Second Quarter Fiscal 2018 Highlights
First Half Fiscal 2018 Highlights
“The second quarter of 2018 was again another record quarter for The Marcus Corporation, with record revenues, operating income and net earnings. In fact, revenues in the quarter were the highest for any quarter in our history,” said Gregory S. Marcus, president and chief executive officer of The Marcus Corporation. “Not only did Marcus Theatres achieve its best quarter on record with significant increases in both revenues and operating income, it also considerably outperformed the industry, which also had a record quarter. While our theatre division drove our strong second quarter performance, revenues and operating income also improved for Marcus Hotels & Resorts.
“We are pleased to have had such a strong first half of the year, achieving two consecutive record quarters. Net earnings again benefitted from a lower income tax rate, which we expect will continue to positively impact the company over the long-term,” said Marcus.
Marcus Theatres reported its strongest quarter on record, with a 33.0% increase in revenues and a 54.9% increase in operating income for the second quarter of 2018 compared to the prior year period. The division outperformed the change in national box office revenues by more than 10 percentage points compared to the same corresponding weeks in the prior year, according to Rentrak.
“This was an exceptional quarter for Marcus Theatres, driven by both a blockbuster film slate and continued operational excellence across our circuit,” said Rolando Rodriguez, chairman, president and chief executive officer of Marcus Theatres. “The division far outperformed the industry thanks in part to a strong consumer response to the significant investments we have made to our theatres over the past year. This is especially true at our Marcus Wehrenberg theatres, which significantly outperformed the industry, according to Rentrak, and continues to meaningfully contribute to our results.”
Investments during the second quarter include adding the division’s signature DreamLoungerSM recliner seating to four existing locations, with additional DreamLounger upgrades currently underway at two more locations. In addition, the division converted an additional five auditoriums to its UltraScreen DLX® and SuperScreen DLX® formats, and added two new Zaffiro’s® Express locations and one new Take FiveSM Lounge during the quarter. Preliminary work at Marcus Theatres’ second BistroPlexSM location in Brookfield, Wisconsin has begun.
“As expected, the summer film slate included a number of highly anticipated movies, including several blockbusters that were very well received by movie-goers,” said Rodriguez. “We significantly outperformed the industry as a result of our strong movie slate, innovative operating and marketing strategies, successful loyalty program and continued focus on creating the ultimate movie going experience, with DreamLounger recliners, premium large format screens and exciting food and beverage concepts.”
The five top-performing films for Marcus Theatres in the second quarter of fiscal 2018 were Avengers: Infinity War; Incredibles 2; Deadpool 2; Solo: A Star Wars Story and A Quiet Place.
Rodriguez said the third quarter is off to a good start, thanks to the continued success of Incredibles 2 and Jurassic World: Fallen Kingdom, as well as recently opened films such as Ant-Man and the Wasp; Skyscraper; Hotel Transylvania 3: Summer Vacation; Mamma Mia! Here We Go Again and The Equalizer 2. Additional films opening through the end of the third quarter include Mission-Impossible: Fallout; Christopher Robin; The Meg; Crazy Rich Asians; The Nun; The Predator; and The House with a Clock in Its Walls.
Marcus Hotels & Resorts’ revenue per available room (RevPAR) for comparable company-owned properties was essentially even in the second quarter. “Increased food and beverage revenues, higher management fees and improved operating margins were the primary contributors to the division’s improved second quarter results,” said Marcus. He noted that the prior year’s results included preopening expenses and startup losses related to the opening of the SafeHouse® Chicago, which is now fully operational.
During the quarter, the division announced that it has assumed management of the DoubleTree by Hilton Hotel El Paso Downtown in El Paso, Texas. It will also assume management of the newly constructed Courtyard by Marriott El Paso Downtown/Convention Center later this summer. This will bring Marcus Hotels & Resorts’ portfolio to 21 owned and/or managed properties across the country.
In May 2018, the division also announced that it has selected two nationally recognized firms to lead the reinvention of the 221-room InterContinental Milwaukee into an immersive arts-focused hotel, which is scheduled to be completed in mid-2019.
Conference Call and Webcast
Marcus Corporation management will hold a conference call today, Thursday, July 26, 2018, at 10:00 a.m. Central/11:00 a.m. Eastern time to discuss the second quarter results. Interested parties may listen to the call live on the Internet through the investor relations section of the company’s website: www.marcuscorp.com, or by dialing 1-574-990-3059 and entering the passcode 2180519. Listeners should dial in to the call at least 5-10 minutes prior to the start of the call or should go to the website at least 15 minutes prior to the call to download and install any necessary audio software.
A telephone replay of the conference call will be available through Thursday, August 2, 2018, by dialing 1-855-859-2056 and entering passcode 2180519. The webcast will be archived on the company’s website until its next earnings release.
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 Corporation’s 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 company’s lodging division, Marcus® Hotels & Resorts, owns and/or manages 20 hotels, resorts and other properties in nine states, with another property opening in El Paso, Texas during the summer of 2018. For more information, please visit the company’s website 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 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, 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 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 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; (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; and (10) a disruption in our business and reputational and economic risks associated with civil securities claims brought by shareholders. 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.
Source: Business Wire Entertainment News