MCS
$42.00
Marcus
$.49
1.18%
Earnings Details
3rd Quarter September 2018
Thursday, October 25, 2018 7:45:00 AM
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Summary

Marcus (MCS) Recent Earnings

Marcus (MCS) reported 3rd Quarter September 2018 earnings of $0.56 per share on revenue of $170.6 million. The consensus earnings estimate was $0.52 per share on revenue of $169.5 million. Revenue grew 10.9% on a year-over-year basis.

Marcus Corp is engaged primarily in two business segments: movie theatres and hotels and resorts.

Results
Reported Earnings
$0.56
Earnings Whisper
-
Consensus Estimate
$0.52
Reported Revenue
$170.6 Mil
Revenue Estimate
$169.5 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

The Marcus Corporation Reports Record Revenues and Earnings for the Third Quarter of Fiscal 2018

Marcus® Hotels & Resorts achieves record revenues and operating income; Marcus Theatres® reports another very profitable quarter

MILWAUKEE--(BUSINESS WIRE)-- The Marcus Corporation (NYSE: MCS) today reported record revenues and net earnings for the third quarter of fiscal 2018 ended September 27, 2018.

Third Quarter Fiscal 2018 Highlights

  • Total revenues for the third quarter of fiscal 2018 were a record $170,599,000, a 5.1% increase from revenues of $162,375,000 for the third quarter of fiscal 2017.
  • Operating income for the third quarter of fiscal 2018 was $22,413,000, a 2.5% increase from operating income of $21,863,000 for the third quarter of fiscal 2017.
  • Net earnings attributable to The Marcus Corporation were a record $16,231,000 for the third quarter of fiscal 2018, a 47.9% increase from net earnings attributable to The Marcus Corporation of $10,978,000 for the third quarter of fiscal 2017.
  • Net earnings per diluted common share attributable to The Marcus Corporation were a record $0.56 for the third quarter of fiscal 2018, a 43.6% increase from net earnings per diluted common share attributable to The Marcus Corporation of $0.39 for the third quarter of fiscal 2017.

First Three Quarters Fiscal 2018 Highlights

  • Total revenues for the first three quarters of fiscal 2018 were a record $532,088,000, a 9.0% increase from revenues of $487,971,000 for the first three quarters of fiscal 2017.
  • Operating income was a record $68,536,000 for the first three quarters of fiscal 2018, a 15.2% increase from operating income of $59,485,000 for the first three quarters of fiscal 2017.
  • Net earnings attributable to The Marcus Corporation were a record $44,671,000 for the first three quarters of fiscal 2018, a 46.2% increase from net earnings attributable to The Marcus Corporation of $30,555,000 for the first three quarters of fiscal 2017.
  • Net earnings per diluted common share attributable to The Marcus Corporation were a record $1.56 for the first three quarters of fiscal 2018, a 44.4% increase from net earnings per diluted common share attributable to The Marcus Corporation of $1.08 for the first three quarters of fiscal 2017.

“The third quarter of 2018 was another record for The Marcus Corporation, with record revenues and net earnings,” said Gregory S. Marcus, president and chief executive officer of The Marcus Corporation. “In what historically is a strong quarter, the team at Marcus Hotels & Resorts did not disappoint, delivering record revenue and operating income. Marcus Theatres reported record revenues and had yet another very profitable quarter, although its operating income was impacted by several one-time costs and a film mix that contributed to slightly higher film costs.”

“For the first nine months of the year, The Marcus Corporation achieved record revenues, operating income and net earnings thanks to record revenues and operating income from both divisions,” said Marcus.

Marcus also noted that net earnings continued to benefit from a lower income tax rate, particularly during the third quarter when results were favorably impacted by additional one-time tax benefits.

Marcus® Hotels & Resorts

Third-quarter revenues for Marcus Hotels & Resorts increased 4.9% in the third quarter and operating income was up 24.5% thanks to significant margin improvement. Revenue per available room (RevPAR) for comparable company-owned properties increased 5.2% in the third quarter, outperforming the industry by three percentage points during the quarter.

