Marcus Theatres achieves record revenue and operating income; outperforms the industry
Second Quarter Fiscal 2019 Highlights
-
Total revenues for the second quarter of fiscal 2019 were
$232,500,000 , a 20.3% increase from total revenues of$193,298,000 for the second quarter of fiscal 2018. -
Operating income was
$27,475,000 for the second quarter of fiscal 2019, a 5.6% decrease from operating income of$29,107,000 for the prior year quarter. -
Net earnings attributable to The
Marcus Corporation were$18,066,000 for the second quarter of fiscal 2019, a 3.0% decrease from net earnings attributable to TheMarcus Corporation of$18,619,000 for the same period in fiscal 2018. -
Net earnings per diluted common share attributable to The
Marcus Corporation were$0.58 for the second quarter of fiscal 2019, a 10.8% decrease from net earnings per diluted common share attributable to TheMarcus Corporation of$0.65 for the second quarter of fiscal 2018. -
Adjusted net earnings attributable to The
Marcus Corporation were$20,169,000 for the second quarter of fiscal 2019, an 8.3% increase from Adjusted net earnings attributable to TheMarcus Corporation of$18,619,000 for the second quarter of fiscal 2018. -
Adjusted net earnings per diluted common share attributable to The
Marcus Corporation were$0.64 for the second quarter of fiscal 2019, a 1.5% decrease from Adjusted net earnings per diluted common share attributable to TheMarcus Corporation of$0.65 for the prior year second quarter. -
Adjusted EBITDA was
$49,543,000 for the second quarter of fiscal 2019, a 12.0% increase from Adjusted EBITDA of$44,248,000 for the second quarter of 2018. -
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 preopening expenses related to the conversion of the former InterContinental Milwaukee hotel into Saint Kate –The Arts Hotel , as well as nonrecurring acquisition expenses related to theMovie Tavern acquisition.
First Half Fiscal 2019 Highlights
-
Total revenues for the first half of fiscal 2019 were a record
$402,539,000 , an 11.4% increase from revenues of$361,489,000 for the first half of fiscal 2018. -
Operating income was
$32,425,000 for the first half of fiscal 2019, a 29.7% decrease from operating income of$46,123,000 for the first half of fiscal 2018. -
Net earnings attributable to The
Marcus Corporation were$19,926,000 for the first half of fiscal 2019, a 29.9% decrease from net earnings attributable to TheMarcus Corporation of$28,440,000 for the first half of fiscal 2018. -
Net earnings per diluted common share attributable to The
Marcus Corporation were$0.64 for the first half of fiscal 2019, a 36.0% decrease from net earnings per diluted common share attributable to TheMarcus Corporation of$1.00 for the first half of fiscal 2018. -
Adjusted net earnings attributable to The
Marcus Corporation were$24,279,000 for the first half of fiscal 2019, a 14.6% decrease from Adjusted net earnings attributable to TheMarcus Corporation of$28,440,000 for the first half of fiscal 2018. -
Adjusted net earnings per diluted common share attributable to The
Marcus Corporation were$0.78 for the first half of fiscal 2019, a 22.0% decrease from Adjusted net earnings per diluted common share attributable to TheMarcus Corporation of$1.00 for the first half of fiscal 2018. -
Adjusted EBITDA was
$74,299,000 for the first half of fiscal 2019, a 1.9% decrease from Adjusted EBITDA of$75,764,000 for first half of fiscal 2018. -
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 preopening expenses related to the conversion of the former InterContinental Milwaukee hotel into Saint Kate –The Arts Hotel , as well as nonrecurring acquisition expenses related to theMovie Tavern acquisition.
“We reported record revenues in the second quarter and first half of fiscal 2019 primarily due to increased revenues from the theatre division,” said
Revenues and operating income for Marcus Theatres increased 29.4% and 1.2%, respectively, in the second quarter of fiscal 2019 compared to the second quarter of fiscal 2018. Our comparable theatres outperformed the national box office by nearly one percentage point in the second quarter, according to data received from Rentrak.
“Our record results were driven by the contributions from our new
The division continued to invest in existing theatres in the fiscal 2019 second quarter, adding DreamLounger recliner seating to three
“We are pleased with the continued progress of the
“Looking ahead, we are excited for the fall opening of the first new
The five top-performing films for Marcus Theatres in the fiscal 2019 second quarter were Avengers: Endgame, Aladdin, Toy Story 4,
Marcus Hotels & Resorts’ revenue per available room (RevPAR) for comparable company-owned properties increased 3.4% in the second quarter and 1.2% for the first half of fiscal 2019. Excluding the
“As expected, operating income in our hotels division declined during the second quarter and first half of fiscal 2019 due entirely to the preopening expenses related to the conversion of the InterContinental Milwaukee hotel into Saint Kate –
“In June, we opened Saint Kate to an eager community of travelers, local residents and the arts community after being closed since early January. We are thrilled with the transformation of this property and are encouraged by the reception it has received,” said Marcus.
