SeaWorld Postpones Dividend; To Incur Charges In Q4 On Job Cuts

(RTTNews) - SeaWorld Entertainment Inc (SEAS), the theme park and entertainment company, said in a regulatory filing on Tuesday that a recent restructuring measure involving about 300 job cuts would result in a restructuring charge of $12 million.

SeaWorld said $11 million of those charges is expected to be incurred in the fourth quarter of 2014 and another $1 million in the first half of 2015, due to certain continuing service obligations.

The restructuring charges do not include any costs related to the previously announced separation of the company's Chief Executive Officer and President effective January 15, 2015, SeaWorld said. The company expects to incur about $3 million of separation agreement costs in the fourth quarter of 2014.

Also SeaWorld xpects to incur about $3 million of additional depreciation expense in the fourth quarter of 2014 due in part to actions taken as part of the company's previously announced cost reduction initiatives.

On December 12, SeaWorld committed to a restructuring program in an effort to centralize some operations, reduce duplication of functions, increase efficiencies and accelerate execution. The restructuring is part of its previously announced company-wide cost initiative to deliver about $50 million of annual cost savings by the end of 2015.

The restructuring involved the elimination of about 300 positions across its eleven theme parks and its headquarters.

Also SeaWorld said its board elected to postpone the declaration of the fourth quarter 2014 dividend as its ability to declare dividends, repurchase shares or make certain other restricted payments under its debt covenants is limited to about $15 million for the remainder of calendar year 2014.

SeaWorld announced an amendment to its previously disclosed $250 million share repurchase program to accelerate the start date of such program from January 1, 2015 to December 17, 2014 and to authorize the repurchase of up to $15 million of its common stock during the remainder of calendar year 2014. The other features of the share repurchase program remain unchanged including the total amount authorized and available under the program of $250 million.

The amount available for dividend declarations, share repurchases and certain other restricted payments under the covenant restrictions in the company's debt agreements will reset on January 1, 2015 and SeaWorld expects to declare and pay the fourth quarter 2014 dividend in January 2015.

SeaWorld has been facing criticism from animal-rights activists and patrons about its treatment of animals, mainly killer whales. In November, SeaWorld said attendance at its locations fell 4.7 percent in the first nine months of 2014.

SEAS closed Tuesday at $15.43, down $0.12 or 0.77%, on a volume of 2.6 million shares on the NYSE.