Record results for Marcus Theatres® drive strong quarter
Third Quarter Fiscal 2014 Highlights
-
Total revenues for the third quarter of fiscal 2014 were
$109,845,000 , a 17.3% increase from revenues of$93,674,000 for the third quarter of fiscal 2013. -
Operating income was
$5,661,000 for the third quarter of fiscal 2014, compared to an operating loss of$(224,000) for the third quarter of fiscal 2013. -
Net earnings attributable to The
Marcus Corporation were$4,071,000 for the third quarter of fiscal 2014, compared to a net loss attributable to TheMarcus Corporation of$(1,372,000) for the third quarter of fiscal 2013. -
Net earnings per diluted common share attributable to The
Marcus Corporation were$0.15 for the third quarter of fiscal 2014, compared to a net loss per diluted common share attributable to TheMarcus Corporation of$(0.05) for the third quarter of fiscal 2013. -
Net earnings attributable to The
Marcus Corporation for the third quarter of fiscal 2014 benefited from an allocation of a$3,798,000 pre-tax loss attributable to noncontrolling interests related primarily to a recent settlement with the company’s partners in theSkirvin Hilton hotel. The settlement resulted in a reallocation between partners of the income from the extinguishment of debt at theSkirvin Hilton , contributing to an increase in net earnings attributable to TheMarcus Corporation of$0.08 per diluted common share. -
Results for the third quarter of fiscal 2013 were unfavorably impacted
by unusual items totaling approximately
$2.0 million , or$0.04 per diluted common share, consisting of approximately$1.4 million of costs related to the settlement of lawsuits concerning the company’sLas Vegas property and a$618,000 impairment charge in the theatre division.
First Three Quarters Fiscal 2014 Highlights
-
Total revenues for the first three quarters of fiscal 2014 were
$339,465,000 , an 8.7% increase from revenues of$312,246,000 for the same period in fiscal 2013. -
Operating income was
$38,818,000 for the first three quarters of fiscal 2014, a 29.6% increase from operating income of$29,948,000 for the first three quarters of fiscal 2013. -
Net earnings attributable to The
Marcus Corporation were$20,747,000 for the first three quarters of fiscal 2014, a 47.9% increase from net earnings attributable to TheMarcus Corporation of$14,031,000 for the same period in fiscal 2013. -
Net earnings per diluted common share attributable to The
Marcus Corporation were$0.77 for the first three quarters of fiscal 2014, a 54.0% increase from net earnings per diluted common share attributable to TheMarcus Corporation of$0.50 for the first three quarters of fiscal 2013. -
Results for the first three quarters of fiscal 2013 were unfavorably
impacted by unusual items totaling approximately
$4.0 million , or$0.09 per diluted common share, consisting of$3.0 million of costs related to the settlement of lawsuits concerning the company’sLas Vegas property and$1.0 million of impairment charges in the theatre division.
“We are very pleased to report such a strong third quarter driven by
record results for Marcus Theatres. The division outperformed the
industry for the period. In addition to a strong slate of films this
quarter, this division has undergone a smooth transition in leadership
and we are making investments in new features and amenities at select
locations and executing successful marketing strategies that have
attracted more moviegoers to our theatres,” said
“Third-quarter revenues for Marcus Theatres increased 26.8%, setting a new all-time record. Operating income was up 54.6%, which was also a record, excluding fiscal 2010, which included a one-time change in the estimate of deferred gift-card income. This strong performance indicates our strategies to enhance all aspects of the moviegoing experience are generating results,” said Marcus.
“The movie slate was solid throughout the third quarter, with increased
box office revenues in all 13 weeks of the quarter compared to last
year. The top-five best performing films for Marcus Theatres in the
third quarter were Frozen, The Hobbit: The Desolation of Smaug,
The Hunger Games: Catching Fire, The Lego® Movie and Anchorman
2: The Legend Continues,” said
“Three weeks into our fourth fiscal quarter, March is ahead of last
year, with strong carryover of The Lego® Movie and solid
performances of new films such as 300:
“Looking ahead to the busy summer season and the start of our new fiscal year, the slate of anticipated films includes Maleficent, Edge of Tomorrow, How to Train Your Dragon 2, Jersey Boys, Transformers: Age of Extinction, Deliver Us From Evil, Dawn of the Planet of the Apes and Planes: Fire & Rescue,” added Rodriguez.
On
“We’ve looked at the business from all customer angles to bring a full-sensory experience to our movie-going guests. By the end of the fiscal year, we will have doubled the number of theatres offering DreamLoungerSM oversized leather recliners in all auditoriums to eight locations from four. Eleven theatres will feature UltraScreen DLX™ auditoriums, which combine a premium large-format UltraScreen® and Dolby® Atmos™ immersive sound with DreamLounger luxurious oversized recliner seating. We will have a total of 20 large-screen formats in our circuit by the end of the fiscal year,” said Rodriguez.
