The Marcus Corporation Reports First Quarter Fiscal 2023 Results
Revenue Growth In Both Divisions; Theatres Division Drives Strong Overall Results Improvement
“Our reported first quarter fiscal 2023 results marked a significant improvement over the same period last year, with increased revenues from both divisions contributing to our performance,” said Gregory S. Marcus, president and chief executive officer of The Marcus Corporation. “Marcus Theatres’ strong results were bolstered by a meaningful increase in the number of exclusively theatrical wide release films during the quarter, while “Avatar: The Way of Water” continued its impressive run. As anticipated, travel was seasonally slower over the winter months, but Marcus Hotels & Resorts is well prepared for the coming busy spring and summer travel season. We are highly optimistic about the many opportunities ahead and are confident our movie theatres, hotels, resorts and restaurants are well positioned to capture strengthening seasonal demand in both businesses.”
First Quarter Fiscal 2023 Highlights
-
Total revenues for the first quarter of fiscal 2023 were
$152.3 million 15.1% increase from total revenues of$132.2 million
-
Operating loss was
$9.0 million $16.8 million
-
Net loss attributable to The Marcus Corporation was
$9.5 million $14.9 million
-
Net loss per diluted common share attributable to The Marcus Corporation was
$0.31 $0.48
-
Adjusted EBITDA was
$9.5 million 182.2% increase compared to Adjusted EBITDA of$3.4 million
With an increasing number of new high quality, wide release films introduced during the quarter, along with the continued success of “Avatar: The Way of Water,” same store attendance increased
“The first quarter of fiscal 2023 saw a larger slate of exciting films that outperformed expectations,” said Mark A. Gramz, president of Marcus Theatres. “Attendance in the first quarter of fiscal 2023 was driven not only by several blockbusters, but also by multiple small to mid-sized films that appealed to diverse audiences, like ‘M3GAN,’ ‘A Man Called Otto,’ and ‘Cocaine Bear.’ We are pleased with the growing pace and quality of releases and join the chorus of voices who understand the importance of an exclusive theatrical release to the success of new films. As we look ahead, we are well prepared to capitalize on the upcoming spring and summer season thanks to the incredible sound, premium large format screens and recliner seating in our theatres, enticing food and beverage offerings, and consumer friendly technology that makes the irreplaceable movie-going experience even more enjoyable.”
Marcus Theatres’ top five highest-performing films in the first quarter of fiscal 2023 were “Avatar: The Way of Water,” “Ant-Man and the Wasp: Quantumania,” “Creed III,” “Puss in Boots: The Last Wish,” and “M3GAN.” Each of these films debuted with an exclusive theatrical window. Gramz noted that several films have performed well in the early part of the second quarter of fiscal 2023, including “Creed III,” “Scream VI,” “Air,” “John Wick: Chapter 4,” “Dungeons & Dragons: Honor Among Thieves,” “Evil Dead Rise,” and the incredibly popular “The Super Mario Bros. Movie.”
At the end of the first quarter of fiscal 2023, Marcus Theatres introduced its new Value Tuesday promotion across the circuit featuring
Revenue per available room (RevPAR) increased at all company-owned properties during the first quarter of fiscal 2023 compared to the same period the year prior. Revenues before cost reimbursements also increased during the first quarter of fiscal 2023 compared to the prior year period, but operating income was negatively impacted by the sale of the Skirvin Hilton in the prior quarter and due to increased staffing levels compared to the first quarter of last year, when labor shortages limited staffing at the hotels. The improved staffing levels in the first quarter of fiscal 2023 have resulted in significant increases in guest satisfaction scores compared to the prior year.
“The first quarter is traditionally our weakest quarter given the slower winter travel season in our Midwest markets. In addition, low snowfall totals impacted the normally popular ski season at the Grand Geneva Resort & Spa, contributing to lower-than-expected revenues,” said Michael R. Evans, president of Marcus Hotels & Resorts. “While we cannot control the weather, we remain focused on driving operational excellence in all facets of our business, as well as strategically managing our portfolio and seeking growth opportunities. Our division and our properties are well positioned to continue our historically strong performance thanks to our strong team and enviable market positions.”
