SEAS (2021 - Q1)

Good day and welcome to the SeaWorld First Quarter 2021 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions]. Please note this event is being recorded. I'd like to now turn the conference over to Matthew Stroud, Vice President of Investor Relations. Please go ahead. Matthew

Thank you, and good morning, everyone. Welcome to SeaWorld's first quarter earnings conference call. Today's call is being webcast and recorded. A press release was issued this morning and is available on our Investor Relations website at www.seaworldinvestors.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 Elizabeth Gulacsy, Chief Financial Officer and Treasurer. This morning, we will review our first quarter financial results. And then we will open up 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 the 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 Securities 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 statements. In addition, on the call, we may reference non-GAAP financial measures and other financial metrics, such as adjusted EBITDA, free cash flow, adjusted free cash flow, net cash burn and adjusted net cash flow which are non-GAAP financial measures and metrics. 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'd like to turn the call over to our Chief Executive Officer, Marc Swanson. Marc?

Thank you, Matthew. Good morning, everyone, and thank you for joining us. This morning prior to our earnings release, we announced that I have been appointed as CEO of the company, and Elizabeth will serve as CFO effective immediately. We're thrilled to be taken on these new roles on a permanent basis. Over the past several years, together with our board, management team and our dedicated ambassadors, we have worked tirelessly to execute on the strategic initiatives we have been working on and implementing. We're proud of these accomplishments and are excited about what the future holds for this dynamic company. With that, let me turn to our earnings release. I'm pleased to report that we saw continued improvement in our top-line in both attendance trends and total revenue per capita and in our bottom line in adjusted EBITDA in the first quarter. And I'm extremely proud that we not only generated positive adjusted net cash flow during the quarter, but we achieved higher adjusted EBITDA in the first quarter compared to the first quarter of 2019. The success of the strategic pricing, marketing, cost and capital investment initiatives that we developed and had been refining prior to the onset of the COVID-19 pandemic, combined with the strategies we developed, and actions we have taken during the COVID-19 pandemic period helped us deliver these results. We're excited to have experienced a robust Spring Break season across our parks, including several days where our parks reach capacity limitations for the current operating environment. Had it not been for capacity limitations and our forced closures, we believe, our attendance would have been notably higher in the quarter. We're encouraged by our guests desire to visit and spend at our parks and believe this is a good indicator for expected demand for our peak summer season. We began the first quarter with seven of our 12 parks open, all with capacity limitations and modified and/or limited operations, which compares to eight of the 12 parks opened in the prior-year. The one park that was closed at the beginning of this year that was opened in the prior year was our SeaWorld Park in California. We finished the quarter with 10 of our 12 parks open which is consistent with the same period in 2019. As a reminder, we temporarily closed all of our parks on March 16, 2020, in response to the COVID-19 pandemic. We expect all of our parks will be open for the peak 2021 summer season, subject to local, state, and federal guidelines related to COVID-19. While attendance in the first quarter, was significantly impacted by the COVID-19 factors, recent monthly attendance improved compared to the same period in 2019. Relative to 2019, monthly attendance excluding the company's parks in Virginia, California, and Pennsylvania, which each were subject to significant capacity and/or operating restrictions during the quarter was down 37% in January, down 39% in February, and down 18% in March. The improving trend continued into the second quarter, with monthly attendance down 15% in April, on the same basis. Let me provide you with a quick update on capacity limitations for Virginia and California. On April 1, we were able to increase capacity for our Busch Gardens Williamsburg Park to approximately 13,000 guests, based on revised guidance for the State of Virginia. And on April 12, SeaWorld San Diego resumed theme park operations with limited capacity in accordance with the State of California guidelines for theme parks. As mentioned last quarter, we have also implemented new operating calendars across several of our parks in 2021 based on learnings over the past 12 months. In particular, we began year-round operations at SeaWorld San Antonio, Busch Gardens Williamsburg, and at Sesame Place. These parks were open primarily on weekends and holidays, weather permitting in advance of their traditional operating seasons. We're pleased with this strategic decision and our ability to profitably add operating days and operate more of our parks year-round. With this change, we now have year-round operations at eight of our 12 parks. Only our water parks in San Diego, San Antonio, Tampa, and Williamsburg are not open year-round. Turning to our financial performance, we saw continued strong total revenue per capita growth in the first quarter relative to the prior-year in both admissions and in-park spending. Our pricing and product strategies are clearly working, and our guests are spending more when they visit our parks. We've seen good success with our dynamic pricing initiatives and our first quarter events, including new or expanded food, beverage, and music event days at some of our parks, as well as several new or reimagined venues we launched during the quarter, helping contribute to the increased guest spending. On the merchandize side, we have refreshed our retail offerings by adding new products and improving the product mix, which is added to the increased guests spending. While this continues to be an unprecedented and challenging time for our company and industry, it's been encouraging to see our performance improve and assuring to see our guests visiting our parks over the last few months. With a sharp increase in visitation, we have been adding staff as quickly as possible. But like other companies have experienced, there have been challenges in hiring seasonal personnel, especially during the Spring break period in late March and April. With the widespread distribution of COVID-19 vaccines and increasing immunization rates of the public, we believe guests are more willing to get outside travel and visit our parks again. We're starting the peak summer season in a few short weeks where we're planning to have even more events and open all our parks including our water parks in Williamsburg, in San Diego, which were both closed all of 2020. We're optimistic about the upcoming summer season and we expect that our parks will return to a more normalized operating environment as the year progresses. Our teams have worked hard to better position this company for revenue growth, and increased profitability. As we have demonstrated in the first quarter, we believe, the strategies we've been working on, and refining over the past few years, along with the actions we have taken throughout the past year will continue to lead to significantly improved financial results for the company. With that, I'd like to turn the call over to Elizabeth to discuss our financial results in more detail. Elizabeth?