“This was a very strong quarter for Marcus Hotels & Resorts, as evidenced by record revenue and operating income growth. Much credit for our revenue growth goes to our outstanding sales team, as our group business increased considerably across the majority of our properties. Meanwhile, our operating team did a tremendous job converting these revenue gains to profit. With baseball at its peak, some of our markets were also the beneficiaries of increased bookings connected to the 2018 MLB regular season drive for the playoffs,” said Marcus.

During the quarter, the division assumed management of the newly constructed Courtyard by Marriott El Paso Downtown/Convention Center in El Paso, Texas. In addition, three Marcus Hotels & Resorts properties received the coveted Condé Nast Traveler 2018 Readers’ Choice Awards. The Pfister Hotel in Milwaukee was voted the #4 Top Hotel in the Midwest by the publication’s readers, while the Grand Geneva Resort & Spa in Lake Geneva, Wis. ranked as the #6 Top Resort in the Midwest, and The Garland in North Hollywood, Calif. was recognized as the #9 Top Hotel in Los Angeles.

Marcus Theatres®

Revenues for Marcus Theatres increased 5.2% in the third quarter, compared to the same period last year. In addition to increased depreciation and a film mix that contributed to higher film costs this quarter, operating income was also impacted by several one-time items. In addition, the same baseball dynamic that helped our hotels resulted in lower attendance at some of our theatres in key markets such as Chicago, Milwaukee and St. Louis.

“After a busy second quarter opening up new amenities, we continued to invest in our theatres in the third quarter, including adding DreamLoungerSM recliner seating to one more location and converting an additional auditorium to our SuperScreen DLX® format. We are looking forward to the holiday season, with several additional projects underway,” said Rolando Rodriguez, chairman, president and chief executive officer of Marcus Theatres.

The five top-performing films for Marcus Theatres in the third quarter of fiscal 2018 were Incredibles 2; Jurassic World: Fallen Kingdom; Ant-Man and the Wasp; Mission Impossible – Fallout; and Hotel Transylvania 3: Summer Vacation.

Rodriguez said the fourth quarter is off to a good start with successful October films including Venom; A Star is Born; First Man; and Halloween. Additional films opening during the popular holiday season include The Nutcracker and the Four Realms; Bohemian Rhapsody; Dr. Seuss’ The Grinch; Fantastic Beasts: The Crimes of Grindelwald; Ralph Breaks the Internet: Wreck-It; Creed II; Mary Poppins Returns; Bumblebee; Aquaman; and Holmes and Watson.

Conference Call and Webcast

Marcus Corporation management will hold a conference call today, Thursday, October 25, 2018, at 10:00 a.m. Central/11:00 a.m. Eastern time to discuss the third 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 9196228. 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, November 1, 2018, by dialing 1-855-859-2056 and entering passcode 9196228. The webcast will be archived on the company’s website until its next earnings release.

About The Marcus Corporation

Headquartered in Milwaukee, 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 890 screens at 68 locations in eight states. The company’s lodging division, Marcus® Hotels & Resorts, owns and/or manages 21 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; (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; and (10) a disruption in our business and reputational and economic risks associated with civil securities claims brought by shareholders. 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)
         
13 Weeks Ended 39 Weeks Ended
Sept. 27, Sept. 28, Sept. 27, Sept. 28,

2018

2017

2018

2017

Revenues:
Theatre admissions $ 52,422 $ 50,246 $ 185,035 $ 166,222
Rooms 34,467 32,785 84,256 82,844
Theatre concessions 35,476 33,290 123,687 109,365
Food and beverage 19,333 18,670 53,972 52,487
Other revenues   19,813     18,827     59,362     53,629  
161,511 153,818 506,312 464,547
Cost reimbursements   9,088     8,557     25,776     23,424  
Total revenues 170,599 162,375 532,088 487,971
 
Costs and expenses:
Theatre operations 48,644 44,403 164,452 145,844
Rooms 10,958 10,658 31,026 30,117
Theatre concessions 10,168 9,567 35,105 30,666
Food and beverage 14,966 15,125 43,930 44,093
Advertising and marketing 6,178 6,296 17,317 17,880
Administrative 16,813 16,448 52,653 50,370
Depreciation and amortization 14,569 12,993 42,899 37,544
Rent 2,815 3,113 8,351 9,718
Property taxes 5,018 5,052 15,011 14,575
Other operating expenses 8,969 8,300 27,032 24,255
Reimbursed costs   9,088     8,557     25,776     23,424  
Total costs and expenses   148,186     140,512     463,552     428,486  
 
