The Marcus Corporation Reports First Quarter Fiscal 2022 Results
The Marcus Corporation (NYSE: MCS) reported significant progress in Q1 fiscal 2022, achieving total revenues of $132.2 million, up from $50.8 million year-over-year. The company narrowed its operating loss to $16.8 million from $35.7 million, and reduced net loss to $14.9 million ($0.48 per diluted share) compared to $28.1 million ($0.93 per share) in Q1 fiscal 2021. Adjusted EBITDA rose to $3.4 million versus a loss of $17.5 million last year. Notably, both Marcus Theatres and Marcus Hotels reported positive trends, despite challenges from limited film releases and seasonal travel impacts.
- Total revenues increased to $132.2 million from $50.8 million year-over-year.
- Narrowed operating loss to $16.8 million from $35.7 million.
- Reduced net loss to $14.9 million, down from $28.1 million.
- Achieved positive Adjusted EBITDA of $3.4 million versus a loss of $17.5 million.
- Marcus Theatres outperformed the industry by 4.7 percentage points in admission revenues compared to pre-pandemic levels.
- Despite improvements, an operating loss of $16.8 million remains a concern.
- Net loss per diluted share is still significant at $0.48.
Company Reports Significant Improvement Over Prior Year; Both Divisions Outperform Their Industries
“Our reported results were significantly better than the same period last year with both divisions outperforming their respective industries and contributing to our third straight quarter of positive Adjusted EBITDA,” said
First Quarter Fiscal 2022 Highlights
-
Total revenues for the first quarter of fiscal 2022 were
$132.2 million $50.8 million
-
Operating loss was
$16.8 million $35.7 million
-
Net loss attributable to
The Marcus Corporation was$14.9 million The Marcus Corporation of$28.1 million
-
Net loss per diluted common share attributable to
The Marcus Corporation was$0.48 The Marcus Corporation of$0.93
-
Adjusted EBITDA was
$3.4 million $17.5 million
Adjusted EBITDA reflects an adjustment made by the company to eliminate the favorable impact of a nonrecurring state government grant during the first quarter of fiscal 2021.
Despite a limited number of films during the first quarter of fiscal 2022, which impacted revenues and operating income, the success of films such as “Spider-Man: No Way Home” and “The Batman” drove increased attendance and revenue per person during the first quarter of fiscal 2022 compared to the prior year period. As a result,
Comparing admission revenues to pre-pandemic first quarter fiscal 2019 results,
“The continued success of ‘Spider-Man: No Way Home,’ which is now the third highest performing film of all time, as well as the blockbuster debut of ‘The Batman,’ which secured the second highest box office sales since the start of the pandemic, continues to demonstrate that moviegoers are back and excited to see movies on the big screen,” said
Marcus Theatres’ top five highest-performing films in the first quarter of fiscal 2022 were “The Batman,” “Spider-Man: No Way Home,” “Uncharted,” “Sing 2” and “Scream.” Each of these films debuted with an exclusive theatrical window. With more consistent movie releases heading into the spring and summer, several films have performed well during the first few weeks of the fiscal 2022 second quarter, including “Sonic the Hedgehog 2,” “Fantastic Beasts: The Secrets of Dumbledore” and “The Bad Guys.” Films including “The Lost City” and “Everything Everywhere All at Once” have also performed well and are bringing more customer segments back to the movies. Additional highly anticipated new films scheduled to be released during the remainder of the second quarter include: “Doctor Strange in the Multiverse of Madness,” tickets for which have presold at a post-pandemic pace second only to “Spider-Man: No Way Home,” “Downton Abbey: A New Era,” “Top Gun: Maverick,” “Jurassic World: Dominion,” “Lightyear” and “The Black Phone.”
“Comparable hotel total revenues for the first quarter of fiscal 2022 were approximately 91 percent of pre-pandemic first quarter of fiscal 2019, demonstrating how far we have come in our recovery,” said
Group booking pace for fiscal 2022, while still behind pre-pandemic pace, has continued to meaningfully improve compared to prior quarters with increased bookings for 2022 and into 2023.
