April, you have the reversal of the Easter shift, and then you have the reversal of those weekend days as well.
Marc: Hey, Matthew.
Marc G. Swanson: Look I'm not going to give you a kind of individual color on parts just for competitive reasons, but I can try to help you out.
Marc G. Swanson: On some of the shifting and weather impact.
Marc G. Swanson: So obviously.
Marc G. Swanson: In the quarter.
Marc G. Swanson: We have the benefit of Easter moving from April of last year, and it's a marker.
Marc G. Swanson: This year and then you also had a.
Marc G. Swanson: Some incremental weekend days in March as.
Marc G. Swanson: As well that that.
Marc G. Swanson: Kind of shifts that we called it that.
Marc G. Swanson: That normalized in April so when you when you get to April you have the reversal of the Easter shift and then you have the reversal of those does weekend days as well.
Marc G. Swanson: And so, really, on a combined basis, March and April, on a combined basis, if you just look at attendance for the two months, which would normalize for those six, attendance was slightly positive. What was the drag earlier in the year really was the weather, and the weather really in Q1 was mainly in Florida, and that offset most of the benefit that we got from Easter and the calendar shift in Q1. And especially if you happen to be in Florida over President's Day weekend, which is one of the bigger weekends, obviously, in Q1, we had quite a bit of rain in our markets in Orlando and Tampa on that Saturday and Sunday. In fact, like the Daytona 500, it got postponed until that Monday. So the weather really offset that benefit that we saw in Q1, for the most part.
Marc G. Swanson: And so really.
Marc G. Swanson: On a combined basis March and April on a combined basis. If you just look at attendance for the two months, which would normalize for those Sis are tenants was slightly positive.
Marc G. Swanson: What what was the drag earlier in the year really was on the weather and the weather really in Q1 was mainly in Florida and that offset most of the benefit that we got from Easter and calendar shift in Q1, and especially if you're if you happen to be in Florida over.
Marc G. Swanson: Presidents' day weekend, which is one of the bigger weekends, obviously in Q1.
Marc G. Swanson: You know we had quite.
Marc G. Swanson: Quite a bit of rain in our markets in Orlando and Tampa on that on that Saturday and Sunday in fact, like the Daytona 500 got postponed.
Marc G. Swanson: Until until that Monday so.
Marc G. Swanson: Weather really offset that benefit that we saw in Q1 for the most part a good portion of it and then I already gave you kind of the March April combined.
James W. Forrester: Great. And then maybe, Jim, as a follow-up, any customer pushback on price that you're seeing across your offerings, or any changes to note in the promotional or competitive landscape to call out?
Marc G. Swanson: Great and then maybe Jim as a follow up any customer pushback to price that you're seeing across your offerings or.
Speaker Change: Any changes to note in the promotional or competitive landscape to call out.
James W. Forrester: Okay.
James W. Forrester: Yeah.
James W. Forrester: Yes.
Speaker Change: I can take that sounds like on the on the pricing.
James W. Forrester: Yeah, I can take that. So, look, on pricing. Look, we continue to focus on pricing. Like I said, it's a key tenet of our strategy. And, look, there's going to be times that, you know, we run different offers, different things to try to pulse, you know, certain demand. So, we're always focused on driving total revenue, and at times, you know, maybe that's through some offers and things like that.
James W. Forrester: We continue to focus on pricing like I said, it's a key tenant of our strategy and look there's going to be times that we run we run different offers different things to try to pulse.
James W. Forrester:
James W. Forrester: First certain demand so we're always focused on driving total revenue.
James W. Forrester: And at times, maybe that's that's through some offers and things like that but overall I think over the long run over time, we believe pricing. This is something we can still we can still get and I kind of gave you a little more color on the mix and things like that that impacts.
James W. Forrester: But, overall, I think over the long run, over time, we believe pricing is something we can still get, and I kind of gave you a little more color on the mix and things like that, that impacts per cap as well.