Operating income 22,413 21,863 68,536 59,485
 
Other income (expense):
Investment income 442 119 433 229
Interest expense (3,180 ) (3,367 ) (10,000 ) (9,454 )
Other expense (497 ) (428 ) (1,489 ) (1,284 )
Loss on disposition of property, equipment and other assets (359 ) (449 ) (767 ) (420 )
Equity earnings (losses) from unconsolidated joint ventures, net   30     (12 )   282     75  
  (3,564 )   (4,137 )   (11,541 )   (10,854 )
 
Earnings before income taxes 18,849 17,726 56,995 48,631
Income taxes   2,626     6,908     12,254     18,571  
Net earnings 16,223 10,818 44,741 30,060
Net earnings (loss) attributable to noncontrolling interests   (8 )   (160 )   70     (495 )
Net earnings attributable to The Marcus Corporation $ 16,231   $ 10,978   $ 44,671   $ 30,555  
 
Net earnings per common share attributable to
The Marcus Corporation - diluted $ 0.56 $ 0.39 $ 1.56 $ 1.08
 
Weighted average shares outstanding - diluted 28,818 28,350 28,634 28,410
 
 
THE MARCUS CORPORATION
Condensed Consolidated Balance Sheets
(In thousands)
           
(Unaudited) (Audited)
September 27, December 28,

2018

2017

 
Assets:
 
Cash, cash equivalents and restricted cash $ 12,629 $ 20,747
Accounts and notes receivable 26,006 27,230
Refundable income taxes

3,531

15,335

Other current assets 15,202 13,409
Property and equipment, net 847,137 860,064
Other assets   82,181   81,012
 
Total Assets $ 986,686 $ 1,017,797
 
Liabilities and Shareholders' Equity:
Accounts payable $ 23,108 $ 51,541
Taxes other than income taxes 17,675 19,638
Other current liabilities 63,001 68,918
Current portion of capital lease obligations 7,120 7,570
Current maturities of long-term debt 10,077 12,016
Capital lease obligations 22,989 28,282
Long-term debt 262,149 289,813
Deferred income taxes 38,374 38,233
Deferred compensation and other 59,157 56,662
Equity   483,036   445,124
 
Total Liabilities and Shareholders' Equity $ 986,686 $ 1,017,797
 
 
THE MARCUS CORPORATION
Business Segment Information
(Unaudited)
(In thousands)
       
Theatres Hotels/ Resorts Corporate Items Total
13 Weeks Ended September 27, 2018
Revenues(1) $ 95,009 $ 75,492 $ 98 $ 170,599
Operating income (loss) 14,457 12,024 (4,068 ) 22,413
Depreciation and amortization 9,867 4,616 86 14,569
 
13 Weeks Ended September 28, 2017
Revenues(1) $ 90,273 $ 71,952 $ 150 $ 162,375
Operating income (loss) 15,861 9,659 (3,657 ) 21,863
Depreciation and amortization 8,399 4,512 82 12,993
 
39 Weeks Ended September 27, 2018
Revenues(1) $ 333,397 $ 198,373 $ 318 $ 532,088
Operating income (loss) 66,317 15,737 (13,518 ) 68,536
Depreciation and amortization 28,751 13,890 258 42,899
 
39 Weeks Ended September 28, 2017
Revenues(1) $ 296,636 $ 190,903 $ 432 $ 487,971
Operating income (loss) 58,576 12,803 (11,894 ) 59,485
Depreciation and amortization 24,000 13,270 274 37,544
 
 
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.
 
(1) Revenues include cost reimbursements of $9,088 for the 13 weeks ended September 27, 2018 (Theatres - $218, Hotels/Resorts - $8,870), $8,557 for the 13 weeks ended September 28, 2017 (Theatres - $500, Hotels/Resorts - $8,057), $25,776 for the 39 weeks ended September 27, 2018 (Theatres - $1,084, Hotels/Resorts - $24,692) and $23,424 for the 39 weeks ended September 28, 2017 (Theatres - $1,659, Hotels/Resorts - $21,765).

The Marcus Corporation
Douglas A. Neis
(414) 905-1100

Source: The Marcus Corporation