“We are also expanding our popular cocktail and dining concepts to additional theatres, bringing distinctive food and beverage options to many more guests. By the end of fiscal 2014, we will have doubled the number of theatres with Take Five cocktail lounges from six to 12, doubled our Zaffiro’s Express lobby dining locations from six to 12, and expanded our Big Screen BistroSM full-service in-theatre dining concept to three additional theatres,” said Rodriguez.
“We believe these major investments in our circuit will provide our guests with a complete entertainment experience unlike any other and will attract a broader range of audiences to our theatres. Further expansions are planned for fiscal 2015. These investments, combined with the continued solid execution on the part of our team, should position us to continue our industry-leading performance,” he added.
“Results for Marcus Hotels & Resorts improved slightly in the third quarter, after adjusting for last year’s legal settlement costs, due in part to an 8.1% increase in food and beverage revenues compared to the prior year quarter. Revenue per available room (RevPAR) for comparable company-owned hotels increased 2.5% in the third quarter and 3.4% for the first three quarters of fiscal 2014. The improvements were driven by increases in both occupancy and average daily rate,” said Marcus.
“During the quarter, we announced plans to convert our company-owned
Four Points by Sheraton Chicago Downtown/Magnificent Mile property into
one of the first AC Hotels by
“We continue to invest in our properties to add new amenities and
enhance the guest experience. The renovation of the guest rooms in the
modern tower addition of
Balance Sheet
“We have repurchased a total of 288,000 shares of our common stock
during the first three quarters of the fiscal year and ended the third
quarter with a debt-to-total capitalization ratio of 42%. Our strong
balance sheet provides us with a great deal of flexibility to return
capital to shareholders through our dividend policy and share
repurchases, continue to invest in our two businesses, and pursue future
growth opportunities,” said
Conference Call and Webcast
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
increasing depreciation expenses, reduced operating profits during major
property renovations, and preopening and start-up costs due to the
capital intensive nature of our businesses; (3) the effects of adverse
economic conditions in our markets, particularly with respect to our
hotels and resorts division; (4) the effects of adverse weather
conditions, particularly during the winter in the Midwest and in our
other markets; (5) the effects on our occupancy and room rates of the
relative industry supply of available rooms at comparable lodging
facilities in our markets; (6) the effects of competitive conditions in
our markets; (7) our ability to identify properties to acquire, develop
and/or manage and the continuing availability of funds for such
development; and (8) 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 |
39 Weeks Ended |
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|
February 27, |
February 28, |
February 27, |
February 28, |
||||||||||||||
|
2014 |
2013 |
2014 |
2013 |
||||||||||||||
| Revenues: | |||||||||||||||||
| Theatre admissions | $ | 40,873 | $ | 32,961 | $ | 110,955 | $ | 102,099 | |||||||||
| Rooms | 19,040 | 18,581 | 80,158 | 75,125 | |||||||||||||
| Theatre concessions | 23,508 | 17,496 | 63,073 | 55,017 | |||||||||||||
| Food and beverage | 13,730 | 12,699 | 44,806 | 42,358 | |||||||||||||
| Other revenues | 12,694 | 11,937 | 40,473 | 37,647 | |||||||||||||
| Total revenues | 109,845 | 93,674 | 339,465 | 312,246 | |||||||||||||
| Costs and expenses: | |||||||||||||||||
| Theatre operations | 35,923 | 28,543 | 96,007 | 86,807 | |||||||||||||
| Rooms | 9,570 | 9,057 | 30,422 | 28,204 | |||||||||||||
| Theatre concessions | 6,472 | 4,972 | 17,378 | 14,932 | |||||||||||||
| Food and beverage | 11,823 | 10,951 | 34,860 | 32,236 | |||||||||||||
| Advertising and marketing | 5,805 | 5,583 | 19,218 | 18,090 | |||||||||||||
| Administrative | 11,978 | 11,825 | 35,348 | 34,888 | |||||||||||||
| Depreciation and amortization | 8,284 | 8,591 | 25,068 | 25,490 | |||||||||||||
| Rent | 2,139 | 2,077 | 6,379 | 6,308 | |||||||||||||
| Property taxes | 4,142 | 3,860 | 11,316 | 11,015 | |||||||||||||