James W. Forrester: Impacts for cap as well.
Speaker Change: Great Best of luck.
Speaker Change: Thank you.
Operator: The next question comes from Chris Woronka of Deutsche Bank. Go ahead, please.
James W. Forrester: The next question comes from Christopher <unk> of Deutsche Bank Go ahead. Please.
Chris Jon Woronka: Hey, good morning, guys. Nice quarter. Marc, you kind of reiterated the commitment to 50 million in cost saves and 24. Curious, you know, a Can we find out how much of that was maybe realized in Q1 or the cadence of it through the year? And then once you hit that target, is there, you know, more to do behind that as the revenue base grows? You know, what I can say, Chris, is that obviously, we have a tremendous focus on cost.
Chris Jon Woronka: Hey, good morning, guys nice quarter.
Chris Jon Woronka: Mark you you kind of reiterated the commitments 50 million in cost saves in 'twenty four.
Chris Jon Woronka: Curious.
Chris Jon Woronka: Can we find out how much of that was maybe realized in Q1 or is the cadence through the year and then once you hit that target is there.
Chris Jon Woronka: More to do behind that as the revenue base grows.
Chris Jon Woronka: Yes, what I can say Chris is obviously, we have a tremendous focus on cost I think you can see that demonstrated in our in our Q1 numbers with with the margin expansion you know we've done a good job of.
Chris Jon Woronka: I think you can see that demonstrated in our Q1 numbers with the margin expansion. You know, we've done a good job of growing revenue and managing our costs, which led to that margin expansion. You know, we're confident that we can continue to execute on our plans, and certainly part of those plans would be to try to identify additional savings beyond what I talked about. I don't have anything specific to share with you today, but I can tell you there's efforts around exactly that, and when we have more to share, we will on that.
Chris Jon Woronka: Growing revenue and managing our costs, which led to that led to that margin expansion. So.
Chris Jon Woronka: We're confident that we can continue to execute on our plans in <unk>.
Chris Jon Woronka: Certainly part of those plans would be to try to identify additional additional savings beyond what I talked about.
Chris Jon Woronka: Don't have anything specific to share with you today, but I can tell you.
Chris Jon Woronka: There's efforts around exactly that.
Chris Jon Woronka: When we have more to share we will on that.
Chris Jon Woronka: Okay, appreciate that, Marc. And a follow-up question is, might be difficult to answer specifically. But, you know, from where you guys sit, and you look at the Orlando market, since it's your largest, you feel like you're kind of gaining share as a percentage of the total market entertainment wallet, if that makes sense. Is there any way you guys measure that?
Speaker Change: Okay I appreciate that Marc and follow up is it might be difficult to answer specifically, but.
Chris Jon Woronka: From where you guys sit and you look at the look at the take the Orlando market since its your largest do you feel like youre kind of gaining share as a percentage of the total market entertainment wallet. If that makes sense is there any way you guys.
Chris Jon Woronka: Measure that.
Chris Jon Woronka: Yes.
Marc G. Swanson: Yeah, so, Chris, I don't want to go into a ton of commentary about individual parks other than to say, I mean, we're pleased with our performance in Orlando, and I'll leave it at that. You know, this park, I'm sitting, I'm looking at the park right now, and this park is a wonderful park. It's got a number of new events and things coming to the park this year, and I can tell you that, you know, we're pleased with the performance in that park, relative to, obviously, some of our others, so feel good about Orlando and all we have to offer here. Okay. Thanks, Marc.
Marc: Yeah, So Chris.
Chris Jon Woronka: Yeah.
Marc G. Swanson: I don't want to go into a ton of commentary about individual parks other than to say I mean, we're pleased with our performance in Orlando.
Marc G. Swanson: Now I'll leave it at that this park.
Marc G. Swanson: I'm sitting I'm looking at the FERC right now.
Marc G. Swanson: At Park is a wonderful park, it's got a number of new.