Thank you, Marc, and good morning, everyone. Before we view our financial results, I just wanted to take a moment to express my excitement about becoming the permanent CFO; I look forward to continue working with Marc, our management team and our board to fully capitalize on the significant opportunities ahead. Now let's review our financial results for the quarter. As you know, we normally discuss our results for each quarter in comparison to the prior year's quarter. Given the disruption we experienced in 2020, when we temporarily closed all of our parks on March 16th, we believe a comparison of our results to the first quarter of 2019, provides a more meaningful insight on our performance and operating trajectory. As such, I'll provide commentary around our financial results compared to the first quarter of 2019. For those interested, we provide a comparison versus both 2019 and 2020 in our earnings release, and will do so as well in our Form 10-Q which we plan to file tomorrow. Our business continues to be impacted by the COVID-19 pandemic. However, we have seen continued improvement in our results during the first quarter of 2021. During the quarter, we generated revenue of $171.9 million, a decline of $48.7 million, or 22.1% when compared to the first quarter of 2019. The decrease in revenue is primarily due to a decline in attendance of 33.7% partially offset by an increase in total revenue per capita of 17.6%. When compared to the first quarter of 2019, attendance declined primarily due to COVID-19 related impacts, including capacity limitations, and modified and/or limited operations at all of our open parks. First quarter, total revenue per capita was $77.63 compared to $66.04 in the first quarter of 2019, an increase of 17.6% driven by improvements in both admissions per capita and in part per capita spending. Admissions per capita increased by 12% to $43.25 and in part per capita spending increased by 25.3% to $34.38 in the first quarter of 2021 compared to the first quarter of 2019. The increase in admissions per capita primarily relates to the realization of higher prices in our admission products, resulting from our strategic pricing efforts. In part, per capita spending increased primarily due to increased guest spending, and improved product mix, and higher realized prices and fees during the quarter. We generated a net loss of $44.9 million, compared to a net loss of $37 million in the first quarter of 2019. We generated positive adjusted EBITA for the first quarter of 2021 of $25.2 million, an increase of $8.8 million, or 53.4% when compared to the first quarter of 2019. The improvement in adjusted EBITDA resulted primarily from the combination of increased total revenue per capita, as well as a successful execution of our expense reduction efforts, which together offset the decline in attendance that occurred as a result of the impact of COVID-19. Our expense reductions primarily related to a reduction in labor costs, marketing-related costs, and other operating costs, resulting from structural cost savings initiatives and the impact of COVID-19 modified and/or limited operations. Now turning to our balance sheet, our current deferred revenue balance as of the end of the first quarter was $193.4 million, an increase of approximately 27.8% from March of 2019, and an increase of 60.6% from March of 2020. We're very encouraged with what we're seeing in our pass base. Our pass base grew approximately 21% between the fourth quarter and April, in part due to strong sales over the Spring break period. At the end of April 2021, our pass base was only down approximately 3% compared to April of 2019 and is at approximately 82% of the peak pass base we had in 2019 with our biggest tax selling season yet to come. We're also seeing a higher mix of premium passes in our pass base, as our pass holders continue to recognize the value and benefits of our higher tiered products. Additionally, we continue to see the impact of our pricing strategy taking hold, with stronger realized prices on our pass sales versus 2019 and 2020. As of March 31, 2021, our cash and cash equivalents balance was approximately $431 million, which click our total liquidity including our available revolver capacity at approximately $743 million as of March 31, 2021. We generated a monthly average of approximately $5.1 million of adjusted net cash flow, which excludes certain vendor payments we previously deferred in order to manage liquidity. Including these deferred vendor payments, we estimate the average monthly net cash burn during first quarter was approximately $1.1 million per month. We expect to be comfortably cash positive over the remainder of the year. We spent $15.3 million on CapEx in the first quarter of 2021, of which approximately $10.9 million was on core CapEx, and approximately $4.4 million was on expansion and ROI type projects. As we have previously discussed, we'll spend opportunistically on non-core expansions and ROI CapEx when we find opportunities that meet our return hurdles, including on new parks and expansions, like our Sesame Place Park in California, incremental revenue enhancing projects, cost reducing projects, and other similar opportunities. For 2021, depending on the pace of the recovery from the COVID-19 impact, we plan our spending between $120 million and $150 million on capital expenditures. Now, let me turn the call back over to Marc who will share some final thoughts. Marc?

