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EX-99.1 - EXHIBIT 99.1 - MARCUS CORPv432571_ex99-1.htm
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Exhibit 99.2

 

Change in Fiscal Year End February 24, 2016

 
 

Special Note Regarding Forward Looking Statements 2 Certain matters discussed in this Presentation 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 availability, i n 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 adverse economic conditions in our markets, particularly with respect to our hotels and resorts division; (3) the effects on our occupancy and room rates of the relative industry supply of available rooms at comparable lodging facilities in our markets; (4) the effects of competitive conditions in our markets; (5) our ability to achieve expected benefits and performance from our strategic initiatives and acquisitions; (6) 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 businesses; (7) the effects of adverse weather conditions, particularly during the winter in the Midwest and in our other markets; (8) our ability to identify properties to acquire, develop and/or manage and the continuing availability of funds for such development; and (9) the adverse impact on business and consumer spending on travel, leisure and entertainment resulting from terrorist attacks in the United States or other incidents of violence in public venues such as hotels and movie theatres. 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 Presentation and we undertake no obligation to publicly update such forward - looking statements to reflect subsequent events or circumstances.

 
 

Transitioning Fiscal Year End from May to December • The Marcus Corporation (MCS) changed its fiscal year end from the last Thursday in May to the last Thursday in December. – Better aligns the company’s financial reporting schedule with the peer groups in its industries. – Moves the company’s year - end closing activities outside of its busy summer season, enabling its associates to better manage their workload. 3

 
 

Transitioning Fiscal Year End from May to December • On February 24, 2016, the company reported its results for the 31 - week transition period from May 29, 2015 to December 31, 2015 ( the “Transition Period”), consisting of two 13 - week periods ended on August 27, 2015 and November 26, 2015 and a final 5 - week period ended on December 31, 2015. • Results from the T ransition P eriod will be compared to a 30 - week period from May 30, 2014 to December 25, 2014, consisting of two 13 - week periods ended on August 28, 2014 and November 27, 2014 and a final 4 - week period ended on December 25, 2014. • Fiscal 2016 will be a 52 - week period from January 1, 2016 to December 29, 2016. 4

 
 

Impact of Extra Week 5 • The T ransition P eriod benefited from an additional 31 st week of operations compared to the prior year 30 - week period. This additional week included the traditionally strong week for movie theatres between Christmas and New Year’s Eve. • The company estimates that the 31 st week during the Transition Period contributed approximately $17.4 million in revenues ($14.4 million - Theatres, $3.0 million - Hotels) and $6.2 million in operating income ($5.7 million – Theatres, $0.7 million – Hotels, $(0.2) million - Corporate) to its reported financial results. • After interest expense and income taxes, the company estimates that the 31 st week of operations during the Transition Period contributed approximately $3.6 million to net earnings, or $ 0.13 per diluted common share .

 
 

Comparative Financial Information 6 • The company has prepared the following unaudited financial information to assist investors in evaluating the impact the change in fiscal year may have on its future quarterly and annual operating results : – Consolidated Statements of Earnings for the 52 weeks Ended December 25, 2014, including applicable interim periods and selected segment information. – Consolidated Statements of Earnings for the 53 weeks Ended December 31, 2015, including applicable interim periods and selected segment information. • Actual results for the comparable periods in fiscal 2016 could differ materially from those experienced in the prior year periods and reflected in the above - described unaudited historical financial information. – The recast 14 - week 4 th quarter of the 2015 period included the benefits of the extra week described earlier. The 4 th quarter of fiscal 2016 will be a 13 - week period ending on December 29, 2016 (New Year’s Eve results will not be included in our fiscal 2016). – The recast 13 - week 1 st quarter of the 2015 period included the week between Christmas and New Year’s Eve because the 2014 period ended on December 25, 2014. As a result, comparisons of the 13 - week fiscal 2016 1 st quarter to the unaudited recast 13 - week 1 st quarter of 2015 will likely be negatively impacted by the fact that the fiscal 2016 period will not include the strong week between Christmas and New Year’s Eve.

 
 

 

THE MARCUS CORPORATION

Consolidated Statements of Earnings

Comparative Info - 52 Weeks Ended December 25, 2014 (Unaudited)

 

   13 Weeks Ended   52 Weeks Ended 
(in thousands, except per share data)  March 27,   June 26,   Sept. 25,   Dec. 25,   Dec. 25, 
   2014   2014   2014   2014   2014 
Revenues:                         
  Theatre admissions  $37,328   $38,362   $34,842   $37,456   $147,988 
  Rooms   21,201    28,609    33,684    25,452    108,946 
  Theatre concessions   21,745    22,745    21,433    23,680    89,603 
  Food and beverage   13,382    15,419    15,654    20,199    64,654 
  Other revenues   13,443    13,433    14,317    11,832    53,025 
Total revenues   107,099    118,568    119,930    118,619    464,216 
                          
Costs and expenses:                         
  Theatre operations   33,579    33,212    30,581    31,490    128,862 
  Rooms   9,887    10,620    11,470    10,186    42,163 
  Theatre concessions   6,056    6,369    5,859    6,660    24,944 
  Food and beverage   11,485    11,784    11,826    16,607    51,702 
  Advertising and marketing   5,709    6,573    6,871    6,854    26,007 
  Administrative   11,931    11,498    12,490    12,843    48,762 
  Depreciation and amortization   8,273    8,979    9,218    10,234    36,704 
  Rent   2,153    2,130    2,181    2,125    8,589 
  Property taxes   4,210    3,291    3,888    3,568    14,957 
  Other operating expenses   8,443    8,167    8,947    8,154    33,711 
Total costs and expenses   101,726    102,623    103,331    108,721    416,401 
                          