Marcus said the renovation of the 240-room
At the beginning of the fiscal 2019 second quarter, Marcus Hotels & Resorts assumed management 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 |
26 Weeks Ended |
||||||||||||||||
June 27, |
June 28, |
June 27, |
June 28, |
||||||||||||||
2019 |
2018 |
2019 |
2018 |
||||||||||||||
Revenues: | |||||||||||||||||
Theatre admissions |
$ |
83,055 |
|
$ |
69,607 |
|
$ |
142,024 |
|
$ |
132,613 |
|
|||||
Rooms |
|
28,194 |
|
|
29,118 |
|
|
47,132 |
|
|
49,789 |
|
|||||
Theatre concessions |
|
67,920 |
|
|
46,798 |
|
|
115,075 |
|
|
88,211 |
|
|||||
Food and beverage |
|
18,615 |
|
|
18,836 |
|
|
34,398 |
|
|
34,639 |
|
|||||
Other revenues |
|
22,533 |
|
|
20,023 |
|
|
43,362 |
|
|
39,549 |
|
|||||
|
220,317 |
|
|
184,382 |
|
|
381,991 |
|
|
344,801 |
|
||||||
Cost reimbursements |
|
12,183 |
|
|
8,916 |
|
|
20,548 |
|
|
16,688 |
|
|||||
Total revenues |
|
232,500 |
|
|
193,298 |
|
|
402,539 |
|
|
361,489 |
|
|||||
Costs and expenses: | |||||||||||||||||
Theatre operations |
|
76,193 |
|
|
61,153 |
|
|
132,571 |
|
|
115,808 |
|
|||||
Rooms |
|
10,309 |
|
|
10,567 |
|
|
19,344 |
|
|
20,068 |
|
|||||
Theatre concessions |
|
25,049 |
|
|
12,976 |
|
|
42,318 |
|
|
24,937 |
|
|||||
Food and beverage |
|
14,902 |
|
|
14,899 |
|
|
28,511 |
|
|
28,964 |
|
|||||
Advertising and marketing |
|
6,101 |
|
|
6,025 |
|
|
11,011 |
|
|
11,139 |
|
|||||
Administrative |
|
18,950 |
|
|
18,558 |
|
|
36,809 |
|
|
35,840 |
|
|||||
Depreciation and amortization |
|
18,273 |
|
|
14,426 |
|
|
34,258 |
|
|
28,330 |
|
|||||
Rent |
|
6,878 |
|
|
2,585 |
|
|
12,281 |
|
|
5,536 |
|
|||||
Property taxes |
|
5,468 |
|
|
4,779 |
|
|
10,861 |
|
|
9,993 |
|
|||||
Other operating expenses |
|
10,719 |
|
|
9,307 |
|
|
21,602 |
|
|
18,063 |
|
|||||
Reimbursed costs |
|
12,183 |
|
|
8,916 |
|
|
20,548 |
|
|
16,688 |
|
|||||
Total costs and expenses |
|
205,025 |
|
|
164,191 |
|
|
370,114 |
|
|
315,366 |
|
|||||
Operating income |
|
27,475 |
|
|
29,107 |
|
|
32,425 |
|
|
46,123 |
|
|||||
Other income (expense): | |||||||||||||||||
Investment income (loss) |
|
175 |
|
|
27 |
|
|
648 |
|
|
(9 |
) |
|||||
Interest expense |
|
(3,093 |
) |
|
(3,511 |
) |
|
(6,152 |
) |
|
(6,820 |
) |
|||||
Other expense |
|
(480 |
) |
|
(496 |
) |
|
(960 |
) |
|
(992 |
) |
|||||
Loss on disposition of property, equipment and other assets |
|
(147 |
) |
|
(408 |
) |
|
(140 |
) |
|
(408 |
) |
|||||
Equity earnings (losses) from unconsolidated joint ventures, net |
|
(84 |
) |
|
200 |
|
|
(168 |
) |
|
252 |
|
|||||
|
(3,629 |
) |
|
(4,188 |
) |
|
(6,772 |
) |
|
(7,977 |
) |
||||||
Earnings before income taxes |
|
23,846 |
|
|
24,919 |
|
|
25,653 |
|
|
38,146 |
|
|||||
Income taxes |
|
5,609 |
|
|
6,207 |
|
|
5,622 |
|
|
9,628 |
|
|||||
Net earnings |
|
18,237 |
|
|
18,712 |
|
|
20,031 |
|
|
28,518 |
|
|||||
Net earnings attributable to noncontrolling interests |
|
171 |
|
|
93 |
|
|
105 |
|
|
78 |
|
|||||
Net earnings attributable to The Marcus Corporation |
$ |
18,066 |
|
$ |
18,619 |
