Both divisions achieve record first quarter revenues and operating
income; Marcus Theatres® continues to
outperform the industry
The
Marcus Corporation (NYSE: MCS) today reported results for the first
quarter ended August 27, 2015.
First Quarter Fiscal 2016 Highlights
-
Total revenues for the first quarter of fiscal 2016 were a record
$149,190,000, a 13.2% increase from revenues of $131,769,000 for the
first quarter of fiscal 2015.
-
Operating income was $25,856,000 for the first quarter of fiscal 2016,
a 14.0% increase from operating income of $22,689,000 for the first
quarter of fiscal 2015.
-
Net earnings attributable to The Marcus Corporation were $14,651,000
for the first quarter of fiscal 2016, a 17.8% increase from net
earnings attributable to The Marcus Corporation of $12,432,000 for the
first quarter of fiscal 2015.
-
Net earnings per diluted common share attributable to The Marcus
Corporation were $0.53 for the first quarter of fiscal 2016, a 17.8%
increase from net earnings per diluted common share attributable to
The Marcus Corporation of $0.45 for the first quarter of fiscal 2015.
“Fiscal 2016 is off to an excellent start. Not only did we report record
revenues for The Marcus Corporation as a whole, both divisions also
achieved record revenues and operating income for the quarter. Marcus
Theatres continued its momentum, outperforming the industry for the
seventh consecutive quarter, while Marcus Hotels & Resorts benefited
from strong cost controls and a higher average daily rate,” said Gregory
S. Marcus, president and chief executive officer of The Marcus
Corporation.
Marcus
Theatres®
“This was another record quarter for Marcus Theatres. The division
achieved a 20.1% increase in revenues and a 21.6% increase in operating
income, and again outperformed the industry. The strong summer film
slate generated a 10.1% increase in the national box office for the
corresponding weeks of our first quarter according to Rentrak, while our
box office was up 16.6%,” said Marcus.
“In addition, our industry-leading attendance gains and a 13.1% increase
in concession revenues per person contributed to a substantial 27.5%
increase in overall concession revenues,” said Rolando B. Rodriguez,
president and chief executive officer of Marcus Theatres.
“As our record performance indicates, the significant investments we are
making in our theatres and amenities, along with our successful
marketing strategies and popular Magical Movie RewardsSM loyalty
program, are producing positive results. The customer response to our
DreamLoungerSM oversized recliner seating, UltraScreen
DLX® and SuperScreen DLXSM auditoriums, and
food and beverage concepts including Zaffiro’s® Express, Take
FiveSM Lounges and Big Screen BistroSM in-theatre
dining, continues to be outstanding,” said Rodriguez.
Rodriguez said the five top-performing films for Marcus Theatres in the
first quarter of fiscal 2016 were Jurassic World, Inside Out,
Minions, Ant-Man and Mission Impossible – Rogue Nation. “As
we begin our second quarter, we look forward to upcoming potential hit
films such as Maze Runner: The Scorch Trials, Everest, Hotel
Transylvania 2, The Martian, The Peanuts Movie and the next James
Bond movie, Spectre. The quarter ends with the opening week of The
Hunger Games: Mockingjay – Part 2. The film slate for the upcoming
holiday season also looks promising, led by the highly anticipated Star
Wars: The Force Awakens,” said Rodriguez.
Marcus®
Hotels & Resorts
“Marcus Hotels & Resorts also achieved record results, with a 5.6%
increase in revenues and a 4.6% increase in operating income. With a
focus this quarter on increasing total revenues, our overall revenue per
available room (RevPAR) actually decreased 1.1% compared to last year,
due in part to reduced group occupancy in the first half of the summer
at a couple of our hotels. Increased food and beverage revenues, an
increase in our average daily rate and strong cost controls contributed
to our improved operating income for the quarter. Business improved
significantly in the second half of the summer, and the quarter ended
strong,” said Marcus.
“Early in our first quarter, we celebrated the opening of the new AC
Hotel Chicago Downtown. Although initial start-up costs had a slight
negative impact on our operating results for the first quarter, we are
very pleased with the initial guest response to the new Marriott brand.
We are excited about the future for this new urban-inspired lifestyle
property,” said Joseph Khairallah, chief operating officer of Marcus
Hotels & Resorts.
“As previously announced, we purchased the SafeHouse® restaurant
and bar in Milwaukee in June, and are currently exploring opportunities
to expand this unique concept,” added Khairallah.
Marcus noted that in July the company announced an agreement to sell its
company owned and operated Hotel Phillips in Kansas City, Mo. to an
affiliate of Chicago-based Arbor Lodging Partners. “The sale, which is
expected to close at the end of September, is consistent with our
strategy to continually evaluate each of our owned hotels to ensure we
are maximizing shareholder value,” added Marcus.
Conference Call and Webcast
Marcus Corporation management will hold a conference call today, Sept.