Marc G. Swanson: Events and things coming to the park this year and I can tell you that we're pleased with the performance in that part.
Marc G. Swanson: Relative to obviously some of the others. So.
Chris: You'll get about Orlando.
Marc G. Swanson: All we have to offer here.
Chris: Okay. Thanks Mark.
Operator: Our next question comes from James Hardiman of Wedbush Securities. Go ahead, please.
Marc G. Swanson: Our next question comes from James Hardiman of Wedbush Securities Go ahead. Please.
James Lloyd Hardiman: Hi, good morning. So I don't know if you can answer this, but just to sort of close the loop on Matt's question earlier, if we cut through all the noise of the shift through April, are you still up on a year-to-date basis in terms of attendance? No, we're not up on a year-to-day basis. What I was trying to say is March and April combined, we're up slightly in attendance at www.parksandresorts.com, which negates the benefit of Easter and the other shifts. So that's what I was trying to say. And then when you combine March and April, which gets rid of some of that shifting noise, we're up a slight amount in attendance. I got it.
James Lloyd Hardiman: Hi, good morning.
James Lloyd Hardiman: So I don't know if you answered this but just to sort of close the loop on.
James Lloyd Hardiman: Matt's question earlier.
James Lloyd Hardiman: We cut through all the noise of the shifts through April are you still up on a year to date basis in terms of attendance.
James Lloyd Hardiman: No were not up on a year to date basis, what I was what I was trying to say is March and April combined were up were up slightly in attendance.
James Lloyd Hardiman: And then you have the kind of a hangover from the January February weather.
James Lloyd Hardiman: That's what I was trying to get at it so well.
James Lloyd Hardiman: Most of the weather impact not all most of the weather impact occurred in January and February there were some in March as well, but that's the way to think about it. The January February early March weather.
James Lloyd Hardiman: Really the.
James Lloyd Hardiman: Negated the benefit of Easter and the other shifts.
James Lloyd Hardiman: So that's what I was trying to say and then when you combined March and April which gets rid of some of that shifting noise.
James Lloyd Hardiman: We're up a slight amount in attendance.
Marc G. Swanson: And then, and maybe I'm parsing words a little bit too much here, but I think the previous language in terms of how to think about 24 was for meaningful increases in revenue in EBITDA. And now we're talking about increases in revenue in EBITDA or record revenue in EBITDA. I guess I should ask if that's a meaningful change, do you still expect meaningful growth this year? And when I think about the first quarter, where, you know, revenues were pretty flat, but margins were up significantly.
Speaker Change: Got it and then and maybe I'm parsing words, a little bit too much here, but I think the meet the previous language in terms of how to think about 24 was for meaningful increases in revenue and EBITDA and now we're talking about increases in revenue and EBITDA are a record.
Marc G. Swanson: Revenue and EBITDA I guess speak to if that's a meaningful change do you still expect meaningful growth this year and as I think about the first quarter, where you know.
Marc G. Swanson: Revenues were were pretty flat, but margins were up significantly is that where you see the biggest opportunity. This year in terms of sort of the ability to grow margin or how do we think about the algorithms through the year should we expect a little bit more balanced in terms of revenue growth versus per cap growth versus margin.
Marc G. Swanson: Is that where you see the biggest opportunity this year, in terms of sort of the ability to grow margins? Or, as we think about the algorithms through the year, should we expect a little bit more balance in terms of, you know, revenue growth versus per-cap growth versus margin growth? Yeah, thanks, James.
Marc G. Swanson: Right.
James Lloyd Hardiman: I mean, first of all, we're still certainly very excited about 2024. So, we're sitting here today, and really, from May on, if you will, May 1st on, you still have roughly 75% of the year ahead of you, from an attendance standpoint, based on historical trends. So, we're still really excited about 2024. I think the opportunity for growth can come from, you know, multiple areas. So, you mentioned margins.
