Marcus® Hotels & Resorts achieves strong operating performance; Marcus Theatres® continues to outperform the industry
Second Quarter Fiscal 2016 Highlights
-
Total revenues for the second quarter of fiscal 2016 were
$134,978,000 , a 2.0% decrease from revenues of$137,778,000 for the comparable period in 2015. -
Operating income was
$18,261,000 for the second quarter of fiscal 2016, a 3.6% increase from operating income of$17,626,000 for the comparable prior period in 2015. -
Net earnings attributable to The
Marcus Corporation were$9,336,000 for the second quarter of fiscal 2016, a 3.5% increase from net earnings attributable to TheMarcus Corporation of$9,017,000 for the comparable period in 2015. -
Net earnings per diluted common share attributable to The
Marcus Corporation were$0.34 for the second quarter of fiscal 2016, a 6.3% increase from net earnings per diluted common share attributable to TheMarcus Corporation of$0.32 for the comparable prior period in 2015.
First Half Fiscal 2016 Highlights
-
Total revenues for the first half of fiscal 2016 were
$260,422,000 , a 1.5% increase from revenues of$256,485,000 for the comparable prior period in 2015. -
Operating income was
$29,607,000 for the first half of fiscal 2016, a 17.3% increase from operating income of$25,235,000 for the comparable prior period in 2015. -
Net earnings attributable to The
Marcus Corporation were$14,788,000 for the first half of fiscal 2016, a 20.7% increase from net earnings attributable to TheMarcus Corporation of$12,254,000 for the comparable period in 2015. -
Net earnings per diluted common share attributable to The
Marcus Corporation were$0.53 for the first half of fiscal 2016, a 20.5% increase from net earnings per diluted common share attributable to TheMarcus Corporation of$0.44 for the comparable prior period in 2015.
“This was another quarter of strong operating results for Marcus Hotels
& Resorts, while Marcus Theatres continued to outperform the industry
despite a weaker film slate. Both divisions have contributed to our
outstanding results for the first half of fiscal 2016,” said Gregory S.
Marcus, president and chief executive officer of The
“Marcus Theatres outperformed the change in national box office revenues during the second quarter by more than four percentage points, according to Rentrak, compared to the same corresponding weeks in the prior year. The majority of the decrease in the division’s second-quarter revenues and operating income was due to a weaker film slate in April and a difficult comparison against the comparable period last year, which included the busy Easter week,” said Marcus.
“The top-performing films for Marcus Theatres in the second quarter were Captain
America: Civil War, Finding Dory, Jungle Book, X Men: Apocalypse and Batman
v Superman: Dawn of Justice,” said
“Our ability to continue to outperform the industry is a result of the
significant investments we have made, and are continuing to make, in our
theatres. We added five more all-DreamLoungerSM recliner
seating locations in March and
He said adding new theatres and expanding existing theatres is also a
key element of the division’s growth strategy. “A new 10-screen theatre
is under construction in
He added that renovations at the Country Club Hills Cinema in
“Our third quarter is off to a very good start, with a solid July box
office for films including The Legend of Tarzan, The Secret Life of
Pets, Ghostbusters and Star Trek Beyond. Looking ahead,
anticipated films opening through the end of the third quarter include
“Marcus Hotels & Resorts’ revenue per available room (RevPAR) for
comparable company-owned properties increased 6.9% in the second quarter
and was up 5.9% for the first half of 2016. The majority of the RevPAR
increase was due to a higher average daily rate (ADR), with all eight of
our majority company-owned hotels reporting ADR increases for the
quarter,” said Marcus. He noted that total revenues for the division
were impacted by last year’s sale of the
“Operating income for Marcus Hotels & Resorts increased nearly
three-fold in the second quarter as we continued to focus on managing
costs and increasing profitability, while maintaining our high standards
for customer service. After adjusting for an impairment charge in last
year’s comparable period, our operating margin improved by over four
percentage points during the quarter – another solid indicator of the
progress we are making,” said
“In addition to the improvement in RevPAR and operating income, our properties also continue to outperform their competitive set in their markets. We believe this reflects our ongoing investments in our company-owned properties to maintain and enhance their value, as well as our successful track record as an experienced hotel management company,” said Khairallah.