|
$ |
19,926 |
|
$ |
28,440 |
|
|||||
Net earnings per common share attributable to | |||||||||||||||||
The Marcus Corporation - diluted |
$ |
0.58 |
|
$ |
0.65 |
|
$ |
0.64 |
|
$ |
1.00 |
|
THE MARCUS CORPORATION |
||||||||
Condensed Consolidated Balance Sheets |
||||||||
(In thousands) |
||||||||
(Unaudited) |
(Audited) |
|||||||
June 27, |
December 27, |
|||||||
2019 |
2018 |
|||||||
Assets: | ||||||||
Cash, cash equivalents and restricted cash |
$ |
16,479 |
$ |
21,927 |
||||
Accounts and notes receivable |
|
28,072 |
|
25,684 |
||||
Refundable income taxes |
|
404 |
|
5,983 |
||||
Other current assets |
|
18,904 |
|
15,355 |
||||
Property and equipment, net |
|
935,188 |
|
840,043 |
||||
Operating lease right-of-use assets |
|
234,064 |
|
- |
||||
Other assets |
|
118,568 |
|
80,339 |
||||
Total Assets |
$ |
1,351,679 |
$ |
989,331 |
||||
Liabilities and Shareholders' Equity: | ||||||||
Accounts payable |
$ |
47,231 |
$ |
37,452 |
||||
Taxes other than income taxes |
|
20,278 |
|
18,743 |
||||
Other current liabilities |
|
68,105 |
|
77,192 |
||||
Current portion of finance lease obligations |
|
3,983 |
|
5,912 |
||||
Current portion of operating lease obligations |
|
12,967 |
|
- |
||||
Current maturities of long-term debt |
|
9,945 |
|
9,957 |
||||
Finance lease obligations |
|
21,990 |
|
22,208 |
||||
Operating lease obligations |
|
225,762 |
|
- |
||||
Long-term debt |
|
239,950 |
|
228,863 |
||||
Deferred income taxes |
|
41,691 |
|
41,977 |
||||
Deferred compensation and other |
|
47,435 |
|
56,908 |
||||
Equity |
|
612,342 |
|
490,119 |
||||
Total Liabilities and Shareholders' Equity |
$ |
1,351,679 |
$ |
989,331 |
THE MARCUS CORPORATION |
|||||||||||||
Business Segment Information |
|||||||||||||
(Unaudited) |
|||||||||||||
(In thousands) |
|||||||||||||
Theatres |
Hotels/ Resorts |
Corporate Items |
Total |
||||||||||
13 Weeks Ended June 27, 2019 | |||||||||||||
Revenues |
$ |
162,387 |
$ |
69,971 |
$ |
142 |
|
$ |
232,500 |
||||
Operating income (loss) |
|
28,219 |
|
4,016 |
|
(4,760 |
) |
|
27,475 |
||||
Depreciation and amortization |
|
13,353 |
|
4,832 |
|
88 |
|
|
18,273 |
||||
13 Weeks Ended June 28, 2018 | |||||||||||||
Revenues |
$ |
125,453 |
$ |
67,713 |
$ |
132 |
|
$ |
193,298 |
||||
Operating income (loss) |
|
27,877 |
|
6,362 |
|
(5,132 |
) |
|
29,107 |
||||
Depreciation and amortization |
|
9,656 |
|
4,684 |
|
86 |
|
|
14,426 |
||||
26 Weeks Ended June 27, 2019 | |||||||||||||
Revenues |
$ |
277,272 |
$ |
125,032 |
$ |
235 |
|
$ |
402,539 |
||||
Operating income (loss) |
|
40,813 |
|
863 |
|
(9,251 |
) |
|
32,425 |
||||
Depreciation and amortization |
|
24,480 |
|
9,599 |
|
179 |
|
|
34,258 |
||||
26 Weeks Ended June 28, 2018 | |||||||||||||
Revenues |
$ |
238,388 |
$ |
122,881 |
$ |
220 |
|
$ |
361,489 |
||||
Operating income (loss) |
|
51,860 |
|
3,713 |
|
(9,450 |
) |
|
46,123 |
||||
Depreciation and amortization |
|
18,884 |
|
9,274 |
|
172 |
|
|
28,330 |
||||
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 |
26 Weeks Ended |
