Marcus Theatres® achieves record results and
again outperforms the industry; strong operating performance for Marcus®
Hotels & Resorts
The
Marcus Corporation (NYSE: MCS) today reported results for the first
quarter of fiscal 2016 ended March 31, 2016. The company recently
changed its fiscal year end to the last Thursday in December and all
fiscal 2016 results are compared to a comparable 13-week period in 2015,
beginning December 26, 2014 and ended March 26, 2015.
First Quarter Results
-
Total revenues for the first quarter of fiscal 2016 were $125,444,000,
a 5.7% increase from revenues of $118,707,000 for the comparable
period in 2015.
-
Operating income was $11,346,000 for the first quarter of fiscal 2016,
a 49.1% increase from operating income of $7,609,000 for the
comparable prior period in 2015.
-
Net earnings attributable to The Marcus Corporation were $5,452,000
for the first quarter of fiscal 2016, a 68.4% increase from net
earnings attributable to The Marcus Corporation of $3,237,000 for the
comparable period in 2015.
-
Net earnings per diluted common share attributable to The Marcus
Corporation were $0.20 for the first quarter of fiscal 2016, a 66.7%
increase from net earnings per diluted common share attributable to
The Marcus Corporation of $0.12 for the comparable prior period in
2015.
“Fiscal 2016 is off to a great start, with record revenues for The
Marcus Corporation, compared to comparable periods in prior years.
Marcus Theatres reported record results and again outperformed the
industry and Marcus Hotels & Resorts’ operating loss improved
significantly during what is traditionally a slower season,” said
Gregory S. Marcus, president and chief executive officer of The Marcus
Corporation. He noted that last year’s first quarter included the
extremely busy week between Christmas and New Year’s Eve, which
negatively impacted comparisons to this year, while the fiscal 2016
first quarter results in the theatre division benefited from an earlier
Easter week.
Marcus
Theatres®
“First quarter revenues for Marcus Theatres increased 10.8% and
operating income rose 17.7% over the comparable prior year period, with
a particularly strong March film slate ending the quarter on a high
note. The division outperformed the national box office by approximately
six percentage points, according to Rentrak, compared to the same
corresponding weeks in the prior year,” said Marcus.
“The significant investments in our theatres are making a strong
contribution to our overall performance, including our attendance gains
and an 11.4% increase in concession revenues in the first quarter. Our
record first quarter results were achieved despite a number of screens
that were closed for construction during the period,” said Rolando B.
Rodriguez, president and chief executive officer of Marcus Theatres.
“In December, we opened 17 newly renovated UltraScreen DLX®
and SuperScreen DLXSM premium large format screens
with DreamLoungerSM recliner seating, and followed that up
with two new UltraScreen DLX auditoriums in February.
We added five more all-DreamLounger locations in March and April 2016,
increasing our total number of auditoriums with DreamLounger recliner
seating to 44%. We believe we have the largest percentages of both
recliner seating and premium large format screens among the major
chains,” said Rodriguez.
Rodriguez said the top-performing films for the division in the first
quarter were Deadpool, Star Wars: The Force Awakens, Zootopia, Batman
v Superman: Dawn of Justice and The Revenant.
“Jungle Book has performed well early in the second quarter. The
busy summer season starts in May, with anticipated films opening through
the end of the second quarter including Captain America: Civil War, X
Men: Apocalypse, Alice Through the Looking Glass, Teenage Mutant Ninja
Turtles: Out of the Shadows, Finding Dory and Independence Day:
Resurgence,” said Rodriguez.
“Our growth strategies include building new theatres, acquisitions and
additional investments in our existing theatres to bring our distinctive
features and amenities to more movie-goers,” he said.
“We plan to begin construction on two new theatres in 2016 – a
replacement theatre and our first stand-alone all in-theatre dining
location. We are also continuing to expand our successful food and
beverage concepts, with one Zaffiro’s SM Express and two new
Reel Sizzle® locations opening in the second quarter. Reel
Sizzle is our newest concept inspired by the iconic diners of the 50s
that represents a growth opportunity for us,” said Rodriguez.
“In April, we purchased the Country Club Hills Cinema, a 16-screen
theatre in Country Club Hills, Ill. that will be our sixth theatre in
the greater Chicago area, building on our very strong presence in the
southern suburbs. Renovations beginning in May will add DreamLounger
recliner seating in all auditoriums, one UltraScreen DLX and two SuperScreen
DLX auditoriums, as well as a Take FiveSM Lounge and Reel
Sizzle dining experience. The newly remodeled theatre will open later
this year,” said Rodriguez.
