MCS
$38.35
Marcus
$.10
.26%
Earnings Details
2nd Quarter June 2018
Thursday, July 26, 2018 7:45:00 AM
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Summary

Marcus (MCS) Recent Earnings

Marcus (MCS) reported 2nd Quarter June 2018 earnings of $0.65 per share on revenue of $193.3 million. The consensus earnings estimate was $0.58 per share on revenue of $175.8 million. Revenue grew 26.5% on a year-over-year basis.

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

Results
Reported Earnings
$0.65
Earnings Whisper
-
Consensus Estimate
$0.58
Reported Revenue
$193.3 Mil
Revenue Estimate
$175.8 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

The Marcus Corporation Reports Record Revenues, Operating Income and Earnings for the Second Quarter of Fiscal 2018

Marcus Theatres® achieves best quarter on record; significantly outperformed the industry

MILWAUKEE--(BUSINESS WIRE)-- The Marcus Corporation (NYSE: MCS) today reported record revenues, operating income and net earnings for the second quarter of fiscal 2018 ended June 28, 2018.

Second Quarter Fiscal 2018 Highlights

  • Total revenues for the second quarter of fiscal 2018 were a record $193,298,000, a 20.7% increase from revenues of $160,140,000 for the second quarter of fiscal 2017.
  • Operating income for the second quarter of fiscal 2018 was a record $29,107,000, a 51.8% increase from operating income of $19,169,000 for the second quarter of fiscal 2017.
  • Net earnings attributable to The Marcus Corporation were a record $18,619,000 for the second quarter of fiscal 2018, an 83.9% increase from net earnings attributable to The Marcus Corporation of $10,124,000 for the second quarter of fiscal 2017.
  • Net earnings per diluted common share attributable to The Marcus Corporation were a record $0.65 for the second quarter of fiscal 2018, an 80.6% increase from net earnings per diluted common share attributable to The Marcus Corporation of $0.36 for the second quarter of fiscal 2017.

First Half Fiscal 2018 Highlights

  • Total revenues for the first half of fiscal 2018 were a record $361,489,000, an 11.0% increase from revenues of $325,596,000 for the first half of fiscal 2017.
  • Operating income was a record $46,123,000 for the first half of fiscal 2018, a 22.6% increase from operating income of $37,622,000 for the first half of fiscal 2017.
  • Net earnings attributable to The Marcus Corporation were a record $28,440,000 for the first half of fiscal 2018, a 45.3% increase from net earnings attributable to The Marcus Corporation of $19,577,000 for the first half of fiscal 2017.
  • Net earnings per diluted common share attributable to The Marcus Corporation were a record $1.00 for the first half of fiscal 2018, a 44.9% increase from net earnings per diluted common share attributable to The Marcus Corporation of $0.69 for the first half of fiscal 2017.

“The second quarter of 2018 was again another record quarter for The Marcus Corporation, with record revenues, operating income and net earnings. In fact, revenues in the quarter were the highest for any quarter in our history,” said Gregory S. Marcus, president and chief executive officer of The Marcus Corporation. “Not only did Marcus Theatres achieve its best quarter on record with significant increases in both revenues and operating income, it also considerably outperformed the industry, which also had a record quarter. While our theatre division drove our strong second quarter performance, revenues and operating income also improved for Marcus Hotels & Resorts.

“We are pleased to have had such a strong first half of the year, achieving two consecutive record quarters. Net earnings again benefitted from a lower income tax rate, which we expect will continue to positively impact the company over the long-term,” said Marcus.

Marcus Theatres®

Marcus Theatres reported its strongest quarter on record, with a 33.0% increase in revenues and a 54.9% increase in operating income for the second quarter of 2018 compared to the prior year period. The division outperformed the change in national box office revenues by more than 10 percentage points compared to the same corresponding weeks in the prior year, according to Rentrak.

“This was an exceptional quarter for Marcus Theatres, driven by both a blockbuster film slate and continued operational excellence across our circuit,” said Rolando Rodriguez, chairman, president and chief executive officer of Marcus Theatres. “The division far outperformed the industry thanks in part to a strong consumer response to the significant investments we have made to our theatres over the past year. This is especially true at our Marcus Wehrenberg theatres, which significantly outperformed the industry, according to Rentrak, and continues to meaningfully contribute to our results.”

