Challenging film comparisons and nonrecurring expenses impact results
First Quarter Fiscal 2019 Highlights
-
Total revenues for the first quarter of fiscal 2019 were
$170,039,000 , a 1.1% increase from total revenues of$168,191,000 for the first quarter of fiscal 2018. -
Operating income was
$4,950,000 for the first quarter of fiscal 2019, compared to operating income of$17,016,000 for the prior year quarter. -
Net earnings attributable to The
Marcus Corporation were$1,860,000 for the first quarter of fiscal 2019, compared to net earnings attributable to TheMarcus Corporation of$9,821,000 for the same period in fiscal 2018. -
Net earnings per diluted common share attributable to The
Marcus Corporation were$0.06 for the first quarter of fiscal 2019, compared to net earnings per diluted common share attributable to TheMarcus Corporation of$0.35 for the first quarter of fiscal 2018. -
Adjusted net earnings attributable to The
Marcus Corporation were$4,085,000 for the first quarter of fiscal 2019, compared to Adjusted net earnings attributable to TheMarcus Corporation of$9,821,000 for the first quarter of fiscal 2018. -
Adjusted net earnings per diluted common share attributable to
The Marcus Corporation were$0.13 for the first quarter of fiscal 2019, compared to Adjusted net earnings per diluted common share attributable to TheMarcus Corporation of$0.35 for the prior year first quarter. -
Adjusted EBITDA was
$24,756,000 for the first quarter of fiscal 2019, compared to Adjusted EBITDA of$31,516,000 for the comparable prior period. -
Adjusted net earnings attributable to The
Marcus Corporation , Adjusted net earnings per diluted common share attributable to TheMarcus Corporation and Adjusted EBITDA reflect adjustments made by the company to eliminate the impact of certain nonrecurring acquisition and preopening expenses related to theMovie Tavern acquisition, as well as certain nonrecurring preopening expenses related to the project currently underway to convert the former InterContinentalMilwaukee hotel into Saint Kate –The Arts Hotel .
“As expected, this was a challenging quarter for The
“Both The
Revenues for Marcus Theatres increased in the first quarter of fiscal
2019 due to the acquisition of the
Operating income for the first quarter of 2019 was also reduced by
acquisition and preopening expenses related to the
“We are pleased with the
“The Movie Tavern acquisition further expands our focus on enhanced food
and beverage offerings in our theatres. With the addition of these
locations, we now offer in-theatre dining in approximately 36% of our
company-owned, first-run theatres. We were also excited to recently
announce that we will be introducing the
Early in the second quarter, the company completed the addition of its
signature DreamLoungerSM recliner seating to three
“Our continued investments in premium large format screens, including our UltraScreen DLX and SuperScreen DLX auditoriums, enable us to capitalize on the audience appeal of the biggest blockbuster films. These films play exceptionally well on an immersive screen with dramatic sound that provides the ultimate moviegoing experience,” said Rodriguez.
The five top-performing films for Marcus Theatres in the first quarter were Captain Marvel, How to Train Your Dragon: The Hidden World, Aquaman, The Lego Movie 2: The Second Part and The Upside.
“Excitement is building for tonight’s kickoff to the busy summer season, which includes highly anticipated movies such as Avenger: Endgame, Pokémon: Detective Pikachu, Aladdin, Godzilla: King of the Monsters, The Secret Life of Pets 2, X-Men: Dark Phoenix, Men in Black: International, Toy Story 4, Spider-Man: Far From Home, The Lion King and Fast and Furious Presents: Hobbs & Shaw,” said Rodriguez.