Balance Sheet and Liquidity
The Marcus Corporation’s financial position remains strong with
During the quarter, the company received
Retirement of
As announced on
Conference Call and Webcast
A telephone replay of the conference call will be available through
Non-GAAP Financial Measure
Adjusted EBITDA has been presented in this press release as a supplemental measure of financial performance that is not required by, or presented in accordance with, GAAP. The company defines Adjusted EBITDA as net earnings (loss) attributable to
Adjusted EBITDA is a key measure used by management and the company’s board of directors to assess the company’s financial performance and enterprise value. The company believes that Adjusted EBITDA is a useful measure, as it eliminates certain expenses and gains that are not indicative of the company’s core operating performance and facilitates a comparison of the company’s core operating performance on a consistent basis from period to period. The company also uses Adjusted EBITDA as a basis to determine certain annual cash bonuses and long-term incentive awards, to supplement GAAP measures of performance to evaluate the effectiveness of its business strategies, to make budgeting decisions, and to compare its performance against that of other peer companies using similar measures. Adjusted EBITDA is also used by analysts, investors and other interested parties as a performance measure to evaluate industry competitors.
Adjusted EBITDA is a non-GAAP measure of the company’s financial performance and should not be considered as an alternative to net earnings (loss) as a measure of financial performance, or any other performance measure derived in accordance with GAAP and it should not be construed as an inference that the company’s future results will be unaffected by unusual or non-recurring items. Additionally, Adjusted EBITDA is not intended to be a measure of liquidity or free cash flow for management’s discretionary use. In addition, this non-GAAP measure excludes certain non-recurring and other charges and has its limitations as an analytical tool. You should not consider Adjusted EBITDA in isolation or as a substitute for analysis of the company’s results as reported under GAAP. In evaluating Adjusted EBITDA, you should be aware that in the future the company will incur expenses that are the same as or similar to some of the items eliminated in the adjustments made to determine Adjusted EBITDA, such as acquisition expenses, preopening expenses, accelerated depreciation, impairment charges and other adjustments. The company’s presentation of Adjusted EBITDA should not be construed to imply that the company’s future results will be unaffected by any such adjustments. Definitions and calculations of Adjusted EBITDA differ among companies in our industries, and therefore Adjusted EBITDA disclosed by the company may not be comparable to the measures disclosed by other companies.
About
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 adverse effects of the COVID-19 pandemic on our theatre and hotels and resorts businesses, results of operations, liquidity, cash flows, financial condition, access to credit markets and ability to service our existing and future indebtedness; (2) the duration of the COVID-19 pandemic and related government restrictions and the level of customer demand following the relaxation of such requirements; (3) the availability, in terms of both quantity and audience appeal, of certain motion pictures for our theatre division (particularly following the COVID-19 pandemic, during which the release dates for motion pictures have been postponed), 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; (4) the effects of adverse economic conditions in our markets, including but not limited to, those