Parks! America, Inc. (PNK:PRKA) Q1 2024 Earnings Call Transcript

Parks! America, Inc. (PNK:PRKA) Q1 2024 Earnings Call Transcript February 14, 2024

Parks! America, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good afternoon, and welcome to the Parks! America Inc. Reports First Quarter Fiscal Year 2024 Financial Results Conference Call. [Operator Instructions]. As a reminder, today’s event is being recorded. At this time, I’d like to turn the floor over to Joe Dorame, Managing Partner at Lytham Partners. Please go ahead.

Joe Dorame: Good afternoon, and thank you for joining us today to review Parks! America’s financial results for the first quarter of fiscal 2024 quarter ended December 31, 2023. With us today on the call are Lisa Brady, Chief Executive Officer; and Todd White, Chief Financial Officer. Before we begin with prepared remarks, I would like to remind everyone certain statements made by the management team of Parks! America during this conference call constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Except for the statements of historical fact, this conference call may contain forward-looking statements that involve risks and uncertainties, some of which are detailed under risk factors and documents filed by the company with the Securities and Exchange Commission, including the annual report on Form 10-K for the year ended October 1, 2023.

Forward-looking statements speak only as of the date the statements were made. The company can give no assurance that such forward-looking statements will prove to be correct. Parks! America does not undertake and specifically disclaims any obligation to update any forward-looking statements except as required by law. Now I’d like to turn the call over to Lisa Brady, Chief Executive Officer of Parks! America. Lisa?

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Lisa Brady: Thanks, Joe, and good afternoon, everyone. We appreciate you taking the time today to be on this call. Before I jump into operational performance for the quarter, I would like to give a quick overview of the company as this is our first quarterly earnings call. Parks! America is a regional owner and operator of 3 wild animal safari parks. We are a destination for family entertainment, offering some of the nation’s best drive through wild animal safari parks. Our park’s signature attraction is a multiple mile drive through safari experience where guests have the opportunity to feed more than 500 animals, including hoof stocks such as zebras, water buffalo, elk, and numerous species of antelope and deer from around the world.

Guests can experience the drive thru as part of guided tour, rent one of our safari vans, or drive their own vehicle. All three parks have a walkabout adventure zoo where animals such as sloths, lemurs, kangaroos and more are on display in a traditional zoo like setting. All three parks also have a retail gift shop, and Georgia and Missouri have a restaurant as well. Our parks appeal to families and guests of all ages and are an affordable unique experience. The three parks are located in Pine Mountain, Georgia, which is about an hour south of Atlanta, in Stratford, Missouri, about 45 minutes north of Branson, and in College Station, Texas located within approximately 2 hours of Houston, Austin and Dallas. The company owns more than 900 Acres of Land.

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Q&A Session

Now, let’s review our operational performance. Our first quarter financial results reflected quarter the typical seasonality of our business. It is historically the weakest quarter of the year of our fiscal year. Parks! revenues for the quarter were down approximately 0.5%. Difficult weather conditions, particularly during key holiday and weekend periods at our Georgia Park resulted in a 6.1% revenue decrease. Our Georgia Park is our largest revenue generating property. However, we expect that the Parks will have more normalized customer traffic numbers as the weather improves in the coming quarter. We did experience stronger results at our Missouri and Texas parks, where revenues increased 2.1% and 21.6%, respectively. We are pleased to be gaining traction in Texas and believe our marketing efforts to build the brand are paying off.

As a reminder, the Texas park was opened in 2019 and was purchased by parks in 2020. So awareness still remains fairly low, which represents a huge opportunity for growth for the Parks. In Missouri, we were encouraged with the modest growth in 2024, particularly as it follows a strong first quarter in 2023 as we lap the impact of our updated pricing strategy in order to remain competitive with our local competition. Overall, it is important to note that Q1 2024 revenues remained well above the 2019 pre-pandemic levels. Results for the quarter were also impacted by the initiation of a proxy matter by a dissident group of shareholders that drove increased professional fees and expenses during the first quarter of 2024. Given the challenges we faced during the quarter, we are reasonably pleased with the financial and operating results.

In 2024 and in the coming years, we will be investing to update our Parks assets and amenities. Many of which had gone lacking in the past decade under previous leadership. We look to improve and update the physical plan of our properties, create new attractions on accessible land around our properties, and improve overall guest experiences. Working with the local management teams at our Parks, we are transforming our workforce culture to focus on operational efficiencies, improving overall guest experience and customer satisfaction. We are pleased with the progress that has been made to this point, and we expect our efforts to generate new and repeat customers while providing more consistent financial performance in the quarters years to come.

Turning to our capital allocation. Our 2024 CapEx plans include the following. At our Georgia Park, construction of a new main entry Plaza and brand-new restroom facility, an all-new carnivore night house, a capybara feeding experience, and continued sidewalk fencing and shade replacements. At our Missouri park, a rebuild of the park dock, which will allow guests more access to the waterfront, an all-new nature walkway around the pond and a rebuild of the park dock and fish feeding experience, and continued improvement of our walkabout experience. At our Texas park, build out of our zookeeper facilities along with covered storage and other maintenance and safety Jex. In terms of attracting new customers, we are transitioning our advertising and marketing strategy to a more proactive digital call to action campaign.

We believe our parks represent outstanding educational entertainment and employment opportunities in the communities in which we are located. And we are heavily focused on developing community relationships with all of our stakeholders, which we will believe will drive additional awareness, group business and partnership opportunities. From a marketing perspective, we are running highly targeted digital campaigns, offering relevant seasonal promotions and products, and continuing to refine our organic social media efforts, all of which we believe will generate expanded awareness to generate new and repeat customer traffic. We are now offering annual memberships to create more affordable multiple visits for families throughout the year, and are instituting dynamic pricing in certain peak periods of the year to enhance revenue generation.

During the first quarter, we ran a 6-week special on annual memberships from Thanksgiving to New Year’s Day and generated a nearly ninefold increase in new memberships during the quarter. Although starting from a low base, we are encouraged by this early traction. While there is still work to do to improve our operations, we remain dedicated to ensuring our guests have an amazing experience and leave the park wanting to come back again. Now, let me turn the call over to Todd White, our Chief Financial Officer for a review of the numbers. Todd?

Todd White: Thank you, Lisa. I would also like to thank everyone for taking the time to participate in today’s call. Let me start with our first fiscal quarter of 2024 statement of operations. Total revenue for the first quarter of 2024 was $1.9 million an increase of 2% or approximately $36,000. Parks! revenues decreased by $8,000 to $1.82 million. Animal sales during the quarter were $88,000 a little more than double the prior year first quarter. Our animal sales are influenced by a variety of factors, causing the timing to vary from quarter-to-quarter. On a combined basis, total attendance increased 9% during the quarter. As those of you who have followed our business for a while are aware, there’s a seasonality to our business.

Since the acquisition of our Texas park in late April 2020, approximately 40% of our annual Parks! revenues have occurred during the first half of our fiscal year with approximately 60% occurring during the second half of our fiscal year. Revenues for our Georgia Park decreased 7.4% to $1.24 million or approximately 65% of total revenue for the first quarter of 2024, compared to $1.34 million or approximately 72% of total revenue in the first quarter of our fiscal 2023. We believe our Georgia Park 2024 First Park revenues and attendance we’re negatively impacted by unfavorable weather conditions during key periods in November and December 2023. Paid attendance at our Georgia Park for the quarter was essentially flat. Our Missouri Park revenues increased 10% to $241,000 representing approximately 13% of total revenue for the first quarter, compared to $219,000 or approximately 12% of total revenue for the first quarter of 2023.