17, 2015 at 10:00 a.m. Central/11:00 a.m. Eastern time to discuss the
first quarter results. Interested parties may listen to the call live on
the Internet through the investor relations section of the company's
website: www.marcuscorp.com,
or by dialing 1-617-399-3481 and entering the passcode 28457576.
Listeners should dial in to the call at least 5-10 minutes prior to the
start of the call or should go to the website at least 15 minutes prior
to the call to download and install any necessary audio software.
A telephone replay of the conference call will be available through
Thursday, September 24, 2015, by dialing 1-888-286-8010 and entering the
passcode 61621249. The webcast will be archived on the company’s website
until its next earnings release.
About The Marcus Corporation
Celebrating its 80th anniversary in 2015, The
Marcus Corporation is a leader in the lodging and entertainment
industries, with significant company-owned real estate assets. The
Marcus Corporation’s theatre division, Marcus
Theatres®, currently owns or manages 675 screens at 54
locations in Wisconsin, Illinois, Iowa, Minnesota, Nebraska, North
Dakota and Ohio. The company’s lodging division, Marcus®
Hotels & Resorts, owns and/or manages 20 hotels, resorts and
other properties in 11 states. The company is headquartered in
Milwaukee, Wis. For more information, please visit the company’s website
at www.marcuscorp.com.
Certain matters discussed in this press release are “forward-looking
statements” intended to qualify for the safe harbors from liability
established by the Private Securities Litigation Reform Act of 1995.
These forward-looking statements may generally be identified as such
because the context of such statements include words such as we
“believe,” “anticipate,” “expect” or words of similar import. Similarly,
statements that describe our future plans, objectives or goals are also
forward-looking statements. Such forward-looking statements are subject
to certain risks and uncertainties which may cause results to differ
materially from those expected, including, but not limited to, the
following: (1) the availability, in terms of both quantity and audience
appeal, of motion pictures for our theatre division, as well as other
industry dynamics such as the maintenance of a suitable window between
the date such motion pictures are released in theatres and the date they
are released to other distribution channels; (2) the effects of adverse
economic conditions in our markets, particularly with respect to our
hotels and resorts division; (3) the effects on our occupancy and room
rates of the relative industry supply of available rooms at comparable
lodging facilities in our markets; (4) the effects of competitive
conditions in our markets; (5) our ability to achieve expected benefits
and performance from our strategic initiatives and acquisitions; (6) the
effects of increasing depreciation expenses, reduced operating profits
during major property renovations, impairment losses, and preopening and
start-up costs due to the capital intensive nature of our businesses;
(7) the effects of adverse weather conditions, particularly during the
winter in the Midwest and in our other markets; (8) our ability to
identify properties to acquire, develop and/or manage and the continuing
availability of funds for such development; and (9) the adverse impact
on business and consumer spending on travel, leisure and entertainment
resulting from terrorist attacks in the United States or incidents such
as the recent tragedy in a movie theatre in Louisiana. Shareholders,
potential investors and other readers are urged to consider these
factors carefully in evaluating the forward-looking statements and are
cautioned not to place undue reliance on such forward-looking
statements. The forward-looking statements made herein are made only as
of the date of this press release and we undertake no obligation to
publicly update such forward-looking statements to reflect subsequent
events or circumstances.
THE MARCUS CORPORATION
|
Consolidated Statements of Earnings
|
(Unaudited)
|
(In thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended
|
|
|
|
August 27,
|
|
August 28,
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
Theatre admissions
|
|
$
|
48,222
|
|
|
$
|
41,345
|
|
|
Rooms
|
|
|
34,186
|
|
|
|
34,681
|
|
|
Theatre concessions
|
|
|
31,780
|
|
|
|
24,922
|
|
|
Food and beverage
|
|
|
18,809
|
|
|
|
16,155
|
|
|