Speaker Change: Yeah. Thanks, James I mean first I mean, we're still certainly very excited about 2024 so.
James Lloyd Hardiman: We're sitting here today I mean really from from May on if you will may 1st time, you still got roughly 75% of the year ahead of you from an attendance standpoint based on historical trends. So we're still really excited about about 2024, I think the opportunity for further.
James Lloyd Hardiman: Growth can come from multiple areas. So you mentioned you mentioned margins.
Marc G. Swanson: You know, I think another big one, obviously, is if you kind of think about what has been an issue for some quarters now, it's really been the weather. So, if we get some tailwinds on the weather, I think that could certainly have a nice benefit to us, as well. But, you know, we'll have to see how that plays out. The weather wasn't good to start the year, obviously, but we'll see if that reverses course here going forward.
James Lloyd Hardiman: I think another big one obviously is if you kind of think about what what has been an issue.
Marc G. Swanson: For for some quarters now, it's it's really been the weather. So if we get if we get some some tailwind on the weather I think that could certainly.
Marc G. Swanson: Have a nice benefit to us as well but.
Marc G. Swanson: We'll have to see how that how that plays out the weather wasn't good good to start the year, obviously, but we'll see if that reverses course here going forward.
James Lloyd Hardiman: Got it. That's helpful. Thank you. The next question comes from Thomas Yeh of Morgan Stanley. Go ahead, please.
Speaker Change: Got it that's helpful. Thank you.
Thomas L. Yeh: The next question comes from Thomas.
Thomas L. Yeh: Morgan Stanley go ahead please.
Operator: Thanks. Yeah, just kind of an extension of the consumer price sensitivity question and more about its broader consumer health trends. I think you're a bit of a mix of regional attendance, maybe more so certainly than some of the destination parks that have voiced some consumer softening. Is there any evidence just in terms of your footprint more broadly around lower income versus higher income cohorts and how they've behaved over the last few months?
Thomas L. Yeh: Thanks, Yes, just kind of an extension on the consumer price sensitivity sensitivity question.
Operator: And more about broader consumer health trends.
Operator: A bit of a mix of regional attendance, maybe more so certainly than some of the destination parks that have voiced some consumer softening is there any evidence just in terms of your footprint more broadly around lower income versus higher income cohorts and how they behaved over the last few months.
Thomas L. Yeh: Well, as far as thinking about the health of the consumer, I mean, one of the things, there's a couple of things we look at, but one of them would certainly be in-park spending, right? So when you normalize for the impact of the Abu Dhabi revenue, we were up roughly 4% or 4% in the quarter. I think that's an indication that people are coming out to the parks and spending. And then I mentioned that in-park per cap was up in April as well.
Speaker Change: Well as far as I'm thinking about that.
Thomas L. Yeh: The health of the consumer I mean, one of the things.
Thomas L. Yeh: There's a couple of things we look at them one of them would be certainly the in park spending right. So when you normalize for the impact of the Abu Dhabi revenue, we were up roughly 4% or 4% in the quarter I think that that's an indication that people are coming out to the parks and spending and then I mentioned that in parts.
Thomas L. Yeh: Capital was up.
Thomas L. Yeh: In April as well so to me that's a good indication that people are spending.
Marc G. Swanson: So to me, that's a good indication. People are spending. Jim mentioned the deferred revenue being up at the end of April and the price increases we've been seeing on our past products. Again, I think that's another indication that at least the consumers coming to our parks are spending. Beyond that, we have some other indicators, like Discovery Cove; bookings are up, and group bookings are up meaningfully. So I think if we were seeing, you know, I'm not suggesting there aren't consumers who are impacted by, you know, economic issues. Based on where we sit, the folks coming to our park, you know, when we look at the aggregate numbers, we see positive trends there in most cases.
Marc G. Swanson: Jim Jim mentioned, the deferred revenue being up at the end of April and the price increases we've been seeing on our our past products.
