The Marcus Corporation (NYSE:MCS) today reported increased revenues and earnings for the second quarter ended November 27, 2003.
Total revenues for the second quarter of fiscal 2004 were $94,648,000, a 6.6% increase from revenues of $88,787,000 for the second quarter of the prior year. Operating income for the second quarter of fiscal 2004 was $10,737,000, up 38.5% from operating income of $7,752,000 for the comparable prior period. Earnings from continuing operations and net earnings were $4,803,000 or $0.16 per diluted share for the second quarter of fiscal 2004, an 88.2% increase from earnings from continuing operations and net earnings of $2,552,000 or $0.09 per diluted share for the second quarter of the prior year. Continuing operations include The Marcus Corporation's theatre, limited-service lodging and hotels and resorts divisions.
For the first half of fiscal 2004, total revenues were $215,443,000, a 3.4% increase from revenues of $208,364,000 for the first half of fiscal 2003. Operating income was $36,378,000 for the first half of fiscal 2004, up 10.5% from operating income of $32,907,000 for the comparable prior period. Earnings from continuing operations and net earnings were $17,748,000 or $0.60 per diluted share for the first half of fiscal 2004, an 18.9% increase from earnings from continuing operations of $14,923,000 or $0.51 per diluted share and a 10.0% increase from net earnings of $16,139,000 or $0.55 per diluted share for the same period in the prior fiscal year.
"This was a strong quarter for The Marcus Corporation. Revenues and operating income increased in all three of our divisions. Marcus Theatres(R) achieved yet another record quarter and both of our lodging divisions reported their best second quarter since fiscal 2001," said Stephen H. Marcus, chairman and chief executive officer of The Marcus Corporation.
"Marcus Theatres kicked off the quarter with a stronger than usual September, which is historically a weak month in the industry, and carried this momentum throughout the quarter," said Marcus. Top-grossing movies for the quarter were Elf, The Matrix Revolutions, Scary Movie 3, The School of Rock and Brother Bear.
"The holiday season has started very well, with Dr. Seuss' The Cat in the Hat, The Haunted Mansion, The Last Samurai and Something's Gotta Give opening strong. With the blockbuster Lord of the Rings: The Return of the King opening yesterday and potential hits such as Mona Lisa Smile, Peter Pan, Cold Mountain and Cheaper by the Dozen still to open, the third quarter is off to a good start," said Marcus.
Marcus noted that the division opened five new screens during the quarter. A four-screen addition opened at the company's theatre in Menomonee Falls, Wisconsin, and one screen was added in Madison, Wisconsin. In addition, a new six-screen theatre in Tomah, Wisconsin, that the company is managing for the Ho-Chunk Indian Nation, opened on December 12. This is the division's second management contract. Marcus Theatres also manages 34 screens at three theatres in Chicago.
"On the lodging side, strong leisure travel benefited both of our lodging divisions throughout the quarter. In addition, Marcus Hotels and Resorts benefited from an improvement in corporate group business. The Harley-Davidson 100th Anniversary celebration contributed to an especially strong September for our Milwaukee-area hotels and inns," said Marcus.
Marcus Hotels and Resorts achieved significant increases in both revenues and operating income in the second quarter, with revenue per available room (RevPAR) up 15.9% for the period. Marcus said the division's strong performance was due to the increase in group and business travel, along with continued improvement at the company's newest properties.
Marcus noted that construction continues on a new destination spa at the Miramonte Resort in Indian Wells, California, which is expected to open in early calendar 2004. "We also continue to pursue additional opportunities to increase the total number of rooms managed by this division," said Marcus.
Baymont Inns & Suites reported a slight increase in revenues and a substantial increase in operating income for the second quarter. RevPAR for comparable properties increased 0.3% in the second quarter.
"The division's increased operating income reflected a strong focus on expense management, improved performance at its Woodfield Suites properties and increased franchise revenues. Our newest Baymont Inn & Suites, a joint venture property located in Ontario, California, opened during the quarter and is performing extremely well. We are very pleased with this entry into the greater Los Angeles market, which expands the Baymont Inns & Suites brand to the West Coast," said Marcus.
"We are encouraged by the upward trend in the economy, the improved results of our lodging businesses and our ability to continue to leverage good film product into strong performance in our theatre division. While the pricing environment in the limited service sector continues to be competitive and our hotels and resorts properties are still experiencing relatively short lead times on advanced bookings, the pace of our long-term bookings has been steadily improving. We believe we are positioned to build on the momentum of the first half of the year as the economy continues to rebound," said Marcus.
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