Operating income   5,373    15,945    16,599    9,898    47,815 
                          
Other income (expense):                         
  Investment income   385    236    26    21    668 
  Interest expense   (2,580)   (2,433)   (2,378)   (2,410)   (9,801)
  Gain (loss) on disposition of property, equipment and other assets   (10)   (41)   111    (817)   (757)
  Equity earnings (losses) from unconsolidated joint ventures, net   (144)   (41)   23    (93)   (255)
    (2,349)   (2,279)   (2,218)   (3,299)   (10,145)
                          
Earnings before income taxes   3,024    13,666    14,381    6,599    37,670 
Income taxes   2,726    5,560    5,646    2,703    16,635 
Net earnings   298    8,106    8,735    3,896    21,035 
Net earnings (loss) attributable to noncontrolling interests   (3,674)   97    (157)   45    (3,689)
Net earnings attributable to The Marcus Corporation  $3,972   $8,009   $8,892   $3,851   $24,724 
                          
Net earnings per common share attributable to
  The Marcus Corporation - diluted
  $0.15   $0.29   $0.32   $0.14   $0.90 
                          
Weighted ave. shares outstanding - diluted   27,043    27,480    27,633    27,572    27,431 
                          
Selected Segment Data                         
Revenues:                         
  Theatres  $62,595   $64,446   $59,279   $63,976   $250,296 
  Hotels & Resorts   44,398    53,826    60,500    54,501    213,225 
  Corporate   106    296    151    142    695 
Total revenues  $107,099   $118,568   $119,930   $118,619   $464,216 
                          
Operating Income (loss):                         
  Theatres  $11,841   $12,728   $10,194   $12,648   $47,411 
  Hotels & Resorts   (2,590)   6,237    9,895    945    14,487 
  Corporate   (3,878)   (3,020)   (3,490)   (3,695)   (14,083)
Total operating income  $5,373   $15,945   $16,599   $9,898   $47,815 

 

 
 

 

THE MARCUS CORPORATION

Consolidated Statements of Earnings

Comparative Info - 53 Weeks Ended December 31, 2015 (Unaudited)

 

   13 Weeks Ended   14 Weeks Ended   53 Weeks Ended 
(in thousands, except per share data)  March 26,   June 25,   Sept. 24,   Dec. 31,   Dec. 31, 
   2015   2015   2015   2015   2015 
Revenues:                         
  Theatre admissions  $42,343   $46,047   $39,125   $48,736   $176,251 
  Rooms   20,686    29,448    33,641    26,082    109,857 
  Theatre concessions   26,834    29,813    26,027    32,407    115,081 
  Food and beverage   15,170    17,498    18,679    19,681    71,028 
  Other revenues   13,674    14,972    16,422    14,409    59,477 
Total revenues   118,707    137,778    133,894    141,315    531,694 
                          
Costs and expenses:                         
  Theatre operations   36,392    39,536    35,169    42,515    153,612 
  Rooms   9,780    11,129    11,155    10,344    42,408 
  Theatre concessions   7,071    8,281    7,700    9,227    32,279 
  Food and beverage   13,376    14,459    14,612    15,322    57,769 
  Advertising and marketing   5,369    5,789    6,152    6,619    23,929 
  Administrative   14,241    14,572    14,011    17,786    60,610 
  Depreciation and amortization   9,838    9,970    10,452    10,212    40,472 
  Rent   2,154    2,154    2,209    2,105    8,622 
  Property taxes   4,046    3,434    3,885    3,511    14,876 
  Other operating expenses   8,623    8,336    8,848    7,808    33,615 
  Impairment charge   316    2,603    -    -    2,919 
Total costs and expenses   111,206    120,263    114,193    125,449    471,111 
                          
Operating income   7,501    17,515    19,701    15,866    60,583 
                          
Other income (expense):                         
  Investment income (loss)   (22)   217    10    4    209 
  Interest expense   (2,319)   (2,356)   (2,386)   (2,534)   (9,595)
  Gain (loss) on disposition of property, equipment and other assets   (252)   (495)   183    (669)   (1,233)
  Equity earnings (losses) from unconsolidated joint ventures, net   (98)   (25)   2    (39)   (160)
    (2,691)   (2,659)   (2,191)   (3,238)   (10,779)
                          
Earnings before income taxes   4,810    14,856    17,510    12,628    49,804 
Income taxes   1,764    5,942    6,798    4,911    19,415 
Net earnings   3,046    8,914    10,712    7,717    30,389 
Net earnings (loss) attributable to noncontrolling interests   (191)   (103)   (159)   60    (393)
Net earnings attributable to The Marcus Corporation  $3,237   $9,017   $10,871   $7,657   $30,782 
                         
Net earnings per common share attributable to 
  The Marcus Corporation - diluted
  $0.12   $0.32   $0.39   $0.27   $1.10 
                          
Weighted ave. shares outstanding - diluted   27,753    27,866    27,898    27,957    27,924 
                          
Selected Segment Data                         
Revenues:                         
  Theatres  $72,642   $79,797   $68,919   $85,293   $306,651 
  Hotels & Resorts   45,958    57,809    64,840    55,848    224,455 
  Corporate   107    172    135    174    588 
Total revenues  $118,707   $137,778   $133,894   $141,315   $531,694 
                          
Operating Income (loss):                         
  Theatres  $15,129   $17,397   $12,310   $18,073   $62,909 
  Hotels & Resorts   (3,605)   2,369    11,206    2,827    12,797 
  Corporate   (4,023)   (2,251)   (3,815)   (5,034)   (15,123)
Total operating income  $7,501   $17,515   $19,701   $15,866   $60,583