Marc G. Swanson: That's another indication that at least the consumers coming to our parks are our spending.
Marc G. Swanson: Beyond that we have some other indicators discovery Cove.
Marc G. Swanson: Things are up group bookings are up meaningfully. So I think if we were seeing im not suggesting there is consumers who are impacted with with <unk>.
Marc G. Swanson: Economic issues, but.
Marc G. Swanson: Based on where we sit the folks coming to our park when we look at the aggregate numbers, we see we see positive.
Marc G. Swanson: Positive trends that are in most cases.
Thomas L. Yeh: Okay, that's helpful, Culler. On the cost front, do you have any additional comments on just the broader labor wage rate outlook? I think certain of your peers have flagged incremental pressure in certain areas or states. I don't know across your footprint if that's something that you're trying to offset, and certainly there are, you know, these cost efficiencies that you talked about, but from a broader, like, macro perspective, is that something that you're kind of fighting against this year?
Speaker Change: Okay. That's helpful color.
Thomas L. Yeh: Cost front.
Thomas L. Yeh: You have any.
Thomas L. Yeh: Color on just the broader labor wage rate outlook I think certain of your peers have flagged incremental pressure in certain areas or states I don't know across your footprint, if that's something that.
Thomas L. Yeh: You are kind of offsetting that certainly there are these cost efficiencies that you talked about but from.
Thomas L. Yeh: From a broader macro perspective is that something that you are kind of fighting against this year.
James W. Forrester: Thomas, it's Jim. I think, as we've said in previous quarters, we're very pleased with the way we've been able to handle our labor expense. This quarter was no different from the previous quarters, where we're actually down year over year in our labor rate. I think we've had a very successful focus on managing that labor expense through reductions in overtime, and the use of technology, and ensuring the right mix of support to our guests. We're actually improved overall from 2019 and 2023 by better metrics in our labor hours per guest required. So, I think, overall, we've shown an ability to control that cost pretty effectively.
Thomas L. Yeh: Thomas It's Jim I think as we've said in previous quarters, we're very pleased with the way we've been able to handle our flavor expense. This quarter was no different than the previous quarters, where were actually down year over year in our labor rate I think we've had a very successful focus.
Thomas L. Yeh: Okay, I appreciate it. Thank you so much.
Thomas L. Yeh: On managing that labor expenses through reductions in overtime uses of technology, ensuring the right mix of support to our guests. We're actually improved overall from 2019 and 2023 by better metrics in our labor hours per guests are required.
Thomas L. Yeh: So I think overall, we've shown an ability to control that cost pretty effectively.
Thomas L. Yeh: Okay. Appreciate it thank you so much.
Operator: The next question comes from Paul Golding.
Thomas L. Yeh: The next question comes from Paul Golding.
Paul Golding: <unk> of Macquarie go ahead. Please.
Paul Golding: Thanks so much. Just a couple on the group and international progress. First, just to clarify, in terms of mixed progression, sounds like the group is ahead of 23, and international is also ahead of 23, but still behind 19. Should we take away from that that the group is further ahead and ahead of 19 as well?
Paul Golding: Thanks, So much just a couple on the group and international progress.
Paul Golding: First just to clarify in terms of mix progression it sounds like.
Paul Golding: <unk> group is the head of 'twenty three and international is also ahead of 'twenty three but still behind 19 should we take away from that that group is <unk>.
Paul Golding: Further ahead and ahead of 19 as well and then a follow up to that thanks.
Marc G. Swanson: Thanks. Yeah, thanks, Paul. So, yeah, what you can, what I was trying to say there is that the group is up not only from last year but also up to 2019. So, so it is outpacing kind of international. International, you know, got better in Q1 of 24 and but is still down in 2019. So, yeah, the group is outpacing international. So as we see International come back, it sounds like there's more room to go in International than there is potentially to go in Group.
Speaker Change: Yeah. Thanks, Paul So what you can what I was trying to say there is a group group is up not only to last year.
