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The Marcus Corporation (NYSE:MCS) reported results for the second quarter and six months ended November 24, 2005.
Second Quarter Fiscal 2006 Highlights
-- Total revenues for the second quarter of fiscal 2006 were $68,377,000, a 10.0% increase from revenues of $62,135,000 for the second quarter of the prior year.
-- Earnings from continuing operations increased 2.4% to $4,522,000 or $0.15 per diluted share for the second quarter of fiscal 2006, from earnings from continuing operations of $4,417,000 or $0.14 per diluted share for the comparable prior period.
-- Net earnings were $5,044,000 or $0.16 per diluted share for the second quarter of fiscal 2006, compared to net earnings of $71,588,000 or $2.34 per diluted share for the same period in fiscal 2005. The net earnings for the second quarter of fiscal 2005 included an after-tax gain of $71.0 million on the sale of the company's former limited-service lodging division.
-- The company's former limited-service lodging division and Miramonte Resort have been classified as discontinued operations in accordance with current accounting pronouncements.
First Half Fiscal 2006 Highlights
-- Total revenues were $156,579,000 for the first half of fiscal 2006, a 4.8% increase from revenues of $149,474,000 for the same period in the prior year.
-- Earnings from continuing operations were $16,838,000 or $0.55 per diluted share for the first half of fiscal 2006, a 7.9% increase from earnings from continuing operations of $15,603,000 or $0.52 per diluted share for the first half of fiscal 2005.
-- Net earnings were $20,533,000 or $0.67 per diluted share for the first half of fiscal 2006, compared to net earnings of $89,733,000 or $2.96 per diluted share for the comparable prior period.
"We are pleased to report our second consecutive quarter with overall increases in both revenues and earnings from continuing operations. Marcus Hotels and Resorts drove the improvement with a record second quarter. Results for Marcus Theatres were mixed, as we opened and closed the quarter with increased revenues but suffered from a stretch of lackluster movies in between," said Stephen H. Marcus, chairman and chief executive officer of The Marcus Corporation.
Marcus Hotels and Resorts
Revenue per available room (RevPAR) for comparable Marcus Hotels and Resorts properties increased 9.8% in the second quarter and 7.0% for the first half of fiscal 2006, compared to the prior year periods. "Increased demand from business travel, combined with low supply growth, is proving to be beneficial for Marcus Hotels and Resorts and the lodging industry as a whole," said Marcus.
Marcus noted that the division's two newest hotels, the Four Points by Sheraton Chicago Downtown/Magnificent Mile and the Wyndham Milwaukee Center, contributed to the increased revenues and operating income. "We are also making good progress on new properties under development. The Platinum Hotel & Spa, our luxury hotel condominium project in Las Vegas, is on track to open in June 2006. At the Skirvin Hotel in Oklahoma City, interior demolition work is currently underway, with the full-scale renovation scheduled to begin shortly," said Marcus.
"Nationally, the outlook for hotels is strong, and we expect that Marcus Hotels and Resorts will continue to benefit from the positive industry momentum," said Marcus.
Marcus Theatres(R)
Marcus Theatres reported lower revenues and operating income for the second quarter. "The quarter got off to a good start, with a stronger September than usual. Unfortunately, the October and early November film slate did not perform as well as its counterpart last year. The quarter ended on a strong note, however, with the opening of Harry Potter and the Goblet of Fire in mid-November. In addition to Harry Potter and the Goblet of Fire, other top movies for the second quarter were Chicken Little and Flightplan," said Marcus.
"The box-office potential for this holiday season is encouraging. The Chronicles of Narnia: The Lion, The Witch and The Wardrobe opened very strong this past weekend and King Kong opened yesterday to great expectations. Other potential hits opening in the next week include The Family Stone, Fun with Dick and Jane, Cheaper by the Dozen 2 and Munich, followed by the Christmas Day openings of Rumor Has It and The Producers. This mix of movies has the quality and broad appeal we need to attract audiences of all ages to our theatres," added Marcus.
Use of Proceeds from Sale of Limited-Service Lodging Division
"We are continuing our evaluation of the potential uses of the proceeds from the sale of the limited-service lodging division, including possible returns of capital to shareholders. We expect that we will have more to say on this subject shortly," said Marcus.
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