caused by the COVID-19 pandemic; (5) the effects of adverse economic conditions, including but not limited to, those caused by the COVID-19 pandemic, on our ability to obtain financing on reasonable and acceptable terms, if at all; (6) the effects on our occupancy and room rates caused by the COVID-19 pandemic and the effects on our occupancy and room rates caused by the relative industry supply of available rooms at comparable lodging facilities in our markets; (7) the effects of competitive conditions in our markets; (8) our ability to achieve expected benefits and performance from our strategic initiatives and acquisitions; (9) 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 business; (10) the effects of changes in the availability of and cost of labor and other supplies essential to the operation of our business; (11) the effects of weather conditions, particularly during the winter in the Midwest and in our other markets; (12) our ability to identify properties to acquire, develop and/or manage and the continuing availability of funds for such development; (13) the adverse impact on business and consumer spending on travel, leisure and entertainment resulting from terrorist attacks in
|
|||||||
Consolidated Statements of Earnings (Loss) |
|||||||
(Unaudited) |
|||||||
(in thousands, except per share data) |
|||||||
|
13 Weeks Ended |
||||||
|
|
|
|
||||
Revenues: |
|
|
|
||||
Theatre admissions |
$ |
38,417 |
|
|
$ |
10,685 |
|
Rooms |
|
17,430 |
|
|
|
9,044 |
|
Theatre concessions |
|
35,464 |
|
|
|
9,919 |
|
Food and beverage |
|
14,511 |
|
|
|
5,912 |
|
Other revenues |
|
18,807 |
|
|
|
11,894 |
|
|
|
124,629 |
|
|
|
47,454 |
|
Cost reimbursements |
|
7,613 |
|
|
|
3,333 |
|
Total revenues |
|
132,242 |
|
|
|
50,787 |
|
|
|
|
|
||||
Costs and expenses: |
|
|
|
||||
Theatre operations |
|
44,428 |
|
|
|
18,270 |
|
Rooms |
|
8,203 |
|
|
|
5,265 |
|
Theatre concessions |
|
15,193 |
|
|
|
4,496 |
|
Food and beverage |
|
12,140 |
|
|
|
5,370 |
|
Advertising and marketing |
|
4,481 |
|
|
|
2,549 |
|
Administrative |
|
19,081 |
|
|
|
13,316 |
|
Depreciation and amortization |
|
17,231 |
|
|
|
17,979 |
|
Rent |
|
6,250 |
|
|
|
6,341 |
|
Property taxes |
|
4,745 |
|
|
|
4,739 |
|
Other operating expenses |
|
9,674 |
|
|
|
4,790 |
|
Reimbursed costs |
|
7,613 |
|
|
|
3,333 |
|
Total costs and expenses |
|
149,039 |
|
|
|
86,448 |
|
|
|
|
|
||||
Operating loss |
|
(16,797 |
) |
|
|
(35,661 |
) |
|
|
|
|
||||
Other income (expense): |
|
|
|
||||
Investment income (loss) |
|
(268 |
) |
|
|
40 |
|
Interest expense |
|
(4,092 |
) |
|
|
(4,843 |
) |
Other income (expense) |
|
(577 |
) |
|
|
(628 |
) |
Gain on disposition of property, equipment and other assets |
|
424 |
|
|
|
2,204 |
|
Equity losses from unconsolidated joint ventures |
|
(141 |
) |
|
|
— |
|
|
|
(4,654 |
) |
|
|
(3,227 |
) |
|
|
|
|
||||
Loss before income taxes |
|
(21,451 |
) |
|
|
(38,888 |
) |
Income tax benefit |
|
(6,549 |
) |
|
|
(10,758 |
) |
Net loss |
|
(14,902 |
) |
|
|
(28,130 |
) |
Net earnings (loss) attributable to noncontrolling interests |
|
— |
|
|
|
— |
|
Net loss attributable to |
$ |
(14,902 |
) |
|
$ |
(28,130 |
) |
|
|
|
|
||||
Net loss per common share attributable to |
|
|
|
||||
|
$ |
(0.48 |
) |
|
$ |
(0.93 |
) |
|
|
|
|
||||
Weighted average shares outstanding - diluted |
|
31,445 |
|
|
|
31,196 |
|
|
|||||
Condensed Consolidated Balance Sheets |
|||||
(In thousands) |
|||||
|
(Unaudited) |
|
(Audited) |
||
|
|
|
|
||
|
|
|
|
||
Assets: |
|
|
|
||
|
|
|
|
||
Cash and cash equivalents |
$ |
19,431 |
|
$ |
17,658 |
Restricted cash |
|
4,822 |
|
|
6,396 |
Accounts receivable |
|
21,407 |
|
|
28,902 |
Government grants receivable |
|
— |
|
|
4,335 |
Refundable income taxes |
|
— |
|
|
22,435 |
Assets held for sale |
|
1,875 |
|
|
4,856 |
Other current assets |