Marcus®
Hotels & Resorts
“Marcus Hotels & Resorts’ first quarter revenue per available room
(RevPAR) for comparable company-owned properties increased 4.4% and the
division’s operating loss improved by a significant 28.0%, compared to
the comparable period in 2015. The majority of our hotels reported
improved first quarter operating results, including our AC Hotel by
Marriott Chicago Downtown, which was undergoing a major renovation last
year at this time. Our properties benefited from additional group and
transient business in what is typically the division’s weakest quarter
due to the impact of winter weather on our Midwestern locations,” said
Marcus.
“We are managing costs and increasing profitability, while maintaining
our high levels of customer service. Our operating margin improved two
percentage points in the first quarter of 2016, compared to the
comparable prior period,” said Joseph Khairallah, chief operating
officer of Marcus Hotels & Resorts. He noted that total revenues for the
division were impacted by last year’s sale of the Hotel Phillips and the
absence of New Year’s Eve in this year’s first quarter.
“We continue to invest in our existing properties to maintain and
enhance their value. We renovated the recently acquired iconic SafeHouse®
restaurant in Milwaukee this past quarter. A renovation of the Skirvin
Hilton hotel in Oklahoma City is currently underway and includes all of
the guest rooms and key public spaces,” said Khairallah.
“As we increase our visibility as a national hotel management company,
one of our major strengths is the established infrastructure we can
bring to hotel owners and developers. This includes our highly awarded
web development team that has produced nationally recognized websites,
mobile apps and social media campaigns. We recently established a new
business unit named Graydient Creative that will extend this experience
to other companies in the hospitality, retail, theatre and entertainment
industries. An example of Graydient Creative’s work is our new website,
MarcusHotels.com, which was unveiled this past quarter,” added
Khairallah.
Balance Sheet
“During the first quarter, we increased our quarterly cash dividend by
7.1% and repurchased 257,000 shares of our common stock, while still
ending the quarter with a debt-to-total capitalization ratio of only
40%. Our strong balance sheet gives us the ability to return capital to
shareholders through our dividend policy and share repurchases, while
also continuing to invest in our two businesses and pursue future growth
opportunities,” said Douglas A. Neis, chief financial officer and
treasurer of The Marcus Corporation.
Conference Call and Webcast
Marcus Corporation management will hold a conference call today, April
28, 2016 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 1-617-399-5138 and entering the passcode 93680152.
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, May 5, 2016, by dialing 1-888-286-8010 and entering the
passcode 72624673. The webcast will be archived on the company’s website
until its next earnings release.
About The Marcus Corporation
Headquartered in Milwaukee, Wisconsin, 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 670 screens at 53
locations in Wisconsin, Illinois, Iowa, Minnesota, Nebraska, North
Dakota and Ohio. The company’s lodging division, Marcus®
Hotels & Resorts, owns and/or manages 18 hotels, resorts and
other properties in nine states. 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 other incidents
of violence in public venues such as hotels and movie theatres.
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
|
|
|
|
|
March 31,
|
|
March 26,
|
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
Theatre admissions
|
|
$
|
46,914
|
|
|
$
|
42,343
|
|
|
Rooms
|
|
|
20,052
|
|
|
|
20,686
|
|
|
Theatre concessions
|
|
|
29,881
|
|
|
|
26,834
|
|
|
Food and beverage
|
|
|
14,545
|
|
|
|
15,170
|
|
|
Other revenues
|
|
|
14,052
|
|
|
|
13,674
|
|
Total revenues
|
|
|
125,444
|
|
|
|
118,707
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
