MILWAUKEE--(BUSINESS WIRE)--The Marcus Corporation (NYSE: MCS) today reported record revenues and operating income and increased net earnings and earnings per share for the second quarter of fiscal 2017 ended June 29, 2017.
Second Quarter Fiscal 2017 Highlights
- Total revenues for the second quarter of fiscal 2017 were a record $152,775,000, a 13.2% increase from revenues of $134,978,000 for the second quarter of fiscal 2016.
- Operating income for the second quarter of fiscal 2017 was a record $18,741,000, a 2.6% increase from operating income of $18,261,000 for the second quarter of fiscal 2016.
- Net earnings attributable to The Marcus Corporation were $10,124,000 for the second quarter of fiscal 2017, an 8.4% increase from net earnings attributable to The Marcus Corporation of $9,336,000 for the second quarter of fiscal 2016.
- Net earnings per diluted common share attributable to The Marcus Corporation were $0.36 for the second quarter of fiscal 2017, a 5.9% increase from net earnings per diluted common share attributable to The Marcus Corporation of $0.34 for the second quarter of fiscal 2016.
First Half Fiscal 2017 Highlights
- Total revenues for the first half of fiscal 2017 were a record $310,729,000, a 19.3% increase from revenues of $260,422,000 for the first half of fiscal 2016.
- Operating income was $36,766,000 for the first half of fiscal 2017, a 24.2% increase from operating income of $29,607,000 for the first half of fiscal 2016.
- Net earnings attributable to The Marcus Corporation were $19,577,000 for the first half of fiscal 2017, a 32.4% increase from net earnings attributable to The Marcus Corporation of $14,788,000 for the first half of fiscal 2016.
- Net earnings per diluted common share attributable to The Marcus Corporation were $0.69 for the first half of fiscal 2017, a 30.2% increase from net earnings per diluted common share attributable to The Marcus Corporation of $0.53 for the first half of fiscal 2016.
“We are pleased that The Marcus Corporation again delivered increased operating results for our shareholders. Marcus Theatres reported record revenues and operating income in the second quarter and continued to outperform the industry, despite a weaker overall film slate. Results for Marcus Theatres were also impacted by pre-opening expenses related to two new theatres that opened during the quarter. Marcus Hotels & Resorts once again outperformed the competitive set in its markets, despite challenges posed by the April Easter holiday, which resulted in reduced group bookings during that period,” said Gregory S. Marcus, president and chief executive officer of The Marcus Corporation.
“Our performance for the first half of the fiscal year was strong, with two consecutive quarters of record results, including a 19.3% increase in revenues and a 32.4% increase in net earnings compared to the first half of fiscal 2016,” said Marcus.
Marcus Theatres reported a 22.7% increase in revenues and a 14.9% increase in operating income during the second quarter over the prior year period. Marcus Theatres outperformed the change in national box office revenues by nearly one percentage point on a comparable theatre basis compared to the same corresponding weeks in the prior year, according to Rentrak.
“The division’s outperformance was even more noteworthy considering we incurred pre-opening expenses at two new theatres that opened during the quarter and had a large number of screens out of service for renovations to expand our DreamLoungerSM recliner seating and signature food and beverage concepts to more locations,” said Marcus. “The 14 Wehrenberg Theatres® locations we acquired in December 2016 made a positive contribution to the record second quarter results.”
Marcus Theatres added DreamLounger recliner seating at seven existing locations by the end of the quarter. “Additional DreamLounger upgrades are currently underway at five more locations, including several Wehrenberg theatres, which will elevate the moviegoing experience for more valued guests and further expand our industry leadership with this signature amenity,” said Rolando B. Rodriguez, chairman, president and chief executive officer of Marcus Theatres.
In April, the division opened Marcus Southbridge Crossing Cinema, a 10-screen theatre in Shakopee, Minn. that offers DreamLounger recliner seating in all auditoriums and two UltraScreen DLX® auditoriums, as well as a Zaffiro’s® Express and Take FiveSM Lounge.
Marcus Theatres’ new dining and movie concept, BistroPlexSM, opened in Greendale, Wis. on June 30. It features eight in-theatre dining auditoriums with DreamLounger recliners, including two SuperScreen DLX® auditoriums, plus a separate full-service bar and lounge area. “We like to describe BistroPlex as a ‘restaurant that serves movies,’” said Rodriguez. “Selections from our complete menu, which includes appetizers, entrees, sandwiches and desserts as well as the traditional popcorn, soda and candy, are delivered to guests by our in-auditorium wait staff. The customer feedback and results to date are encouraging, and we are considering potential opportunities to further expand this concept.”
The five top-performing films for Marcus Theatres in the second quarter of fiscal 2017 were Guardians of the Galaxy Vol. 2, Wonder Woman, The Fate of the Furious, The Boss Baby and Beauty and the Beast.