||||||||||||||
June 27, |
June 28, |
June 27, |
June 28, |
||||||||||||
2019 |
2018 |
2019 |
2018 |
||||||||||||
Net earnings attributable to The Marcus Corporation |
$ |
18,066 |
|
$ |
18,619 |
|
$ |
19,926 |
|
$ |
28,440 |
|
|||
Add (deduct): | |||||||||||||||
Acquisition/preopening expenses - theatres (a) |
|
167 |
|
|
- |
|
|
1,976 |
|
|
- |
|
|||
Preopening expenses - hotels (b) |
|
2,679 |
|
|
- |
|
|
3,914 |
|
|
- |
|
|||
Tax impact of adjustments to net earnings (c) |
|
(743 |
) |
|
- |
|
|
(1,537 |
) |
|
- |
|
|||
Adjusted net earnings attributable to The Marcus Corporation |
$ |
20,169 |
|
$ |
18,619 |
|
$ |
24,279 |
|
$ |
28,440 |
|
|||
Weighted ave. shares outstanding - diluted |
|
31,401 |
|
|
28,621 |
|
|
30,948 |
|
|
28,534 |
|
|||
Net earnings per diluted common share attributable to The Marcus Corporation |
$ |
0.58 |
|
$ |
0.65 |
|
$ |
0.64 |
|
$ |
1.00 |
|
|||
Adjusted net earnings per diluted common share attributable to The Marcus Corporation |
$ |
0.64 |
|
$ |
0.65 |
|
$ |
0.78 |
|
$ |
1.00 |
|
|||
(a) Acquisition and preopening costs incurred related to the Movie Tavern acquisition. | |||||||||||||||
(b) Preopening costs incurred related to the 5+ month closure and 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 26.1%. | |||||||||||||||
Reconciliation of Net earnings to Adjusted EBITDA |
|||||||||||||||
(Unaudited) |
|||||||||||||||
(In thousands) |
|||||||||||||||
13 Weeks Ended |
26 Weeks Ended |
||||||||||||||
June 27, |
June 28, |
June 27, |
June 28, |
||||||||||||
2019 |
2018 |
2019 |
2018 |
||||||||||||
Net earnings attributable to The Marcus Corporation |
$ |
18,066 |
|
$ |
18,619 |
|
$ |
19,926 |
|
$ |
28,440 |
|
|||
Add (deduct): | |||||||||||||||
Investment (income) loss |
|
(175 |
) |
|
(27 |
) |
|
(648 |
) |
|
9 |
|
|||
Interest expense |
|
3,093 |
|
|
3,511 |
|
|
6,152 |
|
|
6,820 |
|
|||
Other expense |
|
480 |
|
|
496 |
|
|
960 |
|
|
992 |
|
|||
Loss on disposition of property, equipment and other assets |
|
147 |
|
|
408 |
|
|
140 |
|
|
408 |
|
|||
Equity (earnings) losses from unconsolidated joint ventures, net |
|
84 |
|
|
(200 |
) |
|
168 |
|
|
(252 |
) |
|||
Net earnings attributable to noncontrolling interests |
|
171 |
|
|
93 |
|
|
105 |
|
|
78 |
|
|||
Income tax expense |
|
5,609 |
|
|
6,207 |
|
|
5,622 |
|
|
9,628 |
|
|||
Depreciation and amortization |
|
18,273 |
|
|
14,426 |
|
|
34,258 |
|
|
28,330 |
|
|||
Share-based compensation expenses (a) |
|
949 |
|
|
715 |
|
|
1,726 |
|
|
1,311 |
|
|||
Acquisition/preopening expenses - theatres (b) |
|
167 |
|
|
- |
|
|
1,976 |
|
|
- |
|
|||
Preopening expenses - hotels (c) |
|
2,679 |
|
|
- |
|
|
3,914 |
|
|
- |
|
|||
Adjusted EBITDA |
$ |
49,543 |
|
$ |
44,248 |
|
$ |
74,299 |
|
$ |
75,764 |
|
|||
(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 5+ month closure and conversion of the InterContinental Milwaukee into Saint Kate - The Arts Hotel. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20190725005183/en/
Source: The
Douglas A. Neis
(414) 905-1100