“The Skirvin Hilton Hotel in
Summary
“With a debt-to-capitalization ratio of 39% at the end of the second
quarter and a new amended and extended five-year,
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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 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 MARCUS CORPORATION | ||||||||||||||||
Consolidated Statements of Earnings | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||
13 Weeks Ended | 26 Weeks Ended | |||||||||||||||
June 30, | June 25, | June 30, | June 25, | |||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Revenues: | ||||||||||||||||
Theatre admissions | $ | 44,010 | $ | 46,047 | $ | 90,924 | $ | 88,390 | ||||||||
Rooms | 29,323 | 29,448 | 49,375 | 50,134 | ||||||||||||
Theatre concessions | 28,503 | 29,813 | 58,384 | 56,647 | ||||||||||||
Food and beverage | 18,248 | 17,498 | 32,793 | 32,668 | ||||||||||||
Other revenues | 14,894 | 14,972 | 28,946 | 28,646 | ||||||||||||
Total revenues | 134,978 | 137,778 | 260,422 | 256,485 | ||||||||||||
Costs and expenses: | ||||||||||||||||
Theatre operations | 38,695 | 39,536 | 78,993 | 75,928 | ||||||||||||
Rooms | 10,500 | 11,129 | 19,801 | 20,909 | ||||||||||||
Theatre concessions | 7,569 | 8,281 | 15,305 | 15,352 | ||||||||||||
Food and beverage | 14,538 | 14,459 | 27,299 | 27,835 | ||||||||||||
Advertising and marketing | 5,505 | 5,789 | 10,493 | 11,158 | ||||||||||||
Administrative | 15,332 | 14,572 | 29,936 | 28,813 | ||||||||||||
Depreciation and amortization | 10,360 | 9,859 | 20,551 | 19,589 | ||||||||||||
Rent | 2,107 | 2,154 | 4,226 | 4,308 | ||||||||||||
Property taxes | 3,995 | 3,434 | 8,138 | 7,480 | ||||||||||||
Other operating expenses | 8,116 | 8,336 | 16,073 | 16,959 | ||||||||||||
Impairment charge | - | 2,603 | - | 2,919 | ||||||||||||
Total costs and expenses | 116,717 | 120,152 | 230,815 | 231,250 | ||||||||||||
Operating income | 18,261 | 17,626 | 29,607 | 25,235 | ||||||||||||
Other income (expense): | ||||||||||||||||
Investment income | 9 | 217 | 17 | 195 | ||||||||||||
Interest expense | (2,457 | ) | (2,467 | ) | (4,866 | ) | (4,894 | ) | ||||||||
Loss on disposition of property, equipment and other assets | (604 | ) | (495 | ) | (717 | ) | (747 | ) | ||||||||
Equity earnings (losses) from unconsolidated joint ventures, net | 130 | (25 | ) | 109 | (123 | ) | ||||||||||
(2,922 | ) | (2,770 | ) | (5,457 | ) | (5,569 | ) | |||||||||
Earnings before income taxes | 15,339 | 14,856 | 24,150 | 19,666 | ||||||||||||
Income taxes | 5,993 | 5,942 | 9,524 | 7,706 | ||||||||||||
Net earnings | 9,346 | 8,914 | 14,626 | 11,960 | ||||||||||||
Net earnings (loss) attributable to noncontrolling interests | 10 | (103 | ) | (162 | ) | (294 | ) | |||||||||
Net earnings attributable to The Marcus Corporation | $ | 9,336 | $ | 9,017 | $ | 14,788 | $ | 12,254 | ||||||||
Net earnings per common share attributable to | ||||||||||||||||
The Marcus Corporation - diluted | $ | 0.34 | $ | 0.32 | $ | 0.53 | $ | 0.44 | ||||||||
Weighted ave. shares outstanding - diluted | 27,814 | 27,866 | 27,795 | 27,810 |
THE MARCUS CORPORATION | ||||||
Condensed Consolidated Balance Sheets | ||||||
(In thousands) | ||||||
(Unaudited) | (Audited) | |||||
June 30, | December 31, | |||||
2016 | 2015 | |||||
Assets: | ||||||
Cash, cash equivalents and restricted cash | $ | 15,097 | $ | 24,691 | ||
Accounts and notes receivable | 19,335 | 13,366 | ||||
Deferred income taxes | 2,547 | 2,807 | ||||
Other current assets | 6,846 | 7,041 | ||||
Property and equipment, net | 688,057 | 670,702 | ||||
Other assets | 84,148 | 88,901 | ||||
Total Assets | $ | 816,030 | $ | 807,508 | ||
Liabilities and Shareholders' Equity: | ||||||
Accounts payable | $ | 25,239 | $ | 28,737 | ||
Income taxes | 4,348 | 3,490 | ||||
Taxes other than income taxes | 16,061 | 17,303 | ||||
Other current liabilities | 48,464 | 55,500 | ||||
Current portion of capital lease obligation | 5,361 | 5,181 | ||||
Current maturities of long-term debt | 36,404 | 18,292 | ||||
Capital lease obligation | 12,466 | 15,192 | ||||
Long-term debt | 202,888 | 207,376 | ||||
Deferred income taxes | 47,405 | 46,212 | ||||
Deferred compensation and other | 45,603 | 44,527 | ||||
Equity | 371,791 | 365,698 | ||||
Total Liabilities and Shareholders' Equity | $ | 816,030 | $ | 807,508 |
THE MARCUS CORPORATION | ||||||||||||||
Business Segment Information | ||||||||||||||
(Unaudited) | ||||||||||||||
(In thousands) | ||||||||||||||
Hotels/ | Corporate | |||||||||||||
Theatres | Resorts | Items | Total | |||||||||||
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 | ||||||||||
13 Weeks Ended June 25, 2015 | ||||||||||||||
Revenues | $ | 79,797 | $ | 57,809 | $ | 172 | $ | 137,778 | ||||||
Operating income (loss) | 17,397 | 2,430 | (2,201 | ) | 17,626 | |||||||||
Depreciation and amortization | 5,288 | 4,480 | 91 | 9,859 | ||||||||||
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 | ||||||||||
26 Weeks Ended June 25, 2015 | ||||||||||||||
Revenues | $ | 152,439 | $ | 103,767 | $ | 279 | $ | 256,485 | ||||||
Operating income (loss) | 32,526 | (1,116 | ) | (6,175 | ) | 25,235 | ||||||||
Depreciation and amortization | 10,576 | 8,832 | 181 | 19,589 | ||||||||||
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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Source: The
The Marcus Corporation
Douglas A. Neis
(414) 905-1100