Despite some softness in weekday leisure travel and slow growth in business travel, during the first quarter of fiscal 2023 occupancy increased for the overall owned hotel portfolio and average daily rate increased at all owned hotels compared to the prior year. Group travel continues to grow, especially mid-week, and group booking pace for fiscal 2023 is running ahead of the same period last year. Weekend business also continues to be strong.
Marcus Hotels & Resorts announced the anticipated completion of the renovation and redesign of Grand Geneva’s 358 guest rooms by the end of May 2023, the third investment in a series of recent extensive renovations for the 1,300-acre resort.
Balance Sheet and Liquidity
The Marcus Corporation’s financial position remains strong with
Conference Call and Webcast
The Marcus Corporation management will hold a conference call today, Thursday, May 4, 2023, at 10:00 a.m. Central/11:00 a.m. Eastern time. Interested parties may listen to the call live on the internet through the investor relations section of the company's website: investors.marcuscorp.com, or by dialing 1-404-975-4839 and entering the passcode 173862. 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, May 11, 2023, by dialing 1-866-813-9403 and entering passcode 162378. The webcast will be archived on the company’s website until its next earnings release
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 The Marcus Corporation before investment income or loss, interest expense, other expense, gain or loss on disposition of property, equipment and other assets, equity earnings or losses from unconsolidated joint ventures, net earnings or losses attributable to noncontrolling interests, income taxes and depreciation and amortization, adjusted to eliminate the impact of certain items that the company does not consider indicative of its core operating performance. A reconciliation of this measure to the equivalent measure under GAAP, along with reconciliations of this measure for each of our operating segments, are set forth in the attached table.
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 The Marcus Corporation
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 the COVID-19 pandemic, or future pandemics, may have 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 availability, in terms of both quantity and audience appeal, of motion pictures for our theatre division (particularly following the COVID-19 pandemic, during which the release dates for certain motion pictures have been postponed); (3) the effects of theatre 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; (5) the effects of adverse economic conditions 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 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
THE MARCUS CORPORATION
Consolidated Statements of Earnings (Loss) (Unaudited) (in thousands, except per share data) |
|||||||
|
13 Weeks Ended |
||||||
|
March 30,
|
|
March 31,
|
||||
Revenues: |
|
|
|
||||
Theatre admissions |
$ |
47,635 |
|
|
$ |
38,417 |
|
Rooms |
|
17,857 |
|
|
|
17,430 |
|
Theatre concessions |
|
42,375 |
|
|
|
35,464 |
|
Food and beverage |
|
15,193 |
|
|
|
14,511 |
|
Other revenues |
|
