Operating income more than triples to $6.3 million
MILWAUKEE--(BUSINESS WIRE)--March 19, 2008--The Marcus Corporation
(NYSE:MCS) today reported increased revenues and operating income for
the third quarter ended February 28, 2008.
Third Quarter Fiscal 2008 Highlights
- Total revenues for the third quarter of fiscal 2008 were
$86,040,000, a 20.5 % increase from revenues of $71,418,000
for the third quarter of fiscal 2007.
- Operating income was $6,257,000 for the third quarter of
fiscal 2008, a 237.7% increase from operating income of
$1,853,000 for the same period in the prior year.
- Net earnings were $1,785,000 or $0.06 per diluted common share
for the third quarter of fiscal 2008, compared to net earnings
of $4,028,000 or $0.13 per diluted common share for the third
quarter of the prior year.
- Last year's net earnings included pre-tax gains on the
disposition of property, equipment and other assets of
$5,519,000, related primarily to development gains on the sale
of units at the company's condominium hotel project in Las
Vegas. Prior year results also benefited from historic tax
credits related to the renovation of the Skirvin Hilton in
Oklahoma City.
First Three Quarters of Fiscal 2008 Highlights
- Total revenues were $281,612,000 for the first three quarters
of fiscal 2008, a 19.6% increase from revenues of $235,430,000
for the same period in the prior year.
- Operating income was $38,410,000 for the first three quarters
of fiscal 2008, a 21.9% increase from operating income of
$31,502,000 for the same period in fiscal 2007.
- Net earnings were $16,456,000 or $0.54 per diluted common
share for the first three quarters of fiscal 2008, compared to
earnings of $27,826,000 or $0.90 per diluted common share for
the comparable prior period.
- Last year's net earnings included pre-tax gains on the
disposition of property, equipment and other assets of
$14,088,000, related to the sale of surplus movie theatre and
restaurant properties and development gains on the sale of
units at the company's condominium hotel project in Las Vegas.
Prior year results also benefited from historic tax credits
related to the renovation of the Skirvin Hilton in Oklahoma
City.
"We are pleased to report operating income up more than three-fold
over the third quarter of last year. The strong performance was driven
by solid increases in revenues and operating income in both of our
divisions for the quarter," said Stephen H. Marcus, chairman and chief
executive officer of The Marcus Corporation.
Marcus Theatres(R)
"Revenues for Marcus Theatres increased 21.3% in the third
quarter, due to a solid slate of films and the addition of 122 screens
at 11 locations acquired in April 2007 from Cinema Entertainment
Corporation (CEC). We are especially pleased with the results, given
that this year's third quarter did not include the Thanksgiving
holiday weekend, which we had last year during this quarter," said
Marcus.
Marcus said the top performing films for Marcus Theatres in the
third quarter were National Treasure: Book of Secrets, Alvin and the
Chipmunks, I Am Legend and Juno. "In addition, the Hannah
Montana/Miley Cyrus: Best of Both Worlds Concert in Digital 3D
presented at two of our theatre locations in Wisconsin was a huge
success. In response to the overwhelming demand, this run was extended
from one week to three weeks," said Marcus.
"In addition to the 3D tests at these locations, last week we
announced a test of the Thomson Technicolor Digital Cinema technology
at our theatre in Sturtevant, Wis. This digital cinema projection
system will deliver razor-sharp images and dynamic digital sound to
moviegoers and will enable a range of programming opportunities such
as live concerts, sporting events and 3D," said Marcus.
He noted that the company opened its eleventh UltraScreen(R) at an
existing 16-screen location in the Columbus, Ohio, area and purchased
a portion of the Silk Film Buying Company of Minneapolis in the third
quarter. Marcus Theatres is now providing film buying, booking and
other related services for a total of 747 motion picture screens in
six states.
"The motion picture line-up for spring and summer includes a
number of potentially strong hits. Movies that have already opened
well early in our fourth quarter include 10,000 B.C. and Dr. Seuss'
Horton Hears a Who!. Additional films opening before the end of our
fiscal year include Iron Man, Speed Racer, The Chronicles of Narnia:
Prince Caspian and Indiana Jones and the Kingdom of the Skull.
Promising films for the summer season include Sex and the City, Kung
Fu Panda, Get Smart, The Love Guru, Pixar's Wall-E, Journey to the
Center of the Earth 3D and the latest Batman film, The Dark Knight,"
said Marcus.
Marcus Hotels and Resorts
"This was also a much-improved quarter for Marcus Hotels and
Resorts. Revenues rose 19.5% in the third quarter due to new
properties opened during the past year and increased management and
development fees. Revenue per available room (RevPAR) for
company-owned properties (excluding the recently opened Skirvin
Hilton) increased 9.2% for the third quarter and 6.9% year-to-date,"
said Marcus.
Marcus said the improved performance at the company's newest
properties, the InterContinental Milwaukee, the Skirvin Hilton in
Oklahoma City and the Platinum Hotel & Spa in Las Vegas, also reflects
$1.9 million of preopening expenses in the third quarter of last year
that did not recur in the third quarter of the current year. He noted
that the Skirvin Hilton is completing its first full year of operation
and is performing very well.