Marcus Hotels & Resorts’ revenue per available room (RevPAR) for
comparable company-owned properties decreased 1.9% in the first quarter
of fiscal 2019, due to the ongoing renovation of the
“The increased operating loss for the first quarter of fiscal 2019 was
due entirely to preopening expenses related to the transformation of the
InterContinental Milwaukee hotel into Saint Kate –
“The transformation of the InterContinental Milwaukee into Saint Kate –
On
“We are excited to assume management of a very well-known
With the addition of the
Conference Call and Webcast
A telephone replay of the conference call will be available through
Non-GAAP Financial Measures
Adjusted net earnings attributable to The
Adjusted net earnings attributable to The
Adjusted net earnings attributable to The
About The
Headquartered in
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; (9) the adverse impact on
business and consumer spending on travel, leisure and entertainment
resulting from terrorist attacks in
| THE MARCUS CORPORATION | ||||||||
| Consolidated Statements of Earnings | ||||||||
| (Unaudited) | ||||||||
| (in thousands, except per share data) | ||||||||
| 13 Weeks Ended | ||||||||
| March 28, | March 29, | |||||||
| 2019 | 2018 | |||||||
| Revenues: | ||||||||
| Theatre admissions | $ | 58,969 | $ | 63,006 | ||||
| Rooms | 18,938 | 20,671 | ||||||
| Theatre concessions | 47,155 | 41,413 | ||||||
| Food and beverage | 15,783 | 15,803 | ||||||
| Other revenues | 20,829 | 19,526 | ||||||
| 161,674 | 160,419 | |||||||
| Cost reimbursements | 8,365 | 7,772 | ||||||
| Total revenues | 170,039 | 168,191 | ||||||
| Costs and expenses: | ||||||||
| Theatre operations | 56,378 | 54,655 | ||||||
| Rooms | 9,035 | 9,501 | ||||||
| Theatre concessions | 17,269 | 11,961 | ||||||
| Food and beverage | 13,609 | 14,065 | ||||||
| Advertising and marketing | 4,910 | 5,114 | ||||||
| Administrative | 17,859 | 17,282 | ||||||
| Depreciation and amortization | 15,985 | 13,904 | ||||||
| Rent | 5,403 | 2,951 | ||||||
| Property taxes | 5,393 | 5,214 | ||||||
| Other operating expenses | 10,883 | 8,756 | ||||||
| Reimbursed costs | 8,365 | 7,772 | ||||||
| Total costs and expenses | 165,089 | 151,175 | ||||||
| Operating income | 4,950 | 17,016 | ||||||
| Other income (expense): | ||||||||
| Investment income (loss) | 473 | (36 | ) | |||||
| Interest expense | (3,059 | ) | (3,309 | ) | ||||
| Other expense | (480 | ) | (496 | ) | ||||
| Gain on disposition of property, equipment and other assets | 7 | - | ||||||
| Equity earnings (losses) from unconsolidated joint ventures, net | (84 | ) | 52 | |||||
| (3,143 | ) | (3,789 | ) | |||||
| Earnings before income taxes | 1,807 | 13,227 | ||||||
| Income taxes | 13 | 3,421 | ||||||
| Net earnings | 1,794 | 9,806 | ||||||
| Net loss attributable to noncontrolling interests | (66 | ) | (15 | ) | ||||
| Net earnings attributable to The Marcus Corporation | $ | 1,860 | $ | 9,821 | ||||
| Net earnings per common share attributable to | ||||||||
| The Marcus Corporation - diluted | $ | 0.06 | $ | 0.35 | ||||
| Weighted average shares outstanding - diluted | 30,499 | 28,434 | ||||||
| THE MARCUS CORPORATION | ||||||
| Condensed Consolidated Balance Sheets | ||||||
| (In thousands) | ||||||
| (Unaudited) | (Audited) | |||||
| March 28, | December 27, | |||||
| 2019 | 2018 | |||||
| Assets: | ||||||
| Cash, cash equivalents and restricted cash | $ | 13,254 | $ | 21,927 | ||
| Accounts and notes receivable | 20,329 | 25,684 | ||||
| Refundable income taxes | 5,882 |
|
5,983 | |||
| Other current assets | 16,759 | 15,355 | ||||
| Property and equipment, net | 934,154 | 840,043 | ||||
| Operating lease right-of-use assets | 226,446 | - | ||||
| Other assets | 125,572 | 80,339 | ||||
| Total Assets | $ | 1,342,396 | $ | 989,331 | ||
| Liabilities and Shareholders' Equity: | ||||||
| Accounts payable | $ | 35,263 | $ | 37,452 | ||
| Taxes other than income taxes | 17,219 | 18,743 | ||||
| Other current liabilities | 64,597 | 77,192 | ||||
| Current portion of finance lease obligations | 5,260 | 5,912 | ||||
| Current portion of operating lease obligations | 12,591 | - | ||||
