Herschend Entertainment Co. LLC

Overview Key strengths Key risks Significant barriers to entry in the market due to the high cost of developing a theme park near a desirable population center. A high level of seasonality, which can magnify the effect of extreme weather events and unexpected sales missteps when they occur. Sufficient cash in hand to repay some debt and further reduce leverage through 2022. Reliance on consumer discretionary spending, which can be volatile over the economic cycle. Strong brand recognition at its Dollywood and Silver Dollar City parks. Small scale and limited geographic and cash flow diversity compared to other larger rated leisure operators. We believe that Herschend?s revenue growth will begin to moderate in 2023, with total revenues expected to increase

...We expect Herschend's revenues to remain substantially higher than prepandemic levels through 2023 supported by restored attendance levels and sustained elevated per capita spending at its theme parks: We believe that Herschend's revenue growth will begin to moderate in 2023, with total revenues expected to increase in the low single digit percent area, following two years of strong operating trends as the company recovered from the pandemic. We currently estimate that Herschend's revenues will increase 10%- 15% in 2022. Revenue in 2022 is supported by a full year of operations absent significant operating restrictions at its parks and a year in which demand was unimpaired by COVID-19 infection concerns. Additionally, theme parks broadly have benefitted from very high...

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