Films that have performed well so far in the third quarter include Despicable Me 3, Spider-man: Homecoming, War for the Planet of the Apes and Dunkirk. Additional films opening through the end of the third quarter include Atomic Blonde, The Emoji Movie, The Dark Tower, It, The Lego Ninjago Movie and Kingsman: The Golden Circle.
Marcus Hotels & Resorts’ revenue per available room (RevPAR) for comparable company-owned properties decreased 1.5% in the second quarter; however, the division still outperformed the competitive set in its markets by nearly three percentage points during the second quarter and by nearly five percentage points during the first half of the year. RevPAR for the first half of the year was up 1.0%.
“The division’s lower RevPAR for the second quarter was due in large part to the timing of the Easter holiday, which fell in April this year and negatively impacted group business. We had a particularly strong June and division group room-night pace for the remainder of the year is trending ahead of last year,” said Marcus.
“A significant part of our strategy is reinvesting in our existing properties to provide memorable experiences and the latest amenities. In May, we opened 29 new spacious, all-season villas at the Grand Geneva® Resort & Spa in Lake Geneva, Wis. We are very pleased with the positive consumer response and volume of bookings since the Villas were introduced,” said Joseph Khairallah, president and chief operating officer of Marcus Hotels & Resorts.
Construction continues on the new Omaha Marriott Downtown at The Capitol District in Omaha, Neb., which is expected to open this August. Marcus Hotels & Resorts is a minority investor and will manage the 12-story, 333-room upscale hotel in the heart of the Capitol District, an entertainment and shopping destination across the street from the CenturyLink Center and TD Ameritrade Park.
“We are actively seeking new management contracts to expand our hotel and resort portfolio and hope to have additional details to share in the second half of the year,” said Khairallah.
Conference Call and Webcast
Marcus Corporation management will hold a conference call today, Thursday, July 27, 2017, at 10:00 a.m. Central/11:00 a.m. Eastern time to discuss the second 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 1-574-990-3059 and entering the passcode 45882782. 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, August 3, 2017, by dialing 1-855-859-2056 and entering passcode 45882782. 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®, is the fourth largest theatre circuit in the U.S. and currently owns or operates 895 screens at 69 locations in eight states. The company’s lodging division, Marcus® Hotels & Resorts, owns and/or manages 17 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 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) | |||||||||||||||||
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13 Weeks Ended |
26 Weeks Ended |
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| June 29, | June 30, | June 29, | June 30, | ||||||||||||||
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2017 |
2016 |
2017 |
2016 |
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| Revenues: | |||||||||||||||||
| Theatre admissions | $ | 52,135 | $ | 44,010 | $ | 115,976 | $ | 90,924 | |||||||||
| Rooms | 29,125 | 29,323 | 50,059 | 49,375 | |||||||||||||
| Theatre concessions | 35,179 | 28,503 | 76,075 | 58,384 | |||||||||||||
| Food and beverage | 18,777 | 18,248 | 33,817 | 32,793 | |||||||||||||
| Other revenues | 17,559 | 14,894 | 34,802 | 28,946 | |||||||||||||
| Total revenues | 152,775 | 134,978 | 310,729 | 260,422 | |||||||||||||
| Costs and expenses: | |||||||||||||||||
| Theatre operations | 46,756 | 38,171 | 101,441 | 78,469 | |||||||||||||
| Rooms | 10,261 | 10,500 | 19,459 | 19,801 | |||||||||||||
| Theatre concessions | 9,981 | 8,093 | 21,099 | 15,829 | |||||||||||||
| Food and beverage | 15,501 | 14,538 | 28,968 | 27,299 | |||||||||||||
| Advertising and marketing | 6,022 | 5,505 | 11,584 | 10,493 | |||||||||||||
| Administrative | 17,821 | 16,332 | 34,778 | 30,936 | |||||||||||||
| Depreciation and amortization | 12,303 | 10,360 | 24,551 | 20,551 | |||||||||||||
| Rent | 3,332 | 2,107 | 6,605 | 4,226 | |||||||||||||