Investments during the second quarter include adding the division’s signature DreamLoungerSM recliner seating to four existing locations, with additional DreamLounger upgrades currently underway at two more locations. In addition, the division converted an additional five auditoriums to its UltraScreen DLX® and SuperScreen DLX® formats, and added two new Zaffiro’s® Express locations and one new Take FiveSM Lounge during the quarter. Preliminary work at Marcus Theatres’ second BistroPlexSM location in Brookfield, Wisconsin has begun.

“As expected, the summer film slate included a number of highly anticipated movies, including several blockbusters that were very well received by movie-goers,” said Rodriguez. “We significantly outperformed the industry as a result of our strong movie slate, innovative operating and marketing strategies, successful loyalty program and continued focus on creating the ultimate movie going experience, with DreamLounger recliners, premium large format screens and exciting food and beverage concepts.”

The five top-performing films for Marcus Theatres in the second quarter of fiscal 2018 were Avengers: Infinity War; Incredibles 2; Deadpool 2; Solo: A Star Wars Story and A Quiet Place.

Rodriguez said the third quarter is off to a good start, thanks to the continued success of Incredibles 2 and Jurassic World: Fallen Kingdom, as well as recently opened films such as Ant-Man and the Wasp; Skyscraper; Hotel Transylvania 3: Summer Vacation; Mamma Mia! Here We Go Again and The Equalizer 2. Additional films opening through the end of the third quarter include Mission-Impossible: Fallout; Christopher Robin; The Meg; Crazy Rich Asians; The Nun; The Predator; and The House with a Clock in Its Walls.

Marcus® Hotels & Resorts

Marcus Hotels & Resorts’ revenue per available room (RevPAR) for comparable company-owned properties was essentially even in the second quarter. “Increased food and beverage revenues, higher management fees and improved operating margins were the primary contributors to the division’s improved second quarter results,” said Marcus. He noted that the prior year’s results included preopening expenses and startup losses related to the opening of the SafeHouse® Chicago, which is now fully operational.

During the quarter, the division announced that it has assumed management of the DoubleTree by Hilton Hotel El Paso Downtown in El Paso, Texas. It will also assume management of the newly constructed Courtyard by Marriott El Paso Downtown/Convention Center later this summer. This will bring Marcus Hotels & Resorts’ portfolio to 21 owned and/or managed properties across the country.

In May 2018, the division also announced that it has selected two nationally recognized firms to lead the reinvention of the 221-room InterContinental Milwaukee into an immersive arts-focused hotel, which is scheduled to be completed in mid-2019.

Conference Call and Webcast

Marcus Corporation management will hold a conference call today, Thursday, July 26, 2018, at 10:00 a.m. Central/11:00 a.m. Eastern time to discuss the second 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 2180519. 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, August 2, 2018, by dialing 1-855-859-2056 and entering passcode 2180519. 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 20 hotels, resorts and other properties in nine states, with another property opening in El Paso, Texas during the summer of 2018. 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 26 Weeks Ended
June 28, June 29, June 28, June 29,

2018

2017

2018

2017

Revenues:
Theatre admissions $ 69,607 $ 52,135 $ 132,613 $ 115,976
Rooms 29,118 29,125 49,789 50,059
Theatre concessions 46,798 35,179 88,211 76,075
Food and beverage 18,836 18,777 34,639 33,817
Other revenues   20,023     17,559     39,549     34,802  
184,382 152,775 344,801 310,729
Cost reimbursements   8,916     7,365     16,688     14,867  
Total revenues 193,298 160,140 361,489 325,596
 