Marc G. Swanson: But also up to 2019, so so group is outpacing kind of international International.
Marc G. Swanson: Got better in Q1 of 'twenty four.
Marc G. Swanson: But still is down to 2019.
Marc G. Swanson: Yeah Group as group is outpacing internationally.
Marc G. Swanson: So as.
Marc G. Swanson: We see international come back it sounds like there is more room to go in international than there is potentially to go and group how should we think about the per cap premium that you.
Marc G. Swanson: How should we think about the per-cap premium that you used to see maybe in 2019 on International relative to what we're seeing today, just as we think through the potential uplift or room to go in per-cap strength on that mix left to go in International? Thanks so much. Sure, I can help you with that question.
Speaker Change: You used to see maybe in 2019 on international relative to what we're seeing today, just as we think through the potential uplift or room to go in per cap strength on that that mix left to go in international thanks, So much.
Marc G. Swanson: Right.
Speaker Change: Sure I can help you with that question. It's a good one so remember back in 2019, we did about $2 3 million and international attendance. It was roughly 10% of our attendance back in 2019 as a company. So there.
Paul Golding: It's a good one. So remember, back in 2019, we did about 2.3 million in international attendance. It was roughly 10% of our attendance back then as a company. So there's a lot of runway still to get back to that.
Speaker Change: There is there's a lot of runway still to get back to that so in Q1 of.
Marc G. Swanson: So in Q1 of 24, we were still down roughly 35% from 2019 on international attendance. Now that's better than what we were down last year. Last year, we were down for the full year by about 44%. And so, it's moving in the right direction, but it gives you some sense of still being down a third of international attendance on when we used to do 2.3 million. It gives you a good sense of the size of... which some of them do obviously, you know, that per cap is going to be spread over multiple visits and would be less than a single day ticket.
Marc G. Swanson: 24, we were still down roughly.
Marc G. Swanson: Roughly 35% to 2019 on.
Marc G. Swanson: On international attendance now that's better than what we were down last year last year, we were down for the full year about 44% and and so it's moving in the right direction, but it gives you some sense of still being down a third of international attendance on you know when we used to do $2 million to $3 million. It gives you a good sense of the <unk>.
Marc G. Swanson: Size of potential.
Marc G. Swanson: <unk>. That's ahead, if we if we can recover international attendance and certainly that's our goal and we're putting efforts behind that so I think that that is an upside down the road when whenever that whenever that that does recover as far as your question on per cap.
Marc G. Swanson: International people oftentimes you know on a on a total visit basis.
Marc G. Swanson: You have to have more more spend in total it really depends on what kind of ticket they buy but if they buy a multi day ticket, which which some of them do obviously that per cap is gonna be spread.
Marc G. Swanson: Over over multiple visits and would be less than like a single day ticket. So it can it can have a mixed impact as I was talking about earlier I think in general.
Marc G. Swanson: So, it can have a mixed impact, as I was talking about earlier. I think, in general, you know, we're... pleased international is moving in the right direction. We need to get it back to 2019 levels, but it gives you some sense of the opportunity there which is meaningful.
Marc G. Swanson: We are.
Marc G. Swanson: We're pleased international is moving in the right direction, we need to get it back.
Marc G. Swanson: Back to 2019 levels, but it gives you some sense of of the opportunity there which is meaningful.
Speaker Change: Thanks, so much mark.
Operator: Our next question comes from Lizzie Dove of Goldman Sachs. Go ahead, please.
Marc G. Swanson: Our next question comes from Lizzie Dove of Goldman Sachs Go ahead. Please.
Elizabeth Dove: Hi there, good morning. Congratulations on a nice set of results.
Elizabeth Dove: Hi, good morning, Congrats on a nice set of results.
Elizabeth Dove: I feel like there's been more and more focus on Epic Universe coming next year. You know, they've put more and more marketing out there about it. I'm curious kind of what your base case is and how you feel about the setup there, whether it's from a pricing standpoint, whether you feel the need to maybe kind of invest more in the Orlando parks. Anything on those lines would be helpful.