|
17,204 |
|
|
15,364 |
Property and equipment, net |
|
759,529 |
|
|
771,192 |
Operating lease right-of-use assets |
|
213,042 |
|
|
217,072 |
Other assets |
|
101,938 |
|
|
100,151 |
|
|
|
|
||
Total Assets |
$ |
1,139,248 |
|
$ |
1,188,361 |
|
|
|
|
||
Liabilities and Shareholders' Equity: |
|
|
|
||
|
|
|
|
||
Accounts payable |
$ |
23,784 |
|
$ |
35,781 |
Taxes other than income taxes |
|
15,658 |
|
|
19,566 |
Other current liabilities |
|
70,922 |
|
|
80,152 |
Short-term borrowings |
|
46,577 |
|
|
47,346 |
Current portion of finance lease obligations |
|
2,538 |
|
|
2,561 |
Current portion of operating lease obligations |
|
15,827 |
|
|
16,795 |
Current maturities of long-term debt |
|
11,064 |
|
|
10,967 |
Finance lease obligations |
|
16,703 |
|
|
17,192 |
Operating lease obligations |
|
211,841 |
|
|
216,064 |
Long-term debt |
|
203,905 |
|
|
204,177 |
Deferred income taxes |
|
22,103 |
|
|
26,183 |
Other long-term obligations |
|
56,548 |
|
|
57,963 |
Equity |
|
441,778 |
|
|
453,614 |
|
|
|
|
||
Total Liabilities and Shareholders' Equity |
$ |
1,139,248 |
|
$ |
1,188,361 |
|
|||||||||||||||
Business Segment Information |
|||||||||||||||
(Unaudited) |
|||||||||||||||
(In thousands) |
|||||||||||||||
|
Theatres |
|
Hotels/ Resorts |
|
Corporate Items |
|
Total |
||||||||
13 Weeks Ended |
|
|
|
|
|
|
|
||||||||
Revenues |
$ |
79,491 |
|
|
$ |
52,657 |
|
|
$ |
94 |
|
|
$ |
132,242 |
|
Operating loss |
|
(8,020 |
) |
|
|
(2,974 |
) |
|
|
(5,803 |
) |
|
|
(16,797 |
) |
Depreciation and amortization |
|
12,191 |
|
|
|
4,950 |
|
|
|
90 |
|
|
|
17,231 |
|
Adjusted EBITDA |
|
4,779 |
|
|
|
2,384 |
|
|
|
(3,812 |
) |
|
|
3,351 |
|
|
|
|
|
|
|
|
|
||||||||
13 Weeks Ended |
|
|
|
|
|
|
|
||||||||
Revenues |
$ |
22,562 |
|
|
$ |
28,125 |
|
|
$ |
100 |
|
|
$ |
50,787 |
|
Operating loss |
|
(25,639 |
) |
|
|
(5,708 |
) |
|
|
(4,314 |
) |
|
|
(35,661 |
) |
Depreciation and amortization |
|
12,786 |
|
|
|
5,127 |
|
|
|
66 |
|
|
|
17,979 |
|
Adjusted EBITDA |
|
(13,730 |
) |
|
|
(295 |
) |
|
|
(3,444 |
) |
|
|
(17,469 |
) |
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. |
| Supplemental Data | ||||||||
(Unaudited) |
||||||||
(In thousands) |
||||||||
|
|
13 Weeks Ended |
||||||
Consolidated |
|
|
|
|
||||
Net cash flow provided by (used in) operating activities |
|
$ |
6,471 |
|
|
$ |
(12,983 |
) |
Net cash flow provided by (used in) investing activities |
|
|
(3,103 |
) |
|
|
2,552 |
|
Net cash flow provided by (used in) financing activities |
|
|
(3,169 |
) |
|
|
9,246 |
|
Capital expenditures |
|
|
(6,562 |
) |
|
|
(1,525 |
) |
|
|||||||
Reconciliation of Net earnings (loss) to Adjusted EBITDA |
|||||||
(Unaudited) |
|||||||
(In thousands) |
|||||||
|
13 Weeks Ended |
||||||
|
|
|
|
||||
Net loss attributable to |
$ |
(14,902 |
) |
|
$ |
(28,130 |
) |
Add (deduct): |
|
|
|
||||
Investment (income) loss |
|
268 |
|
|
|
(40 |
) |
Interest expense |
|
4,092 |
|
|
|
4,843 |
|
Other expense (income) |
|
577 |
|
|
|
628 |
|
Gain on disposition of property, equipment and other assets |
|
(424 |
) |
|
|
(2,204 |
) |
Equity losses from unconsolidated joint ventures |
|
141 |
|
|
|
— |
|
Income tax benefit |
|
(6,549 |
) |
|
|
(10,758 |
) |
Depreciation and amortization |
|
17,231 |
|
|
|
17,979 |
|
Share-based compensation expenses (a) |
|
2,917 |
|
|
|
1,484 |
|
Government grants and federal tax credits (b) |
|
— |
|
|
|
(1,271 |
) |
Adjusted EBITDA |
$ |
3,351 |
|
|
$ |
(17,469 |
) |
(a) |
Non-cash charges related to share-based compensation programs. |
(b) |
Reflects a nonrecurring state government grant awarded to our theatres for COVID-19 pandemic relief. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220504006306/en/
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FAQ
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