"Our newest managed property, the new 256-room Hilton
Minneapolis/Bloomington in Bloomington, Minn. opened in January. This
property is in a great location in an upscale western suburb of the
Twin Cities, near the popular Mall of America. It features our fifth
ChopHouse restaurant, along with 9,200 square feet of meeting and
banquet space and the latest technology and industry amenities. The
Hilton Minneapolis/Bloomington is our 20th property and 12th
management contract, increasing our total owned or managed room count
to approximately 5,200 rooms," said Marcus.
He noted that the company-owned Four Points(R) by Sheraton Chicago
Downtown/Magnificent Mile was recently named the 2007 Four Points by
Sheraton Property of the Year. "Our hotel was selected from 125 Four
Points by Sheraton branded properties in 21 countries to be recognized
for overall excellence. When we opened this property about two years
ago, our goal was to set a new standard for service, comfort and value
in the Chicago market. This award recognizes the success we have
achieved in meeting these objectives," added Marcus.
Summary
"Along with our improved financial performance, we are continuing
to move forward with our growth strategies. Marcus Theatres is
continuing to add new UltraScreens and new technology. Marcus Hotels
and Resorts is benefitting from new properties and management
contracts added during the past year. Both of our divisions are
continuing to pursue additional growth opportunities," said Gregory S.
Marcus, recently elected president of The Marcus Corporation.
"We repurchased 383,000 shares of our common stock during the
third quarter, bringing our total number repurchased for the
year-to-date to 828,000 shares. In January, the Board authorized the
purchase of an additional 2,000,000 shares of our common stock,
extending our existing share repurchase program. We continue to
believe that repurchasing shares is a good investment for the company.
With our strong cash flow and balance sheet, we believe that when
timing and market conditions are appropriate, we can repurchase shares
to enhance shareholder value while at the same time continuing to
invest in our businesses to facilitate our long-term growth," he
added.
Conference Call and Webcast
Marcus Corporation management will host a conference call today,
March 19, 2008, at 10:00 a.m. Central/11:00 a.m. Eastern time to
discuss the third quarter results. Interested parties can listen to
the call live on the Internet through the investor relations section
of the company's Web site: www.marcuscorp.com, or by dialing
1-617-614-3529 and entering the passcode 26238872. Listeners should
dial in to the call at least 5 - 10 minutes prior to the start of the
call or should go to the Web site at least 15 minutes prior to the
call to download and install any necessary audio software. The call
will be available for telephone replay through Wednesday, March 26,
2008 by dialing 1-888-286-8010 and entering the passcode 38443087. The
Webcast of the conference call will be archived on the company's Web
site until the next earnings release.
About The Marcus Corporation
Headquartered in Milwaukee, Wis., The Marcus Corporation is a
leader in the lodging and entertainment industries. The Marcus
Corporation's movie theatre division, Marcus Theatres(R), currently
owns or manages 595 screens at 49 locations in Wisconsin, Illinois,
Minnesota, Ohio, North Dakota and Iowa, and one family entertainment
center in Wisconsin. The company's lodging division, Marcus Hotels and
Resorts, owns or manages 20 hotels, resorts and other properties in 10
states, with two additional properties under development. For more
information, visit the company's Web site at www.marcuscorp.com.
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 will 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 that could cause results to differ materially from those
expected, including, but not limited to, the following: (1) the
availability, in terms of both quantity and audience appeal, of motion
pictures for our theatre division, 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; (2) the effects of increasing
depreciation expenses and preopening and start-up costs due to the
capital intensive nature of our businesses; (3) the effects of adverse
economic conditions in our markets, particularly with respect to our
hotels and resorts division; (4) the effects of adverse weather
conditions, particularly during the winter in the Midwest and in our
other markets; (5) the effects on our occupancy and room rates from
the relative industry supply of available rooms at comparable lodging
facilities in our markets; (6) the effects of competitive conditions
in our markets; (7) our ability to identify properties to acquire,
develop and/or manage and continuing availability of funds for such
development; and (8) the adverse impact on business and consumer
spending on travel, leisure and entertainment resulting from terrorist
attacks in the United States, the United States' responses thereto and
subsequent hostilities. Shareholders, potential investors and other
readers are urged to consider these factors carefully in evaluating
the forward-looking statements and are cautioned not to place undue
reliance on such forward-looking statements. The forward-looking
statements made herein are made only as of the date of this press
release and we undertake no obligation to publicly update such
forward-looking statements to reflect subsequent events or
circumstances.