| Other operating expenses | 8,048 | 7,821 | 24,651 | 23,293 | |||||||||||||
| Impairment charge | - | 618 | - | 1,035 | |||||||||||||
| Total costs and expenses | 104,184 | 93,898 | 300,647 | 282,298 | |||||||||||||
| Operating income | 5,661 | (224 | ) | 38,818 | 29,948 | ||||||||||||
| Other income (expense): | |||||||||||||||||
| Investment income | 389 | 258 | 409 | 301 | |||||||||||||
| Interest expense | (2,585 | ) | (2,464 | ) | (7,563 | ) | (6,855 | ) | |||||||||
| Extinguishment of debt | - | 6,008 | - | 6,008 | |||||||||||||
| Loss on disposition of property, equipment and other assets | (193 | ) | (315 | ) | (965 | ) | (289 | ) | |||||||||
| Equity losses from unconsolidated joint ventures, net | (164 | ) | (295 | ) | (193 | ) | (318 | ) | |||||||||
| (2,553 | ) | 3,192 | (8,312 | ) | (1,153 | ) | |||||||||||
| Earnings before income taxes | 3,108 | 2,968 | 30,506 | 28,795 | |||||||||||||
| Income taxes (benefit) | 2,835 | (1,310 | ) | 13,905 | 9,051 | ||||||||||||
| Net earnings | 273 | 4,278 | 16,601 | 19,744 | |||||||||||||
| Net earnings (loss) attributable to noncontrolling interests | (3,798 | ) | 5,650 | (4,146 | ) | 5,713 | |||||||||||
| Net earnings (loss) attributable to The Marcus Corporation | $ | 4,071 | $ | (1,372 | ) | $ | 20,747 | $ | 14,031 | ||||||||
|
Net earnings (loss) per common share attributable to The Marcus Corporation - diluted |
$ | 0.15 | $ | (0.05 | ) | $ | 0.77 | $ | 0.50 | ||||||||
| Weighted-average shares outstanding - diluted | 27,036 | 27,274 | 27,083 | 28,124 | |||||||||||||
| THE MARCUS CORPORATION | |||||||
| Condensed Consolidated Balance Sheets | |||||||
| (In thousands) | |||||||
| (Unaudited) | (Audited) | ||||||
| February 27, | May 30, | ||||||
| 2014 | 2013 | ||||||
| Assets: | |||||||
| Cash and cash equivalents | $ | 12,029 | $ | 18,053 | |||
| Accounts and notes receivable | 10,665 | 8,568 | |||||
| Refundable income taxes | - | 255 | |||||
| Deferred income taxes | 2,929 | 2,877 | |||||
| Other current assets | 5,787 | 6,384 | |||||
| Property and equipment, net | 627,845 | 625,757 | |||||
| Other assets | 84,210 | 84,802 | |||||
| Total Assets | $ | 743,465 | $ | 746,696 | |||
| Liabilities and Shareholders' Equity: | |||||||
| Accounts payable | $ | 20,105 | $ | 25,330 | |||
| Income taxes | 2,207 | - | |||||
| Taxes other than income taxes | 14,406 | 14,000 | |||||
| Other current liabilities | 43,629 | 36,123 | |||||
| Current portion of capital lease obligation | 4,792 | 4,562 | |||||
| Current maturities of long-term debt | 32,472 | 11,193 | |||||
| Capital lease obligation | 24,615 | 28,241 | |||||
| Long-term debt | 200,418 | 231,580 | |||||
| Deferred income taxes | 39,801 | 43,516 | |||||
| Deferred compensation and other | 36,145 | 35,455 | |||||
| Equity | 324,875 | 316,696 | |||||
| Total Liabilities and Shareholders' Equity | $ | 743,465 | $ | 746,696 | |||
| THE MARCUS CORPORATION | |||||||||||||||
| Business Segment Information | |||||||||||||||
| (Unaudited) | |||||||||||||||
| (In thousands) | |||||||||||||||
| Hotels/ | Corporate | ||||||||||||||
| Theatres | Resorts | Items | Total | ||||||||||||
| 13 Weeks Ended February 27, 2014 | |||||||||||||||
| Revenues | $ | 67,810 | $ | 41,918 | $ | 117 | $ | 109,845 | |||||||
| Operating income (loss) | 13,959 | (4,369 | ) | (3,929 | ) | 5,661 | |||||||||
| Depreciation and amortization | 4,145 | 4,036 | 103 | 8,284 | |||||||||||
| 13 Weeks Ended February 28, 2013 | |||||||||||||||
| Revenues | $ | 53,466 | $ | 40,064 | $ | 144 | $ | 93,674 | |||||||
| Operating income (loss) | 9,028 | (5,948 | ) | (3,304 | ) | (224 | ) | ||||||||
| Depreciation and amortization | 4,162 | 4,277 | 152 | 8,591 | |||||||||||
| 39 Weeks Ended February 27, 2014 | |||||||||||||||
| Revenues | $ | 183,694 | $ | 155,432 | $ | 339 | $ | 339,465 | |||||||
| Operating income (loss) | 36,179 | 13,574 | (10,935 | ) | 38,818 | ||||||||||
| Depreciation and amortization | 12,278 | 12,386 | 404 | 25,068 | |||||||||||
| 39 Weeks Ended February 28, 2013 | |||||||||||||||
| Revenues | $ | 165,831 | $ | 145,950 | $ | 465 | $ | 312,246 | |||||||
| Operating income (loss) | 31,026 | 9,104 | (10,182 | ) | 29,948 | ||||||||||
| Depreciation and amortization | 12,650 | 12,433 | 407 | 25,490 | |||||||||||
| 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. | |||||||||||||||
Source: The
For additional information, contact:
The Marcus Corporation
Douglas
A. Neis
(414) 905-1100