Thank you, Elizabeth. Before we open the call to your questions, I have some closing comments. In the first quarter, we participated in over 530 rescues and have exceeded 38,600 animal rescues over the company's history. We're very proud to be one of the world's leading animal rescue organizations. And we're proud of our efforts to protect and save wildlife. I want to thank our employee ambassadors for their continued dedication and effort to welcome our guests, while operating in our parks in accordance with the latest health and safety protocols. We have an outstanding line-up of summer events, including the return of guest favorites, such as Electric Ocean at our SeaWorld Parks and Summer Nights at our Busch Gardens Parks. There will also the Craft Beer and cultural festivals, as well as Sesame Street kids' weekend at several of our parks. We believe there's something for everyone to enjoy the summer in our parks. As before, we're focused on providing a safe and fun guest experience while continuing to offer innovative special events and creating new events for our guests to enjoy our parks, while still complying with established health and safety guidelines. We're successfully navigating through this extraordinary environment and we're confident we're emerging an even stronger and more profitable enterprise. We continue to have high confidence in our long-term strategy, and then our ability to deliver significantly improved operating and financial results that will lead to meaningfully increased value for stakeholders. Now let's open it up to take your questions.

We will now begin the question-and-answer session. [Operator Instructions]. The first question comes from Steve Wieczynski from Stifel.

Hey guys, good morning. Congratulations, first of all to you both on your new titles today. But when I go back to your presentation that you put out last quarter around the EBITDA potential, for this company down the road and I guess, first of all, I want to make sure that what you put out there last quarter is still fair. But I guess my real question is, around the attendance metrics that you were incorporating at that point in those assumptions, I understand that the per caps can move around, and you don't have certain costs embedded in there. But when we look at, assuming a flattish attendance versus 2019, given what you're seeing right now, plus with more operating days and events, is it fair to assume that that assumption around the attendance component there is? I mean, it's probably going to be very low when it's all said and done.

Yes, hey, Steve. Thanks for the comment and the question. So, look, what I'll tell you that that illustration that we put out last quarter, we still obviously feel good about that illustration, we still think it makes sense for where the business is headed. And clearly, you can see for example, on the total revenue per caps, we're doing well there, our margin expansion clearly showing the efforts on cost. As far as attendance, yes, we -- what I think is implied there is we showed you the 2019 attendance level, certainly our goal is to do better than that. And I think with the things you've mentioned events being open year-round at more of our parks, all those things, I think are going to be good things for us. So I do think, certainly we can do better. But for the purposes of illustration, we just showed you what it would look like in our mind or the earning potential of the business, if you will, based on just reaching 2019 levels. But obviously, we would look to overachieve on the attendance obviously.

Okay, got you. And the second question would be around the labor side of things; we've seen a lot of your peers talk about, the labor pool at this point, and how tight it is and how expensive it's certainly getting. So I guess the question is, how -- what are you seeing out there in terms of labor front and how are you trying to balance the amount of labor, you're putting in the parks these days versus not impacting the customer experience?