| Current maturities of long-term debt | 10,062 | 9,957 | ||||
| Capital lease obligations | 22,556 | 22,208 | ||||
| Operating lease obligations | 224,827 | - | ||||
| Long-term debt | 263,576 | 228,863 | ||||
| Deferred income taxes | 41,845 | 41,977 | ||||
| Deferred compensation and other | 46,741 | 56,908 | ||||
| Equity | 597,859 | 490,119 | ||||
| Total Liabilities and Shareholders' Equity | $ | 1,342,396 | $ | 989,331 | ||
| THE MARCUS CORPORATION | ||||||||||||||
| Business Segment Information | ||||||||||||||
| (Unaudited) | ||||||||||||||
| (In thousands) | ||||||||||||||
| Theatres | Hotels/ Resorts | Corporate Items | Total | |||||||||||
| 13 Weeks Ended March 28, 2019 | ||||||||||||||
| Revenues | $ | 114,885 | $ | 55,061 | $ | 93 | $ | 170,039 | ||||||
| Operating income (loss) | 12,594 | (3,153 | ) | (4,491 | ) | 4,950 | ||||||||
| Depreciation and amortization | 11,127 | 4,767 | 91 | 15,985 | ||||||||||
| 13 Weeks Ended March 29, 2018 | ||||||||||||||
| Revenue | $ | 112,935 | $ | 55,168 | $ | 88 | $ | 168,191 | ||||||
| Operating income (loss) | 23,983 | (2,649 | ) | (4,318 | ) | 17,016 | ||||||||
| Depreciation and amortization | 9,228 | 4,590 | 86 | 13,904 | ||||||||||
| 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. | ||||||||||||||
| THE MARCUS CORPORATION | ||||||||
| Reconciliation of Adjusted net earnings and Adjusted net earnings per diluted common share | ||||||||
| (Unaudited) | ||||||||
| (In thousands, except per share data) | ||||||||
| 13 Weeks Ended | ||||||||
| March 28, | March 29, | |||||||
| 2019 | 2018 | |||||||
| Net earnings attributable to The Marcus Corporation | $ | 1,860 | $ | 9,821 | ||||
| Add (deduct): | ||||||||
| Acquisition/preopening expenses - theatres (a) | 1,809 | - | ||||||
| Preopening expenses - hotels (b) | 1,235 | - | ||||||
| Tax impact of adjustments to net earnings (c) | (819 | ) | - | |||||
| Adjusted net earnings attributable to The Marcus Corporation | $ | 4,085 | $ | 9,821 | ||||
| Weighted ave. shares outstanding - diluted | 30,499 | 28,434 | ||||||
| Net earnings per diluted common share attributable to The Marcus Corporation | $ | 0.06 | $ | 0.35 | ||||
| Adjusted net earnings per diluted common share attributable to The Marcus Corporation | $ | 0.13 | $ | 0.35 | ||||
| (a) Acquisition and preopening costs incurred related to the Movie Tavern acquisition. | ||||||||
| (b) Preopening costs incurred related to the conversion of the InterContinental Milwaukee into Saint Kate - The Arts Hotel. | ||||||||
| (c) Represents the tax effect related to adjustments (a) and (b) to net earnings, calculated using statutory tax rate of 26.9%. | ||||||||
| Reconciliation of Net earnings to Adjusted EBITDA | ||||||||
| (Unaudited) | ||||||||
| (In thousands) | ||||||||
| 13 Weeks Ended | ||||||||
| March 28, | March 29, | |||||||
| 2019 | 2018 | |||||||
| Net earnings attributable to The Marcus Corporation | $ | 1,860 | $ | 9,821 | ||||
| Add (deduct): | ||||||||
| Investment (income) loss | (473 | ) | 36 | |||||
| Interest expense | 3,059 | 3,309 | ||||||
| Other expense | 480 | 496 | ||||||
| (Gain) loss on disposition of property, equipment and other assets | (7 | ) | - | |||||
| Equity (earnings) losses from unconsolidated joint ventures, net | 84 | (52 | ) | |||||
| Net loss attributable to noncontrolling interests | (66 | ) | (15 | ) | ||||
| Income tax expense | 13 | 3,421 | ||||||
| Depreciation and amortization | 15,985 | 13,904 | ||||||
| Share-based compensation expenses (a) | 777 | 596 | ||||||
| Acquisition/preopening expenses - theatres (b) | 1,809 | - | ||||||
| Preopening expenses - hotels (c) | 1,235 | - | ||||||
| Adjusted EBITDA | $ | 24,756 | $ | 31,516 | ||||
| (a) Non-cash charges related to share-based compensation programs. | ||||||||
| (b) Acquisition and preopening costs incurred related to the Movie Tavern acquisition. | ||||||||
| (c) Preopening costs incurred related to the conversion of the InterContinental Milwaukee into Saint Kate - The Arts Hotel. | ||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20190425005304/en/
Source: The
For additional information, contact:
Douglas A. Neis
(414)
905-1100