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 2009-12-18
Record Revenues for Marcus Theatres Offset by Hotel Declines, Adjustments
The Marcus Corporation (NYSE: MCS) today reported results for the second quarter ended November 26, 2009. Record revenues for Marcus Theatres® helped to compensate for the impact of the challenging lodging industry environment on Marcus Hotels and Resorts.
Second Quarter Fiscal 2010 Highlights
* Total revenues for the second quarter of fiscal 2010 were $83,366,000, compared to revenues of $87,943,000 for the second quarter of fiscal 2009.
* Operating income was $1,967,000 for the second quarter of fiscal 2010, compared to operating income of $8,342,000 for the same period in the prior year.
* The company reported a net loss of $323,000 or $0.01 per diluted common share for the second quarter of fiscal 2010, compared to net earnings of $896,000 or $0.03 per diluted common share for the second quarter of fiscal 2009.
* Operating income and net loss for the second quarter of fiscal 2010 include a one-time theatre pension withdrawal liability of $1.4 million or $0.03 per diluted common share. The second quarter results were also negatively impacted by an impairment charge of $2.6 million or $0.05 per diluted common share related to the company’s Platinum Hotel & Spa condominium hotel units, due to the continued downturn in the Las Vegas real estate market.
* Net earnings for the second quarter of last year’s fiscal 2009 included unusual pre-tax adjustments of $3.3 million or $0.07 per diluted common share.
First Half Fiscal 2010 Highlights
* Total revenues for the first half of fiscal 2010 were $193,519,000, compared to revenues of $208,314,000 for the first half of fiscal 2009.
* Operating income was $20,942,000 for the first half of fiscal 2010, compared to operating income of $32,289,000 for the same period in the prior year.
* Net earnings were $9,895,000 or $0.33 per diluted common share for the first half of fiscal 2010, compared to earnings of $13,329,000 or $0.45 per diluted common share for the first half of fiscal 2009.
“Although we still faced many challenges in our hotels and resorts business this quarter, our reported results were more significantly impacted by the one-time pension plan withdrawal liability and the Platinum impairment charge, which together totaled $0.08 per diluted common share. Excluding these unusual items, we are pleased that the solid results of Marcus Theatres continued to provide stability for our financial performance in this difficult economic climate,” said Gregory S. Marcus, president and chief executive officer of The Marcus Corporation.
Marcus Theatres®
The record second quarter revenues for Marcus Theatres were up 4.7% over the second quarter of fiscal 2009. Excluding the one-time pension withdrawal liability, the division’s operating income for the second quarter of fiscal 2010 would have increased approximately $300,000 from the second quarter of the prior year.
“Second quarter box-office revenues were on pace to be consistent with last year’s same quarter until they were jump-started in the last week of the quarter with the record-breaking opening of The Twilight Saga: New Moon. To illustrate the impact of this film, this picture was the highest grossing film for Marcus Theatres during the entire second quarter, despite the fact that it played for only one week during the quarter,” said Marcus.
Other top-performing films in the second quarter were Couples Retreat, Cloudy with a Chance of Meatballs and 2012. “The box-office appeal of digital 3D movies continued in the second quarter, with three digital 3D movies, Cloudy with a Chance of Meatballs, A Christmas Carol and Final Destination: Death Trip, all ranking in our top 12 pictures for the quarter,” said Bruce J. Olson, senior vice president of The Marcus Corporation and president of Marcus Theatres.
“The third quarter is off to a solid start, with our box office up approximately 20% during the first three weeks of the holiday period,” added Olson. “Besides the Twilight sequel, films that have contributed to the increase include The Blind Side and this past weekend’s The Princess and the Frog. One of the most highly-anticipated films of the year, James Cameron’s Avatar, opens tomorrow, and films such as Alvin and the Chipmunks: The Squeakquel and Sherlock Holmes are also expected to perform well during the holiday season.”
A highlight for the division during the second quarter was the November 6 opening of the Marcus Midtown Cinema in Omaha, Neb. This new state-of-the-art cinema complex is located in Midtown Crossing at Turner Park, a Mutual of Omaha mixed-use urban development project. Marcus Theatres manages the theatre for Mutual of Omaha and was involved in its design and development.
“This upscale four-level, five-screen entertainment destination is unique to Omaha and the region. Special amenities include our CineDineSM in-theatre dining in all five auditoriums and Zaffiro’s famous thincredibleSM handmade-to-order pizza. The theatre also features two sophisticated cocktail lounges, meeting and event space, full catering service and a striking four-story glass façade with breathtaking views of the Midtown skyline and Turner Park. Although it has been open only a short time, the response to this distinctive new theatre has been very positive,” added Olson.
Marcus Hotels and Resorts
Second quarter revenues and operating income for Marcus Hotels and Resorts continued to suffer from the challenging travel environment across the U.S. “Revenue per available room (RevPAR) was down 15.0% compared to the same quarter last year. While RevPAR is still down, the trend has improved sequentially from the RevPAR decreases of 23.0% in the fourth quarter of fiscal 2009 and 21.1% in the first quarter of fiscal 2010,” said Marcus.
“Occupancy levels began to stabilize in the second quarter, but there continues to be substantial downward pressure on rates and the group business segment remains heavily impacted. While the stabilization in occupancy is encouraging, we will need to see a continued improvement in the overall economy before business travel strengthens,” said Bill Otto, president of Marcus Hotels and Resorts.
“Under these difficult industry conditions, controlling costs is more important than ever to reduce the flow-through of revenue declines to the bottom line. We were pleased with our efforts to manage expenses during the second quarter, while never losing sight of the need to ensure return visits by providing an exceptional experience for our guests,” said Otto.
“Our strong financial position enables us to continue maintaining and enhancing our properties, even in the current economic environment. The enhancements to the Grand Geneva Resort & Spa that were completed this summer have been very well received by guests and an extensive remodeling project at the Hilton Milwaukee is currently underway,” added Otto. “In addition, we are actively exploring potential growth opportunities that may become available during these challenging times.”
Financial Position
“In this challenging economy, our philosophy of maintaining a strong balance sheet continued to prove advantageous. Our debt-to-total-capitalization ratio was 43% at the end of the second quarter. This is considerably lower than many others in our industry. In addition, we currently have approximately $115 million available under our existing credit lines. As we continue to weather the economic storm, we are also in a good position to pursue potential growth opportunities that may arise,” added Marcus.
Conference Call and Webcast
Marcus Corporation management will host a conference call today, December 17, 2009, at 10:00 a.m. Central/11:00 a.m. Eastern time to discuss the second 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 1-617-801-9711 and entering the passcode 77014620. 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 Thursday, December 24, 2009 by dialing 1-888-286-8010 and entering the passcode 39457583. The Webcast of the conference call will be archived on the company’s Web site until the next earnings release.
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