Elizabeth Dove: Yes, it's been more and more focus on epic universe coming next year.
Elizabeth Dove: And more marketing out there about it I'm curious kind of what your base case is and how you feel about the setup that whether it's from a pricing standpoint, whether you feel the need to maybe kind of invest more in the Orlando Park.
Elizabeth Dove: Anything on those lines would be helpful.
Speaker Change: Yeah. Thanks, Olivier I can help you with that look on an epic.
Speaker Change: Look I don't have I don't have that crystal ball.
Marc G. Swanson: ball on how I think about EPIC, but generally, we view things, new things in the market that we expect will bring people to the market, as good for us and the industry as a whole. And here's why.
Elizabeth Dove: Think about epic that generally.
Marc G. Swanson: We view things new things in the market that we expect will bring people to the market.
Marc G. Swanson: It's good for us in the industry as a whole and here's why you got to remember.
Marc G. Swanson: You've got to remember, SeaWorld Orlando has been here for 50 years. It opened in the early 1970s. And if you think about the number of parks that have opened since SeaWorld opened 50 years ago, you've got more Disney parks, you've got more Universal parks, you've got Legoland, you've got – we added two parks, Aquatica and Discovery Cove. And over that time, SeaWorld, over the long term, grew to EBITDA and participated in that growth. So we like when more people come here. We have a differentiated product.
Marc G. Swanson: We've been Seaworld Orlando has been here for 50 years, you know it opened in the early 19 seventies and if you think about the number of parks that have opened since.
Marc G. Swanson: Seaworld opening 50 years ago, you've got more Disney parks, you've got more universal parks, you've got legal and you've got.
Marc G. Swanson: We added two parks of Kalydeco and discovery Cove and over that time.
Marc G. Swanson: Seaworld over that long term.
Marc G. Swanson: <unk> grew its EBITDA and participated in.
Marc G. Swanson: That growth of EBITDA to the market.
Marc G. Swanson: So we like when more people come here we.
Marc G. Swanson: Have a differentiated product.
Marc G. Swanson: We, I think, have a better value proposition for visiting our park relative to some of the competitors in town. We have our own unique rides and events and things to do that people do find a lot of enjoyment in. We also get, I would guess, more of our tenants than they do. I'm not for certain, but we get a lot of our tenants, obviously, from the state of Florida into our SeaWorld Orlando Park and Aquatica.
Marc G. Swanson: I think have a better value proposition for for visiting our part relative to some of the competitors in town and we have our own unique rides and events and things to do that you know people do find a lot of enjoyment in we also get.
Marc G. Swanson: I would guess more of our attendance than they do I'm not for certain but we get a lot of our tenants obviously from the state of Florida into our Seaworld Orlando Park in Aquatics.
Marc G. Swanson: Those are set-ups that we like that set-up going forward. We've competed here for certainly a long time. I'm not suggesting EPIC won't have an impact or anything like that. I'm sure there will be days where it's going to be very crowded, and we might feel it, but we like the set-up where we've been competing here for a long time. We like our product. We like our value proposition. We like what we have to offer, and I think we've demonstrated over a long history that we've competed well with a lot of new things coming to the market during that time.
Marc G. Swanson: So those are set upset that we've.
Marc G. Swanson: We like that setup going forward. We've competed here for certainly a long time now.
Marc G. Swanson: Suggesting epic won't have an impact or anything like that I'm sure there's going to be days, where are they going to be very crowded and we might feel it but we like the we like the setup of we've been competing here for a long time.
Marc G. Swanson: We like our product, we like our value proposition and we like what we have to offer and so I think we've demonstrated over a long history that we've competed well with a lot of new things coming to the market during that time.
