The Marcus Corporation Reports Second Quarter Results
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The Marcus Corporation Reports Second Quarter Results
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Category: Worldwide - Industry economy -
Figures / Studies
This is a press release selected by our editorial committee and published online for free on 2011-12-16
Continued improvement of Marcus Hotels & Resorts drives 35.5% increase in net earnings and 42.9% increase in EPS
The Marcus Corporation (NYSE: MCS) today reported results for the second quarter ended November 24, 2011. Increased revenues, operating income and net earnings were primarily driven by the continued improvement of Marcus® Hotels & Resorts.
Second Quarter Fiscal 2012 Highlights
Total revenues for the second quarter of fiscal 2012 were $90,069,000, a 3.8% increase from revenues of $86,735,000 for the second quarter of fiscal 2011.
Operating income was $6,261,000 for the second quarter of fiscal 2012, a 15.8% increase from operating income of $5,406,000 for the same period in the prior year.
Net earnings were $2,824,000 for the second quarter of fiscal 2012, a 35.5% increase from net earnings of $2,084,000 for the second quarter of fiscal 2011.
Earnings per diluted common share were $0.10 for the second quarter of fiscal 2012, a 42.9% increase from earnings of $0.07 per diluted common share in the comparable prior period.
First Half Fiscal 2012 Highlights
Total revenues for the first half of fiscal 2012 were $213,976,000, a 6.6% increase from revenues of $200,691,000 for the same period in fiscal 2011.
Operating income was $29,609,000 for the first half of fiscal 2012, a 19.2% increase from operating income of $24,830,000 for the first half of fiscal 2011.
Net earnings were $15,301,000 for the first half of fiscal 2012, a 26.4% increase from net earnings of $12,104,000 for the same period in fiscal 2011.
Earnings per diluted common share were $0.52 for the first half of fiscal 2012, a 26.8% increase from earnings of $0.41 per diluted common share for the first half of fiscal 2011.
“This was another strong quarter for The Marcus Corporation. Our overall performance benefited from the continued improvement of Marcus Hotels & Resorts. Results for Marcus Theatres® were down slightly for the quarter, due to accelerated depreciation related to our conversion to digital cinema technology and a weaker film slate than in the second quarter of last year. However, Marcus Theatres’ results were up for the first half of the fiscal year,” said Gregory S. Marcus, president and chief executive officer of The Marcus Corporation.
Marcus® Hotels & Resorts
Revenues for Marcus Hotels & Resorts increased 9.4% and operating income was up 57.7% for the second quarter. Revenue per available room (RevPAR) increased 9.4% for the second quarter, due in large part to a 5.7% increase in the average daily rate. RevPAR was up 9.6% for the first half of the fiscal year.
“We are encouraged by the continuing upward trends of both Marcus Hotels and the lodging industry as a whole. All eight company-owned properties contributed to the revenue increase this quarter. Room demand continues to be at historically high levels and we are particularly encouraged by our fourth consecutive quarter of increases in the average daily rate,” said Marcus.
“We continue to actively pursue opportunities to add new management contracts to our portfolio. In addition, our recently created hotel investment business, MCS Capital, LLC, may act as an investment fund sponsor, joint venture partner or sole investor for additional hotel properties,” added Marcus.
He noted that the company continues to maintain and enhance its existing properties. The renovation of the Hotel Phillips in Kansas City, Mo. was completed during the second quarter. This project skillfully maintained the hotel’s elegant Art Deco design elements while adding the high-quality amenities today’s travelers expect.
Marcus Theatres®
“A slightly weaker film slate resulted in a small decrease in revenues and operating income for Marcus Theatres in the second quarter. However, operating income would still have increased over the second quarter of last year, if not for approximately $800,000 of accelerated depreciation for the company’s existing 35mm film projection systems in conjunction with the deployment of new digital cinema technology in 618 screens across the circuit. The entire amount of accelerated depreciation related to the digital cinema deployment totaled $1.4 million,” said Marcus. He noted that both revenues and operating income increased for the first half of the year, due to the strong summer box office.
“The top performing pictures for the second quarter of fiscal 2012 were The Twilight Saga: Breaking Dawn – Part 1, Paranormal Activity 3 and Puss in Boots (3D). This film line-up was not quite as strong as the top pictures for last year’s second quarter, which were led by Harry Potter and the Deathly Hallows: Part 1, and also included Jackass 3 (3D) and Megamind (3D),” said Bruce J. Olson, senior vice president of The Marcus Corporation and president of Marcus Theatres.
“The busy holiday period kicked-off with the Thanksgiving openings of three family films, The Muppets, Hugo (3D) and Arthur Christmas (3D). Special pre-opening showings of Mission: Impossible – Ghost Protocol begin tonight on our UltraScreens®, followed by the openings of Sherlock Holmes: A Game of Shadows and Alvin & the Chipmunks: Chip-Wrecked tomorrow. Other highly anticipated holiday-season pictures include The Girl with the Dragon Tattoo, Adventures of TinTin (3D), We Bought a Zoo and War Horse,” said Olson.
Olson said the division’s growth strategies include potential acquisitions and expanded food and beverage concepts. “Yesterday, we closed on the purchase of Showtime Cinema, a 12-screen theatre in a southwestern Milwaukee suburb. This is an excellent addition to our circuit that extends our presence in a growing market. We also continue to add new Zaffiro’s Pizzeria & Bar restaurants at existing theatre locations. A new full-service Zaffiro’s will open soon at our Parkwood Cinema in suburban St. Cloud, Minn. and we recently broke ground for a Zaffiro’s restaurant at our Ridge Cinema in New Berlin, Wis.,” he said.
Olson added that the company’s large-scale digital cinema rollout was completed in September. “We have branded our digital cinema installations MDX – the Marcus Digital Xperience. We are also offering the latest 4K digital projection technology in 93 of our largest auditoriums. This technology allows for even higher resolution,” he said.
Other Matters
“We are still finalizing the accounting treatment of our digital cinema master license agreement, which became effective during our fiscal 2012 second quarter. As a result, we have not included a condensed balance sheet in this press release. A complete balance sheet will be provided in our required 10Q filing in January. The balance sheet considerations being finalized will not result in any restatement of prior financial statements and will have no impact on the consolidated statement of earnings included in this release, nor are they expected to have a material impact on future reported operating results,” said Marcus.
“The leverage on our balance sheet remained low at the end of the second quarter. We repurchased 119,000 shares of our common stock during the second quarter under an existing Board authorization, increasing the total number of shares repurchased since the beginning of our fiscal year to 561,000. Overall, we believe we are well positioned for future growth,” added Marcus.
Conference Call and Webcast
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