Costs and expenses:
Theatre operations 61,153 46,756 115,808 101,441
Rooms 10,567 10,261 20,068 19,459
Theatre concessions 12,976 9,981 24,937 21,099
Food and beverage 14,899 15,501 28,964 28,968
Advertising and marketing 6,025 6,022 11,139 11,584
Administrative 18,558 17,393 35,840 33,922
Depreciation and amortization 14,426 12,303 28,330 24,551
Rent 2,585 3,332 5,536 6,605
Property taxes 4,779 4,445 9,993 9,523
Other operating expenses 9,307 7,612 18,063 15,955
Reimbursed costs   8,916     7,365     16,688     14,867  
Total costs and expenses   164,191     140,971     315,366     287,974  
 
Operating income 29,107 19,169 46,123 37,622
 
Other income (expense):
Investment income (loss) 27 38 (9 ) 110
Interest expense (3,511 ) (3,163 ) (6,820 ) (6,087 )
Other expense (496 ) (428 ) (992 ) (856 )
Gain (loss) on disposition of property, equipment and other assets (408 ) 428 (408 ) 29
Equity earnings from unconsolidated joint ventures, net   200     32     252     87  
  (4,188 )   (3,093 )   (7,977 )   (6,717 )
 
Earnings before income taxes 24,919 16,076 38,146 30,905
Income taxes   6,207     5,951     9,628     11,663  
Net earnings 18,712 10,125 28,518 19,242
Net earnings (loss) attributable to noncontrolling interests   93     1     78     (335 )
Net earnings attributable to The Marcus Corporation $ 18,619   $ 10,124   $ 28,440   $ 19,577  
 
Net earnings per common share attributable to
The Marcus Corporation - diluted $ 0.65 $ 0.36 $ 1.00 $ 0.69
 
Weighted average shares outstanding - diluted 28,621 28,486 28,534 28,435
   
THE MARCUS CORPORATION
Condensed Consolidated Balance Sheets
(In thousands)
 
(Unaudited) (Audited)
June 28, December 28,

2018

2017

 
Assets:
 
Cash, cash equivalents and restricted cash $ 18,542 $ 20,747
Accounts and notes receivable 30,992 27,230
Refundable income taxes 3,400

 

15,335
Other current assets 14,369 13,409
Property and equipment, net 852,596 860,064
Other assets   82,327   81,012
 
Total Assets $ 1,002,226 $ 1,017,797
 
Liabilities and Shareholders' Equity:
Accounts payable $ 37,704 $ 51,541
Taxes other than income taxes 19,536 19,638
Other current liabilities 62,905 68,918
Current portion of capital lease obligations 7,262 7,570
Current maturities of long-term debt 10,065 12,016
Capital lease obligation 24,777 28,282
Long-term debt 275,321 289,813
Deferred income taxes 38,279 38,233
Deferred compensation and other 59,285 56,662
Equity   467,092   445,124
 
Total Liabilities and Shareholders' Equity $ 1,002,226 $ 1,017,797
       
THE MARCUS CORPORATION
Business Segment Information
(Unaudited)
(In thousands)
 
Theatres Hotels/ Resorts Corporate Items Total
13 Weeks Ended June 28, 2018
Revenues(1) $ 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
 
13 Weeks Ended June 29, 2017
Revenues(1) $ 94,357 $ 65,611 $ 172 $ 160,140
Operating income (loss) 17,992 5,819 (4,642 ) 19,169
Depreciation and amortization 7,808 4,401 94 12,303
 
26 Weeks Ended June 28, 2018
Revenues(1) $ 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
 
26 Weeks Ended June 29, 2017
Revenues(1) $ 206,363 $ 118,951 $ 282 $ 325,596
Operating income (loss) 42,715 3,144 (8,237 ) 37,622
Depreciation and amortization 15,601 8,758 192 24,551
 
 
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 $8,916 for the 13 weeks ended June 28, 2018 (Theatres - $387, Hotels/Resorts - $8,529), $7,365 for the 13 weeks ended June 29, 2017 (Theatres - $541, Hotels/Resorts - $6,824), $16,688 for the 26 weeks ended June 28, 2018 (Theatres - $866, Hotels/Resorts - $15,822) and $14,867 for the 26 weeks ended June 29, 2017 (Theatres - $1,159, Hotels/Resorts - $13,708).

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

Source: The Marcus Corporation