| Property taxes | 4,445 | 3,995 | 9,523 | 8,138 | |||||||||||||
| Other operating expenses | 7,612 | 7,116 | 15,955 | 15,073 | |||||||||||||
| Total costs and expenses | 134,034 | 116,717 | 273,963 | 230,815 | |||||||||||||
| Operating income | 18,741 | 18,261 | 36,766 | 29,607 | |||||||||||||
| Other income (expense): | |||||||||||||||||
| Investment income | 38 | 9 | 110 | 17 | |||||||||||||
| Interest expense | (3,163 | ) | (2,457 | ) | (6,087 | ) | (4,866 | ) | |||||||||
| Gain (loss) on disposition of property, equipment and other assets | 428 | (604 | ) | 29 | (717 | ) | |||||||||||
| Equity earnings from unconsolidated joint ventures, net | 32 | 130 | 87 | 109 | |||||||||||||
| (2,665 | ) | (2,922 | ) | (5,861 | ) | (5,457 | ) | ||||||||||
| Earnings before income taxes | 16,076 | 15,339 | 30,905 | 24,150 | |||||||||||||
| Income taxes | 5,951 | 5,993 | 11,663 | 9,524 | |||||||||||||
| Net earnings | 10,125 | 9,346 | 19,242 | 14,626 | |||||||||||||
| Net earnings (loss) attributable to noncontrolling interests | 1 | 10 | (335 | ) | (162 | ) | |||||||||||
| Net earnings attributable to The Marcus Corporation | $ | 10,124 | $ | 9,336 | $ | 19,577 | $ | 14,788 | |||||||||
| Net earnings per common share attributable to | |||||||||||||||||
| The Marcus Corporation - diluted | $ | 0.36 | $ | 0.34 | $ | 0.69 | $ | 0.53 | |||||||||
| Weighted average shares outstanding - diluted | 28,486 | 27,814 | 28,435 | 27,795 | |||||||||||||
| THE MARCUS CORPORATION | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (In thousands) | ||||||||
| (Unaudited) | (Audited) | |||||||
| June 29, | December 29, | |||||||
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2017 |
2016 |
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| Assets: | ||||||||
| Cash, cash equivalents and restricted cash | $ | 15,886 | $ | 8,705 | ||||
| Accounts and notes receivable | 24,762 | 14,761 | ||||||
| Refundable income taxes | 8,221 | 1,672 | ||||||
| Other current assets | 13,299 | 11,005 | ||||||
| Property and equipment, net | 822,729 | 789,198 | ||||||
| Other assets | 83,617 | 85,925 | ||||||
| Total Assets | $ | 968,514 | $ | 911,266 | ||||
| Liabilities and Shareholders' Equity: | ||||||||
| Accounts payable | $ | 43,371 | $ | 31,206 | ||||
| Taxes other than income taxes | 18,093 | 17,261 | ||||||
| Other current liabilities | 55,484 | 63,568 | ||||||
| Current portion of capital lease obligation | 6,832 | 6,598 | ||||||
| Current maturities of long-term debt | 11,993 | 12,040 | ||||||
| Capital lease obligation | 22,630 | 26,106 | ||||||
| Long-term debt | 308,368 | 271,343 | ||||||
| Deferred income taxes | 47,825 | 46,433 | ||||||
| Deferred compensation and other | 46,091 | 45,064 | ||||||
| Equity | 407,827 | 391,647 | ||||||
| Total Liabilities and Shareholders' Equity | $ | 968,514 | $ | 911,266 | ||||
| THE MARCUS CORPORATION | |||||||||||||||||
| Business Segment Information | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| (In thousands) | |||||||||||||||||
| Hotels/ | Corporate | ||||||||||||||||
| Theatres | Resorts | Items | Total | ||||||||||||||
| 13 Weeks Ended June 29, 2017 | |||||||||||||||||
| Revenues | $ | 93,816 | $ | 58,787 | $ | 172 | $ | 152,775 | |||||||||
| Operating income (loss) | 17,960 | 5,783 | (5,002 | ) | 18,741 | ||||||||||||
| Depreciation and amortization | 7,808 | 4,401 | 94 | 12,303 | |||||||||||||
| 13 Weeks Ended June 30, 2016 | |||||||||||||||||
| Revenues | $ | 76,439 | $ | 58,435 | $ | 104 | $ | 134,978 | |||||||||
| Operating income (loss) | 15,630 | 7,011 | (4,380 | ) | 18,261 | ||||||||||||
| Depreciation and amortization | 6,089 | 4,183 | 88 | 10,360 | |||||||||||||
| 26 Weeks Ended June 29, 2017 | |||||||||||||||||
| Revenues | $ | 205,204 | $ | 105,243 | $ | 282 | $ | 310,729 | |||||||||
| Operating income (loss) | 42,651 | 3,071 | (8,956 | ) | 36,766 | ||||||||||||
| Depreciation and amortization | 15,601 | 8,758 | 192 | 24,551 | |||||||||||||
| 26 Weeks Ended June 30, 2016 | |||||||||||||||||
| Revenues | $ | 156,916 | $ | 103,267 | $ | 239 | $ | 260,422 | |||||||||
| Operating income (loss) | 33,435 | 4,459 | (8,287 | ) | 29,607 | ||||||||||||
| Depreciation and amortization | 11,947 | 8,424 | 180 | 20,551 | |||||||||||||
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.