Yes. So look, Steve, what I'll tell you is, couple of things. One is, we have certainly inflationary pressures and wage pressures and things like that, going back over the history of the company, and just like everybody else, I think we are seeing that. Having said that, we have a lot of confidence in our ability to drive the other cost savings we've talked about, we have efforts around automation, technology improvements, things like that. Obviously, our goal is to get expense and wage pressures and cost pressures, that type of thing to a more normalized kind of inflationary level, and then look for other savings as well. We know that's, if we can do that, and then obviously grow our attendance and revenue, that's a good recipe. I think the other thing we're seeing is obviously, we are getting pricing power, and we feel good about that. So to the extent there's outsized pressures and on other costs or certain costs, we feel good about our ability to offset some of that with price, obviously. Look, as far as your second question about impacting guest experience, I mean look our goal is to obviously provide a very good guest experience. And we know certainly at times around spring break, it wasn't up to what we would expect. And we're working hard and in fact to improve that and in fact, we just last week, had our best three day hiring event in the history of our company. So I'm optimistic we're headed in the right direction, and we're going to be in much better shape, obviously, especially as we approach the summer. And finally, we also know when the parks get a little bit at capacity or close to capacity. We know there's some friction with some of the COVID protocols around stadium capacity and things like that, those types of things, those protocols are changing right now and will change I think going and we would expect some of those to change going forward in such a way that it creates a more positive guest experience. But certainly we're working on that, we got to continue to do better forecasting and all that. But I'm optimistic; we're headed in the right direction.

The next question comes from Michael Swartz of SunTrust Robinson Humphrey.

Hey everyone, good morning and then congrats, Marc and Elizabeth, both great news. Just wanted to touch on some of the capacity comments, and limitations that you faced during the quarter, could you maybe give us a little more context of maybe what attendance would have looked like? Or maybe how much attendance you lost due to parks where you had those capacity limitations?

Yes, hey Michael, it's Marc. I can take that question. So look, I think I said in the remarks that it was notable. So let me give you maybe some more insight on that. But if you look at like, especially weekends like Saturdays, I mean we're hitting capacity on a number of days, but you want to kind of have a specific example, if you take a park like California or something, where they might have done 21,000, 22,000, 23,000 in attendance, on a weekend, in March of this year, they can only do, maybe 10,000, you start to multiply that over multiple weekends. And you can see that there's a pretty big delta there that would grow. And that's just one park, right? So that would apply, if you look at Williamsburg as well, where there's a pretty hard cap on attendance, again, on some of their Saturdays, they're going to do well into the 20,000 range when now their cap is much lower than that. So that's, hopefully gives you some color. I would say, we would also see a similar dynamic at some of our parks in Florida, obviously, where we have we had such demand that we hit capacity. So it's a notable limitation for us. And I think, as you know, one of the things that gets us excited is as those limitations, we expect those to eventually kind of moderate over time, that would certainly would be a good thing for us.

Okay, great. Thanks for that color. And then just a second question here on typically in your EBITDA breakout in your press release, you have an add-back for I think anticipated cost savings, and seeing that zero this time, and I know you've talked about $50 million in fixed cost savings over the next 12 months, for that EBITDA bridge you gave us last quarter, so maybe help reconcile those two?

Yes, let me start and then I'll let Elizabeth kind of give you a more technical answer on how the credit agreement works. But I think the key takeaway is that, we have a lot of confidence in our cost savings plan. We laid out last quarter as an illustration of the earning power of this business with the cost efficiencies that we've identified. And we still stand by that, we're making progress by that. I would point you to the margin improvements, you saw Q1 of 2021, we did a margin of about 14.66%, Q1 of 2019, we hit a margin of 7.43% roughly in that range. So we basically more than doubled the margin. And certainly a lot of that is due to per capita growth. And a lot of that is obviously due to the expense efficiencies that we've identified. So, Elizabeth, you want to talk about that credit agreement?

Yes, that's a great question. Let me just clarify for you. Thank you for asking that. Our adjusted EBITDA table, we're reporting adjusted EBITDA in accordance with the definitions within our credit agreement. If you look at the footnote in our press release, right next to that line item, it explained that we do have a limitation on how much we can add-back for estimated cost savings and that is up to 25% of LTM adjusted EBITDA. So because our LTM adjusted EBITDA is still a negative number per credit agreement, we really can't add anything back into that line, if that makes sense. But once we start going into the positive territory, then you'll see that line items come back.

The next question comes from Paul Golding of Macquarie.

Great, thanks so much. Congrats to both of you on the new titles and congrats on the quarter. I wanted to ask around per caps here, we saw the 17% jump in total per caps, I guess is there any commentary you can give around where you think this can go? I mean the jumps have been substantial; your revenue management has obviously come through in a great way. Just looking to see what we can expect as far as any tapering or how you see that evolving?

