Like Six Flags and Cedar Fair, SeaWorld is borrowing more money as it looks to raise enough cash to ride out the closure of its theme parks. The company has announced the sale of an additional $227.5 million in senior secured notes as part of its broader financial response to the pandemic.
"The increase in our revolving credit facility that we secured on March 10th, the amendment to our revolving credit facility that we announced today and the expected proceeds from the notes offering that we also announced today, will provide us with significant financial flexibility and liquidity to operate in this unprecedented and highly uncertain environment," SeaWorld Entertainment interim CEO Marc Swanson said.
The company estimates that it will burn an average of around $25 million a month while its parks are closed. That puts SeaWorld on the low end of the cash burn rates reported by its competitors, with Cedar Fair reporting $25-35 million per month> and Six Flags $30-$35 million per month. Of course, SeaWorld operates fewer parks than either of its rivals, with just six land parks compared with Cedar Fair's 11 and Six Flags' 15. But SeaWorld also has its animals that require constant feeding and care, even when the parks are closed to the public.
Nearly all of the company's employees have been furloughed since last month, with only a few executives, managers, and animal care specialists staying on the payroll. However, the company's top executives went ahead and gave themselves $6.8 million in stock options, more than making up for the 20 percent cuts in their base pay that the company announced as part of its cost-cutting. In addition to furloughing 95 percent of its employees, SeaWorld also has cut or deferred all planned capital spending from last month on and eliminated all of its advertising spending.
SeaWorld had been having a good year before its park shut down in March. The company reported today that its attendance was up nine percent over the previous year for the first two months of 2020, to a record 1.9 million visitors. SeaWorld San Antonio had just opened its new GCI coaster, while the chain's four largest theme parks each were preparing to launch their own new coasters within the next month or so, which should have boosted attendance further. As of now, the parks are closed until further notice.Tweet
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