19,688 |
|
|
|
18,807 |
|
|
|
142,748 |
|
|
|
124,629 |
|
Cost reimbursements |
|
9,528 |
|
|
|
7,613 |
|
Total revenues |
|
152,276 |
|
|
|
132,242 |
|
|
|
|
|
||||
Costs and expenses: |
|
|
|
||||
Theatre operations |
|
51,069 |
|
|
|
44,428 |
|
Rooms |
|
9,278 |
|
|
|
8,203 |
|
Theatre concessions |
|
15,730 |
|
|
|
15,193 |
|
Food and beverage |
|
13,568 |
|
|
|
12,140 |
|
Advertising and marketing |
|
5,065 |
|
|
|
4,481 |
|
Administrative |
|
19,851 |
|
|
|
19,081 |
|
Depreciation and amortization |
|
15,876 |
|
|
|
17,231 |
|
Rent |
|
6,493 |
|
|
|
6,250 |
|
Property taxes |
|
4,757 |
|
|
|
4,745 |
|
Other operating expenses |
|
10,049 |
|
|
|
9,674 |
|
Reimbursed costs |
|
9,528 |
|
|
|
7,613 |
|
Total costs and expenses |
|
161,264 |
|
|
|
149,039 |
|
|
|
|
|
||||
Operating loss |
|
(8,988 |
) |
|
|
(16,797 |
) |
|
|
|
|
||||
Other income (expense): |
|
|
|
||||
Investment income (loss) |
|
260 |
|
|
|
(268 |
) |
Interest expense |
|
(3,008 |
) |
|
|
(4,092 |
) |
Other income (expense) |
|
(401 |
) |
|
|
(153 |
) |
Equity losses from unconsolidated joint ventures |
|
(171 |
) |
|
|
(141 |
) |
|
|
(3,320 |
) |
|
|
(4,654 |
) |
|
|
|
|
||||
Loss before income taxes |
|
(12,308 |
) |
|
|
(21,451 |
) |
Income tax benefit |
|
(2,842 |
) |
|
|
(6,549 |
) |
Net loss |
|
(9,466 |
) |
|
|
(14,902 |
) |
Net earnings (loss) attributable to noncontrolling interests |
|
— |
|
|
|
— |
|
Net loss attributable to The Marcus Corporation |
$ |
(9,466 |
) |
|
$ |
(14,902 |
) |
|
|
|
|
||||
Net loss per common share attributable to |
|
|
|
||||
The Marcus Corporation - diluted |
$ |
(0.31 |
) |
|
$ |
(0.48 |
) |
|
|
|
|
||||
Weighted average shares outstanding - diluted |
|
31,572 |
|
|
|
31,445 |
|
THE MARCUS CORPORATION
Condensed Consolidated Balance Sheets (Unaudited) (In thousands) |
|||||
|
March 30,
|
|
December 29,
|
||
|
|
|
|
||
Assets: |
|
|
|
||
|
|
|
|
||
Cash and cash equivalents |
$ |
10,051 |
|
$ |
21,704 |
Restricted cash |
|
2,765 |
|
|
2,802 |
Accounts receivable |
|
19,580 |
|
|
21,455 |
Assets held for sale |
|
458 |
|
|
460 |
Other current assets |
|
20,001 |
|
|
17,474 |
Property and equipment, net |
|
707,903 |
|
|
715,765 |
Operating lease right-of-use assets |
|
191,125 |
|
|
194,965 |
Other assets |
|
89,805 |
|
|
89,973 |
|
|
|
|
||
Total Assets |
$ |
1,041,688 |
|
$ |
1,064,598 |
|
|
|
|
||
Liabilities and Shareholders' Equity: |
|
|
|
||
|
|
|
|
||
Accounts payable |
$ |
29,110 |
|
$ |
32,187 |
Taxes other than income taxes |
|
16,283 |
|
|
17,948 |
Other current liabilities |
|
67,384 |
|
|
78,787 |
Current portion of finance lease obligations |
|
2,509 |
|
|
2,488 |
Current portion of operating lease obligations |
|
14,522 |
|
|
14,553 |
Current maturities of long-term debt |
|
10,339 |
|
|
10,432 |
Finance lease obligations |
|
14,437 |
|
|
15,014 |
Operating lease obligations |
|
191,187 |
|
|
195,281 |
Long-term debt |
|
178,918 |
|
|
170,005 |
Deferred income taxes |
|
23,399 |
|
|
26,567 |
Other long-term obligations |
|
45,193 |
|
|
44,415 |
Equity |
|
448,407 |
|
|
456,921 |
|
|
|
|
||
Total Liabilities and Shareholders' Equity |
$ |
1,041,688 |
|
$ |
1,064,598 |
THE MARCUS CORPORATION
Business Segment Information (Unaudited) (In thousands) |