Yes, hey, Paul, it's Marc. I can take that question. Look we've been, you've heard me talk for a few years now about all the work we're doing around pricing, communications, promotional effectiveness, our event line-up, our capital line-up, all those things. And so we're clearly benefiting from those, the work we've done over the last few years, we're clearly benefiting from that, we ramped up even more the revenue management group. So we have people every day, looking at our pricing, our tickets, our effectiveness, what's selling, what's not, all those things and being smart about how we react to those things, we're getting more dynamically priced, for example, as well. So I have a lot of confidence that when you look at kind of the long-term nature of this business, you've heard us talk about this before, we feel very confident being able to grow our per caps, at least on an inflationary basis, on a go-forward basis. But there's going to be quarters where I think we can, we can do better than that. And certainly, that's going to be around better events, new venues, in our parks, we've done a number of things with new venues in our park, that just get more compelling reasons for people to come and visit and spend, better product mix, upgrading of products. So when we do those types of things that's where we see the outsized performance that you're kind of seeing now. And then also, what I would leave you with is, we're doing this without the benefit of a CRM, I talked about this a little bit last quarter, we're in the very, very early stages of that process. And so again, I think that's something else that could be meaningful, to per caps down the road. And then also, we're just getting ready to start beta testing a new in part mobile app. And again, I think that could be again, another driver of maybe higher than inflationary growth, obviously in our per caps. So we're excited about things like that. We're excited about all the execution we're doing here on pricing and emissions and in part per caps.

That's great. And then a follow-up around the capped park dynamic. Could you give some color around how you manage sort of turning people away, presumably, you hit the cap, and you don't perfectly hit the cap there, there's some overflow. And so I'm curious as to how you're managing that process with the customer. And whether there's any, any pricing incentive that maybe has to be factored in the future periods, just generally, how that's being managed?

Yes. So there's a couple of things there and I got to give a lot of credit to our guys who run our parks obviously, but we have a reservation system, obviously, that gives us visibility into what days are going to look like, but still we know that there's people who may show up not realizing they need one. And if we have room, we try to accommodate them, obviously. But what I will tell you too is, if we are able to like to your point, there's a capacity limit that occurs at different points throughout the day, so you kind of generally have your peak people in park generally like kind of midafternoon. So what we've tried to do is, if we have to close down for a little bit, we try to make note of it on social media at times, or let people know like, look we think it might be an hour or two, and then enough, enough people who maybe came early in the morning will exit and we can let you in. So I think the key there in a lot of ways is just being upfront with the communication. And certainly I think in most cases, if people, if you're clear with kind of what's going on, people appreciate that. Our goal obviously is, we want to see people have a fun day at our parks. We don't want them to be disappointed by not being able to get in but obviously, we got to balance that with the capacity that you just talked about.

The next question comes from Tyler Batory of Janney Capital Markets.

Good morning. This is Jonathan on for Tyler. Thank you for taking my questions and congrats on the quarter. I wanted to reiterate that congratulations to you too, as well. So you highlighted in the prepared remarks the pass sales, but wondering if you could provide some more color on that and how the spring selling season has been compared to expectations and just curious if there's been any noticeable pick-up there as attendance has ramped?

Yes, hey Jonathan, it's Marc. I can give you some comments and then if Elizabeth wants to add anything she can. Well, you've heard us say for some time that we really believe strongly in our pass program. And I think it's a really good indicator, as you heard from Elizabeth, that we're down only 3% to where we were at this time in 2019. So that base of people who have a product is only down 3% to 2019. That is a very good indicator of the demand for our parks, the great events, the great line-up of rides we have, the shows, all those things, the reasons, the festivals, the reasons to come visit our park. And I think we offer a tremendous value with our pass program as well. So we're going to continue to focus on that, especially with the key kind of summer selling season ahead of us. And we're optimistic about that, so.

Yes, thanks Marc, I would just add to that, just to give you a little more color, as we look at our pass sales, they accelerated throughout the quarter, and especially as we went into the spring break period. So pass sales, when we look at both March and April exceeded sales volumes that we had in March and April of 2019. So obviously, that is a really strong metric. And it gives us a lot of encouragement, as we look ahead to as Marc said, the busy summer season, which is actually a bigger selling season for us. But I'd also note our pricing is outpacing prior year as well, how it peaked in 2019 and 2020, so obviously a good combination of both of those factors being positive.