Theatre operations
|
|
|
40,298
|
|
|
|
36,392
|
|
|
Rooms
|
|
|
9,301
|
|
|
|
9,780
|
|
|
Theatre concessions
|
|
|
7,736
|
|
|
|
7,071
|
|
|
Food and beverage
|
|
|
12,761
|
|
|
|
13,376
|
|
|
Advertising and marketing
|
|
|
4,988
|
|
|
|
5,369
|
|
|
Administrative
|
|
|
14,604
|
|
|
|
14,241
|
|
|
Depreciation and amortization
|
|
|
10,191
|
|
|
|
9,730
|
|
|
Rent
|
|
|
2,119
|
|
|
|
2,154
|
|
|
Property taxes
|
|
|
4,143
|
|
|
|
4,046
|
|
|
Other operating expenses
|
|
|
7,957
|
|
|
|
8,623
|
|
|
Impairment charge
|
|
|
-
|
|
|
|
316
|
|
Total costs and expenses
|
|
|
114,098
|
|
|
|
111,098
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
11,346
|
|
|
|
7,609
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
Investment income (loss)
|
|
|
8
|
|
|
|
(22
|
)
|
|
Interest expense
|
|
|
(2,409
|
)
|
|
|
(2,427
|
)
|
|
Loss on disposition of property, equipment and other assets
|
|
|
(113
|
)
|
|
|
(252
|
)
|
|
Equity losses from unconsolidated joint ventures, net
|
|
|
(21
|
)
|
|
|
(98
|
)
|
|
|
|
|
|
(2,535
|
)
|
|
|
(2,799
|
)
|
|
|
|
|
|
|
|
Earnings before income taxes
|
|
|
8,811
|
|
|
|
4,810
|
|
Income taxes
|
|
|
3,531
|
|
|
|
1,764
|
|
Net earnings
|
|
|
5,280
|
|
|
|
3,046
|
|
Net loss attributable to noncontrolling interests
|
|
|
(172
|
)
|
|
|
(191
|
)
|
Net earnings attributable to The Marcus Corporation
|
|
$
|
5,452
|
|
|
$
|
3,237
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per common share attributable to
|
|
|
|
|
|
The Marcus Corporation - diluted
|
|
$
|
0.20
|
|
|
$
|
0.12
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding - diluted
|
|
|
27,759
|
|
|
|
27,753
|
|
|
THE MARCUS CORPORATION
|
Condensed Consolidated Balance Sheets
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
|
March 31,
|
|
December 31,
|
|
|
|
|
2016
|
|
2015
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and restricted cash
|
|
$
|
24,909
|
|
$
|
24,691
|
|
Accounts and notes receivable
|
|
|
10,762
|
|
|
13,366
|
|
Deferred income taxes
|
|
|
2,807
|
|
|
2,807
|
|
Other current assets
|
|
|
6,851
|
|
|
7,041
|
|
Property and equipment, net
|
|
|
673,345
|
|
|
670,702
|
|
Other assets
|
|
|
88,229
|
|
|
88,901
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
806,903
|
|
$
|
807,508
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity:
|
|
|
|
|
|
Accounts payable
|
|
$
|
22,993
|
|
$
|
28,737
|
|
Income taxes
|
|
|
5,750
|
|
|
3,490
|
|
Taxes other than income taxes
|
|
|
14,179
|
|
|
17,303
|
|
Other current liabilities
|
|
|
50,407
|
|
|
55,500
|
|
Current portion of capital lease obligation
|
|
|
5,271
|
|
|
5,181
|
|
Current maturities of long-term debt
|
|
|
42,740
|
|
|
18,292
|
|
Capital lease obligation
|
|
|
13,829
|
|
|
15,192
|
|
Long-term debt
|
|
|
196,453
|
|
|
207,376
|
|
Deferred income taxes
|
|
|
46,117
|
|
|
46,212
|
|
Deferred compensation and other
|
|
|
44,712
|
|
|
44,527
|
|
Equity
|
|
|
364,452
|
|
|
365,698
|
|
|
|
|
|
|
|
Total Liabilities and Shareholders' Equity
|
|
$
|
806,903
|
|
$
|
807,508
|
|
|
THE MARCUS CORPORATION
|
Business Segment Information
|
(Unaudited)
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotels/
|
|
Corporate
|
|
|
|
|
Theatres
|
|
Resorts
|
|
Items
|
|
Total
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended March 31, 2016
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
80,477
|
|
$
|
44,832
|
|
|
$
|
135
|
|
|
$
|
125,444
|
Operating income (loss)
|
|
|
17,805
|
|
|
(2,552
|
)
|
|
|
(3,907
|
)
|
|
|
11,346
|
Depreciation and amortization
|
|
|
5,858
|
|
|
4,241
|
|
|
|
92
|
|
|
|
10,191
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended March 26, 2015
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
72,642
|
|
$
|
45,958
|
|
|
$
|
107
|
|
|
$
|
118,707
|
Operating income (loss)
|
|
|
15,129
|
|
|
(3,546
|
)
|
|
|
(3,974
|
)
|
|
|
7,609
|
Depreciation and amortization
|
|
|
5,288
|
|
|
4,352
|
|
|
|
90
|
|
|
|
9,730
|
|
|
|
|
|
|
|
|
|
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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