Other revenues
|
|
|
16,193
|
|
|
|
14,666
|
|
Total revenues
|
|
|
149,190
|
|
|
|
131,769
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
Theatre operations
|
|
|
41,679
|
|
|
|
34,863
|
|
|
Rooms
|
|
|
11,187
|
|
|
|
11,402
|
|
|
Theatre concessions
|
|
|
9,038
|
|
|
|
6,721
|
|
|
Food and beverage
|
|
|
14,762
|
|
|
|
12,063
|
|
|
Advertising and marketing
|
|
|
6,489
|
|
|
|
7,388
|
|
|
Administrative
|
|
|
14,566
|
|
|
|
12,392
|
|
|
Depreciation and amortization
|
|
|
10,426
|
|
|
|
9,078
|
|
|
Rent
|
|
|
2,193
|
|
|
|
2,154
|
|
|
Property taxes
|
|
|
3,821
|
|
|
|
3,906
|
|
|
Other operating expenses
|
|
|
9,173
|
|
|
|
9,113
|
|
Total costs and expenses
|
|
|
123,334
|
|
|
|
109,080
|
|
|
|
|
|
|
|
Operating income
|
|
|
25,856
|
|
|
|
22,689
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
Investment income
|
|
|
5
|
|
|
|
25
|
|
|
Interest expense
|
|
|
(2,401
|
)
|
|
|
(2,404
|
)
|
|
Gain (loss) on disposition of property, equipment and other assets
|
|
|
195
|
|
|
|
(6
|
)
|
|
Equity losses from unconsolidated joint ventures, net
|
|
|
(19
|
)
|
|
|
(41
|
)
|
|
|
|
|
(2,220
|
)
|
|
|
(2,426
|
)
|
|
|
|
|
|
|
Earnings before income taxes
|
|
|
23,636
|
|
|
|
20,263
|
|
Income taxes
|
|
|
9,183
|
|
|
|
7,987
|
|
Net earnings
|
|
|
14,453
|
|
|
|
12,276
|
|
Net loss attributable to noncontrolling interests
|
|
|
(198
|
)
|
|
|
(156
|
)
|
Net earnings attributable to The Marcus Corporation
|
|
$
|
14,651
|
|
|
$
|
12,432
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per common share attributable to
|
|
|
|
|
|
The Marcus Corporation - diluted
|
|
$
|
0.53
|
|
|
$
|
0.45
|
|
|
|
|
|
|
|
Weighted average shares outstanding - diluted
|
|
|
27,882
|
|
|
|
27,613
|
|
|
THE MARCUS CORPORATION
|
Condensed Consolidated Balance Sheets
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
August 27,
|
|
May 28,
|
|
|
|
2015
|
|
2015
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
14,735
|
|
$
|
15,483
|
|
Accounts and notes receivable
|
|
|
19,829
|
|
|
16,339
|
|
Refundable income taxes
|
|
|
-
|
|
|
4,022
|
|
Deferred income taxes
|
|
|
3,093
|
|
|
2,997
|
|
Assets held for sale
|
|
|
17,395
|
|
|
17,623
|
|
Other current assets
|
|
|
6,670
|
|
|
6,732
|
|
Property and equipment, net
|
|
|
657,339
|
|
|
662,494
|
|
Other assets
|
|
|
85,913
|
|
|
83,352
|
|
|
|
|
|
|
Total Assets
|
|
$
|
804,974
|
|
$
|
809,042
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity:
|
|
|
|
|
|
Accounts payable
|
|
$
|
24,472
|
|
$
|
36,776
|
|
Income taxes
|
|
|
4,474
|
|
|
-
|
|
Taxes other than income taxes
|
|
|
14,537
|
|
|
15,099
|
|
Other current liabilities
|
|
|
42,799
|
|
|
50,574
|
|
Current portion of capital lease obligation
|
|
|
5,081
|
|
|
5,053
|
|
Current maturities of long-term debt
|
|
|
18,093
|
|
|
17,742
|
|
Capital lease obligation
|
|
|
17,044
|
|
|
18,317
|
|
Long-term debt
|
|
|
229,303
|
|
|
229,669
|
|
Deferred income taxes
|
|
|
48,155
|
|
|
47,502
|
|
Deferred compensation and other
|
|
|
42,839
|
|
|
42,075
|
|
Equity
|
|
|
358,177
|
|
|
346,235
|
|
|
|
|
|
|
Total Liabilities and Shareholders' Equity
|
|
$
|
804,974
|
|
$
|
809,042
|
|
THE MARCUS CORPORATION
|
Business Segment Information
|
(Unaudited)
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotels/
|
|
Corporate
|
|
|
|
|
Theatres
|
|
Resorts
|
|
Items
|
|
Total
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended August 27, 2015
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
83,324
|
|
$
|
65,741
|
|
$
|
125
|
|
|
$
|
149,190
|
Operating income (loss)
|
|
|
18,060
|
|
|
11,512
|
|
|
(3,716
|
)
|
|
|
25,856
|
Depreciation and amortization
|
|
|
5,686
|
|
|
4,600
|
|
|
140
|
|
|
|
10,426
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended August 28, 2014
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
69,387
|
|
$
|
62,247
|
|
$
|
135
|
|
|
$
|
131,769
|
Operating income (loss)
|
|
|
14,854
|
|
|
11,004
|
|
|
(3,169
|
)
|
|
|
22,689
|
Depreciation and amortization
|
|
|
4,730
|
|
|
4,247
|
|
|
101
|
|
|
|
9,078
|
|
|
|
|
|
|
|
|
|
Corporate items include amounts not allocable to the business
segments. Corporate revenues consist principally of rent and the
corporate operating loss includes general corporate expenses.
Corporate information technology costs and accounting shared
services costs are allocated to the business segments based upon
several factors, including actual usage and segment revenues.
|
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