THE MARCUS CORPORATION
Consolidated Statements of Earnings
(Unaudited)
(In thousands, except per share data)
13 Weeks Ended 39 Weeks Ended
------------------------- -------------------------
February 28, February 22, February 28, February 22,
2008 2007 2008 2007
------------ ------------ ------------ ------------
Revenues:
Rooms and
telephone $ 16,358 $ 14,361 $ 71,280 $ 64,482
Theatre
admissions 29,423 23,431 87,361 71,147
Theatre
concessions 14,443 11,747 42,946 35,382
Food and beverage 13,162 10,918 42,056 34,724
Other revenues 12,654 10,961 37,969 29,695
------------ ------------ ------------ ------------
Total revenues 86,040 71,418 281,612 235,430
Costs and expenses:
Rooms and
telephone 7,959 7,282 25,973 23,578
Theatre
operations 24,681 19,585 71,626 57,605
Theatre
concessions 3,473 2,630 10,797 7,858
Food and beverage 10,794 9,648 32,571 26,826
Advertising and
marketing 4,593 4,602 14,900 14,183
Administrative 8,953 7,864 27,462 24,106
Depreciation and
amortization 7,656 6,897 23,697 19,605
Rent 1,116 795 3,539 2,473
Property taxes 3,767 2,099 10,895 7,346
Preopening
expenses 9 2,010 318 3,216
Other operating
expenses 6,782 6,153 21,424 17,132
------------ ------------ ------------ ------------
Total costs and
expenses 79,783 69,565 243,202 203,928
------------ ------------ ------------ ------------
Operating Income 6,257 1,853 38,410 31,502
Other Income
(expense):
Investment income 276 727 982 2,184
Interest expense (3,566) (3,359) (11,502) (9,836)
Gain on
disposition of
property,
equipment and
other assets 155 5,519 48 14,088
Equity earnings
(losses) from
unconsolidated
joint ventures (184) 24 (322) (1,375)
------------ ------------ ------------ ------------
(3,319) 2,911 (10,794) 5,061
------------ ------------ ------------ ------------
Earnings from
continuing
operations before
income taxes 2,938 4,764 27,616 36,563
Income taxes 1,153 510 11,160 8,338
------------ ------------ ------------ ------------
Earnings from
continuing
operations 1,785 4,254 16,456 28,225
Losses from
discontinued
operations, net of
income taxes - (226) - (399)
------------ ------------ ------------ ------------
Net earnings $ 1,785 $ 4,028 $ 16,456 $ 27,826
============ ============ ============ ============
Earnings per common
share - diluted:
Continuing
operations $ 0.06 $ 0.14 $ 0.54 $ 0.91
Discontinued
operations $ - $ (0.01) $ - $ (0.01)
------------ ------------ ------------ ------------
Net earnings per
share $ 0.06 $ 0.13 $ 0.54 $ 0.90
============ ============ ============ ============
Weighted average
shares outstanding
- diluted 29,823 30,872 30,372 30,805
THE MARCUS CORPORATION
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited) (Audited)
February 28, May 31,
2008 2007
------------ ------------
Assets:
Cash and cash equivalents $ 9,503 $ 12,018
Cash held by intermediaries 811 5,749
Accounts and notes receivable 18,145 19,956
Refundable income taxes 354 5,939
Deferred income taxes 552 1,056
Condominium units held for sale 6,948 7,320
Other current assets 5,376 6,340
Assets of discontinued operations - 975
Property and equipment, net 552,221 559,785
Other assets 76,751 79,245
------------ ------------
Total Assets $ 670,661 $ 698,383
============ ============
Liabilities and Shareholders' Equity:
Accounts and notes payable $ 14,052 $ 24,481
Taxes other than income taxes 11,595 11,215
Other current liabilities 33,584 31,466
Current maturities of long-term debt 31,904 57,250
Liabilities of discontinued operations - 2,731
Long-term debt 211,012 199,425
Deferred income taxes 28,924 29,376
Deferred compensation and other 24,415 22,930
Shareholders' equity 315,175 319,509
------------ ------------
Total Liabilities and Shareholders' Equity $ 670,661 $ 698,383
============ ============
THE MARCUS CORPORATION
Business Segment Information
(Unaudited)
(In thousands)
Con-
tinuing Dis-
Cor- Opera- continued
Hotels/ porate tions Opera-
Theatres Resorts Items Total tions Total
-------- --------- -------- --------- --------- --------
13 Weeks Ended
February 28,
2008
Revenues $ 46,116 $ 39,554 $ 370 $ 86,040 - $ 86,040
Operating
income (loss) 8,852 (347) (2,248) 6,257 - 6,257
Depreciation
and
amortization 3,754 3,736 166 7,656 - 7,656
13 Weeks Ended
February 22,
2007
Revenues $ 38,026 $ 33,112 $ 280 $ 71,418 $ 245 $ 71,663
Operating
income (loss) 8,281 (4,236) (2,192) 1,853 3 1,856
Depreciation
and
amortization 3,079 3,647 171 6,897 - 6,897
39 Weeks Ended
February 28,
2008
Revenues $137,298 $143,251 $ 1,063 $281,612 - $281,612
Operating
income (loss) 28,532 16,719 (6,841) 38,410 - 38,410
Depreciation
and
amortization 11,216 11,969 512 23,697 - 23,697
39 Weeks Ended
February 22,
2007
Revenues $112,543 $121,977 $ 910 $235,430 $3,935 $239,365
Operating
income (loss) 25,289 12,916 (6,703) 31,502 15 31,517
Depreciation
and
amortization 8,715 10,304 586 19,605 12 19,617
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.
CONTACT: The Marcus Corporation
Douglas A. Neis
(414) 905-1100
SOURCE: The Marcus Corporation