Elizabeth Dove: Perfect, that's helpful. And then just one follow-up: on the buyback, you know, you made very solid progress there. I guess, like, in theory, if I look at the numbers, it feels like with the cash you have and the revolver, you could potentially finish that by the end of this year. So how do you evaluate, kind of, the pacing and capital allocation priorities of that versus, you know, the leveraging or capital investments or anything else, hotels, I guess, too?
Speaker Change: Okay. That's helpful. And then just one follow up on the buyback you made very solid progress.
Elizabeth Dove: In theory, if I look at the numbers it feels like with the cash you have on the revolver you could potentially finish that by the end of this year. So how do you evaluate kind of the pacing in tops allocation priorities of thought that says you know.
Elizabeth Dove: Deleveraging, all capital investments or anything else hotels like yesterday.
Speaker Change: Yeah. Thanks.
Marc G. Swanson: Look, I mean, um... We'll work with, like we always do, we'll work with the board on the use of cash. I mean, certainly, I think, to the extent the stock remains undervalued, like we believe it is, that would lean towards, you know, probably, you know, trying to do more of those buybacks, obviously, right? And we saw that with the shareholder vote that, you know, that was overwhelmingly approved.
Elizabeth Dove: Look I mean.
Speaker Change: We'll work with like we always do we'll work with the board on on the use of cash I mean, certainly I think to the extent the stock remains.
Marc G. Swanson: Undervalued like we believe it is.
Marc G. Swanson: That that that would lean towards.
Marc G. Swanson: Doing probably I'm trying to do more and more of those buybacks, obviously right and that we saw that with the shareholder vote that you know that was overwhelmingly approved so I think a lot of people recognize.
Elizabeth Dove: A lot of people recognize, investors recognize that the stock is undervalued. So the pacing will really just come down to, does it stay undervalued, and then how do we work with, you know, our team and the board to kind of navigate, like you said, the cash. But keep in mind that the business overall generates, you know, strong free cash flow. So you can model that out, it sounds like you kind of did, and we do have, you know, we are entering kind of the peak season here where we would generate more of our cash. So we'll keep you posted each quarter, but certainly, we recognize the stock is undervalued and certainly believe in the buyback. Great, thanks so much.
Marc G. Swanson: Our investors recognize that the stock is undervalued. So the patient will really just come down to does it stay undervalued and then and then how do we work with.
Elizabeth Dove: Our team and the board.
Elizabeth Dove: Navigate like you said, the the cash but keep in mind that the business overall generates strong free cash flow. So you can you can model that out it sounds like you're kind of a dead end and we do have.
Elizabeth Dove: We are entering kind of the peak season here, where we would we would generate more of our cash. So we'll keep you posted each quarter, but certainly.
Elizabeth Dove: We recognize the stock is undervalued and certainly believe in the buybacks.
Elizabeth Dove: Great. Thanks so much.
Speaker Change: Great. Thanks, so much.
Elizabeth Dove: Okay.
Marc G. Swanson: This concludes our question and answer session. I would like to turn the conference back over to Marc Swanson, CEO, for any closing remarks.
Speaker Change: This concludes our question and answer session.
Marc G. Swanson: I would like to turn the conference back over to Marc Swanson CEO for any closing remarks.
Marc G. Swanson: Yeah, thank you, Cindy. You know, on behalf of Jim and the rest of the management team at United Parks & Resorts, we want to thank you for joining us this morning. As you heard today, we are confident in our long-term strategy. Each meeting, we believe, will drive improved operating and financial results and long-term value for stakeholders. So, thank you for joining us. We look forward to speaking with you next quarter.
Marc G. Swanson: Yes. Thank you Cindy on behalf of Jim and the rest of the management team of United Parks and resorts, we want to thank you.
Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
Operator: For joining us this morning.
Operator: As you heard today, we are confident in our long term strategy.
Operator: Which we believe will drive improved operating and financial results and long term value for stakeholders. So thank you for joining we look forward to speaking with you next quarter.
Operator: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.