|||||||||||||||
|
Theatres |
|
Hotels/ Resorts |
|
Corporate Items |
|
Total |
||||||||
13 Weeks Ended March 30, 2023 |
|
|
|
|
|
|
|
||||||||
Revenues |
$ |
96,376 |
|
|
$ |
55,811 |
|
|
$ |
89 |
|
|
$ |
152,276 |
|
Operating income (loss) |
|
1,519 |
|
|
|
(5,032 |
) |
|
|
(5,475 |
) |
|
|
(8,988 |
) |
Depreciation and amortization |
|
11,488 |
|
|
|
4,301 |
|
|
|
87 |
|
|
|
15,876 |
|
Adjusted EBITDA |
|
13,803 |
|
|
|
(410 |
) |
|
|
(3,935 |
) |
|
|
9,458 |
|
|
|
|
|
|
|
|
|
||||||||
13 Weeks Ended March 31, 2022 |
|
|
|
|
|
|
|
||||||||
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 |
|
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 |
|
March 30,
|
|
March 31,
|
||||
Net cash flow provided by (used in) operating activities |
|
$ |
(7,734 |
) |
|
$ |
6,471 |
|
Net cash flow provided by (used in) investing activities |
|
|
(9,531 |
) |
|
|
(3,103 |
) |
Net cash flow provided by (used in) financing activities |
|
|
5,575 |
|
|
|
(3,169 |
) |
Capital expenditures |
|
|
(8,921 |
) |
|
|
(6,562 |
) |
THE MARCUS CORPORATION
Reconciliation of Net earnings (loss) to Adjusted EBITDA (Unaudited) (In thousands) |
|||||||
|
13 Weeks Ended |
||||||
|
March 30,
|
|
March 31,
|
||||
Net loss attributable to The Marcus Corporation |
$ |
(9,466 |
) |
|
$ |
(14,902 |
) |
Add (deduct): |
|
|
|
||||
Investment (income) loss |
|
(260 |
) |
|
|
268 |
|
Interest expense |
|
3,008 |
|
|
|
4,092 |
|
Other expense (income) |
|
401 |
|
|
|
577 |
|
(Gain) loss on disposition of property, equipment and other assets |
|
398 |
|
|
|
(424 |
) |
Equity losses from unconsolidated joint ventures |
|
171 |
|
|
|
141 |
|
Income tax benefit |
|
(2,842 |
) |
|
|
(6,549 |
) |
Depreciation and amortization |
|
15,876 |
|
|
|
17,231 |
|
Share-based compensation (a) |
|
2,172 |
|
|
|
2,917 |
|
Adjusted EBITDA |
$ |
9,458 |
|
|
$ |
3,351 |
|
Reconciliation of Operating income (loss) to Adjusted EBITDA by Reportable Segment (Unaudited) (In thousands) |
||||||||||||||
|
13 Weeks Ended March 30, 2023 |
|||||||||||||
|
Theatres |
|
Hotels &
|
|
Corp.
|
|
Total |
|||||||
Operating income (loss) |
$ |
1,519 |
|
$ |
(5,032 |
) |
|
$ |
(5,475 |
) |
|
$ |
(8,988 |
) |
Depreciation and amortization |
|
11,488 |
|
|
4,301 |
|
|
|
87 |
|
|
|
15,876 |
|
Loss (gain) on disposition of property, equipment and other assets |
|
323 |
|
|
75 |
|
|
|
— |
|
|
|
398 |
|
Share-based compensation (a) |
|
473 |
|
|
246 |
|
|
|
1,453 |
|
|
|
2,172 |
|
Adjusted EBITDA |
$ |
13,803 |
|
$ |
(410 |
) |
|
$ |
(3,935 |
) |
|
$ |
9,458 |
|
|
13 Weeks Ended March 31, 2022 |
||||||||||||||
|
Theatres |
|
Hotels &
|
|
Corp.
|
|
Total |
||||||||
Operating loss |
$ |
(8,020 |
) |
|
$ |
(2,974 |
) |
|
$ |
(5,803 |
) |
|
$ |
(16,797 |
) |
Depreciation and amortization |
|
12,191 |
|
|
|
4,950 |
|
|
|
90 |
|
|
|
17,231 |
|
Share-based compensation (a) |
|
608 |
|
|
|
408 |
|
|
|
1,901 |
|
|
|
2,917 |
|
Adjusted EBITDA |
$ |
4,779 |
|
|
$ |
2,384 |
|
|
$ |
(3,812 |
) |
|
$ |
3,351 |
|
(a) |
Non-cash charges related to share-based compensation programs. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230503006062/en/
Chad
(414) 905-1036
investors@marcuscorp.com
Source: The Marcus Corporation