Okay, great. I appreciate all that color. And then just a clarification question from me, if I could, the CapEx spend for the year was up to $120 million to $150 million if I heard that correctly. And when we spoke last February, I believe it was $100 million to $150 million. Is the delta there simply due to the strength seen over the quarter?

I think what we're trying to do is just kind of refine that a little bit more for you. But obviously, with the spreads we're seeing in the quarter, we're able to provide you a little bit tighter of a range there. And that I should preface as I said in my prepared remarks is going to be dependent on our strategies as we go forward. But for now, the $120 million to $150 million, I think is a tighter range for you to use for your modeling purposes.

The next question comes from James Hardiman from Wedbush.

Hi, this is Sean Wagner on for James. Given current travel trends favoring domestic versus international travel, what can you tell us about them? It's a business from local long range domestic and international visitors, when you compare it to kind of 2019 or a typical year?

Yes, hey Sean, it's Marc. I can take that question. So, when we look across the company in total, the -- we kind of have that five categories of attendance, but local attendance is up slightly, obviously compared to Q1 of 2019. We have really no international attendance, very, very small amount. And then what's good is our other kind of three categories, same day, driving overnight, and domestic, those are people generally driving into our parks and whatnot. Those are up. Those are up as a category. So they're offsetting some of the decline in international and local, it's helping as well. So we like the mix. I think it's a good mix. And I think what's encouraging to us is, as we return to a more maybe normalized pattern over time, we get international isn't a huge amount of attendance for us about 10%. But that'll be I think a tailwind, right because those folks when they do start to travel again, generally are some of our bigger spenders in the park. So we're excited when that does happen.

Okay, thank you. So it seems like the growth in domestic travelers is not quite completely offsetting the velocity of international travelers, so particularly in the Orlando market, I guess with maybe some of your competitors focusing on these domestic attendees a little more than they had in the past. And that's always that’s been kind of a focus of yours in recent years, is there enough to go around there? Do you think the general attendance kind of potential at those parks is kind of capped until that international picks up?

Yes, hey, so Sean let me clarify because I want to make sure you understood. The local is up just a little bit. So the other U.S. categories are up. They're up and they are offsetting a large part of that international decline. So we do feel good about the people coming, choosing to drive in to our parks and visit that are non-local. So, I think that'll only continue. We feel good about our line-up, our products or all the things we offer.

The next question comes from Ben Chaiken of Credit Suisse.

Hey, how's it going? Just on the labor side, I'm sorry, if I missed this. How much is the J-1 Visa program, typically part of you seasonal labor? I'm asking just because I think that was recently reinstated if I'm not mistaken. And then that's one and then two just thoughts on, how the thoughts on future unit growth leveraging the Sesame Place brand, it seems pretty unique?

Yes, hey Ben, it’s Marc. What I can tell you on the J-1 Visa, I mean we don't rely very heavily at all on that we have one location on the East Coast that does rely partially on that program. But we feel we're in a really good spot. We don't have a high reliance on that program maybe a couple of hundred students in that range, maybe a little more, but feel really good about our ability to hire without that, obviously. And then, you've heard me mention your second question on Sesame. We have, we're excited to be currently building the second Sesame Place Park in San Diego and opening that here in 2022. And as far as Future Parks, we think it's a great brand. We have that brand pretty much in all our other parks, even our non-water parks. And we have Sesame Land. So we're going to obviously continue to evaluate that, we think that's a great brand. And certainly, we believe there's going to be opportunities for more parks down the road. But we're most focused on right now is getting the second one opened at San Diego.

Got you. And just not to go too far down that path. But if you could make some more sense to conversions like you're doing in California or do you think it makes more sense to maybe pick-up some via M&As and what some, I don't know water parks, and then convert them. Just how do you think about that?

Yes, I think we're open to multiple scenarios, but certainly like what we're doing in San Diego is a conversion of one of our own parks. But certainly that's a little more, probably a little quicker to do. But I want to say that we're against either a Greenfield or anything like that, either. So we're focused on, what's the right location? What's the right venue, whether that's buying something and converting or building from new, so.

This concludes our question-and-answer session. I'd like to turn the conference back over to Marc Swanson, CEO, for any closing remarks.

Hey, thank you, Jared, and thanks everybody for joining. On behalf of Elizabeth and the rest of the management team here at SeaWorld Parks Entertainment, we want to again thank you for joining this morning. As you've heard today, we're confident in our business and strategy and sincerely look forward to resuming a more normalized operations which will drive improved operating financial results and long-term value for stakeholders. So thank you again, and we look forward to speaking with you next quarter.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.