SeaWorld Entertainment (NYSE:SEAS) announced a restructuring plan and layoffs as part of its cost-saving initiative. As of January 15, 2015, Chairman David D'Alessandro will serve as interim CEO until a replacement for the current CEO, Jim Atchison is found. Jim will smoothen the transition and serve as a consultant to the company.
Chairman David D'Alessandro said:
"We remain committed to our growth agenda and enhancing value for our shareholders. The Board intends to complete the search process deliberately and thoughtfully to find the right individual with the experience and qualifications to lead the Company into the future."
Most importantly, SEAS said it continues to advance the company-wide cost-saving initiative of $50 million per year. In an effort to realize savings as quickly as possible, SEAS announced a restructuring program across the 11 parks. The initiative will focus on centralizing operations, reducing duplication and increasing efficiencies. Some positions in the company will be eliminated, although specific numbers were not provided.
Jim Atchison commented that:
"In order to achieve the goals of our business realignment, we regret that some positions will necessarily be eliminated. However, our cost savings effort is part of a broader program to position us for long term growth."
As I previously wrote, I believe investors have overreacted to recent results, and SEAS presents a compelling buying opportunity based on: (1) lack of new park supply, (2) the dividend yield, (3) a reasonable valuation, and (4) further upside as the economy continues to recover. Added to this thesis is the cost-saving initiative in action. I am now more bullish on SEAS as a result of this announcement.
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