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 publications 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.
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.
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 Corporations 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 companys lodging division, Marcus® Hotels & Resorts, owns and/or manages 21 hotels, resorts and other properties in nine states.
|THE MARCUS CORPORATION|
|Consolidated Statements of Earnings|
|(in thousands, except per share data)|
|13 Weeks Ended||39 Weeks Ended|
|Sept. 27,||Sept. 28,||Sept. 27,||Sept. 28,|
|Food and beverage||19,333||18,670||53,972||52,487|
|Costs and expenses:|
|Food and beverage||14,966||15,125||43,930||44,093|
|Advertising and marketing||6,178||6,296||17,317||17,880|
|Depreciation and amortization||14,569||12,993||42,899||37,544|
|Other operating expenses||8,969||8,300||27,032||24,255|
|Total costs and expenses||148,186||140,512||463,552||428,486|
|Other income (expense):|
|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|
|Earnings before income taxes||18,849||17,726||56,995||48,631|
|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||$||1.08|
|Weighted average shares outstanding - diluted||28,818||28,350||28,634||28,410|
|THE MARCUS CORPORATION|
|Condensed Consolidated Balance Sheets|
|September 27,||December 28,|
|Cash, cash equivalents and restricted cash||$||12,629||$||20,747|
|Accounts and notes receivable||26,006||27,230|
|Refundable income taxes|| |
|Other current assets||15,202||13,409|
|Property and equipment, net||847,137||860,064|
|Liabilities and Shareholders' Equity:|
|Taxes other than income taxes||17,675||19,638|
|Other current liabilities||63,001||68,918|
|Current portion of capital lease obligations||7,120||7,570|
|Current maturities of long-term debt||10,077||12,016|
|Capital lease obligations||22,989||28,282|
|Deferred income taxes||38,374||38,233|
|Deferred compensation and other||59,157||56,662|
|Total Liabilities and Shareholders' Equity||$||986,686||$||1,017,797|
|THE MARCUS CORPORATION|
|Business Segment Information|
|Theatres||Hotels/ Resorts||Corporate Items||Total|
|13 Weeks Ended September 27, 2018|
|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|
|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|
|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|
|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).|
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