The Timeshare Beat Home | Today's Headlines | Back to Previous Page
|
The Timeshare Beat Home | Today's Headlines | Back to Previous Page |
|
|
|
Press Release: The Marcus Corporation
July 28, 2006
MILWAUKEE, WI -- The Marcus Corporation (NYSE:MCS) yesterday reported increased revenues, operating income and
earnings from continuing operations for the fourth quarter and fiscal year ended May 25, 2006.
Fourth Quarter Fiscal 2006 Highlights
Fiscal 2006 Highlights
"We ended fiscal 2006 on a high note, with solid fourth quarter increases in revenues, operating income
and earnings from continuing operations. This was our fourth consecutive quarter of increased earnings from continuing
operations, with both of our divisions contributing to the improvement," said Stephen H. Marcus, chairman
and chief executive officer of The Marcus Corporation.
"For the year, our improved results were driven by the strong performance of Marcus Hotels and Resorts. Although
Marcus Theatres' results for the last three quarters of fiscal 2006 increased over the same period last year, it
wasn't enough to offset the impact of a particularly weak slate of movies in the first quarter last summer,"
said Marcus.
Marcus Theatres
Marcus Theatres reported increased revenues and operating income in the fourth quarter, with a 4.3% increase in
attendance. "The fourth quarter movie slate had broad appeal, attracting audiences of all ages. Top pictures
for the fourth quarter were Ice Age 2: The Meltdown, The Da Vinci Code and Mission Impossible 3," said Marcus.
"Although the division's overall results were down for the year, the improving trends were quite encouraging,"
said Marcus. He noted that the highest-grossing films for the year were Harry Potter and the Goblet of Fire, Chronicles
of Narnia: The Lion, The Witch and The Wardrobe, War of the Worlds, Star Wars: Episode III - Revenge of the Sith
and Wedding Crashers.
"In early July, we broke ground for 'The Majestic,' our new flagship theatre in Brookfield, Wis. This will
be an entertainment destination featuring 16 stadium-style auditoriums, including two UltraScreens®, and a
multi-purpose auditorium named the Palladium that will be fully equipped for live performances such as comedy shows,
musicals, meetings and movies. The Majestic will also include an Italian restaurant, a cafe with name-brand coffee,
ice cream and hand-dipped chocolates, and the Palladium Lounge, where guests over 21 can enjoy a cocktail before
or after a performance. The Majestic will be one of the first theatres in the country to combine restaurants, a
multi-use venue and large UltraScreens into one entertainment facility. We believe this new concept will further
refine and enhance the movie-going experience and look forward to its anticipated opening in spring 2007,"
said Marcus. He added that construction continues on two new theatres in Green Bay and Sturtevant, Wis., with both
theatres scheduled to open in November 2006.
"The industry is moving cautiously forward with plans for the introduction of digital cinema and we are currently
testing digital cinema hardware and software at some of our theatres," he added.
"Fiscal 2007 has begun very well, with box office receipts and concession sales for the first half of the
summer showing nice gains over the same period last year. The very strong box office for Pirates of the Caribbean:
Dead Man's Chest set a new record for the best summer week in our history, illustrating that when we have top-quality
movies to show, the audience responds. Other movies that have performed well to this point in the summer include
X-Men 3, Cars and Superman Returns. We are hopeful that this improvement will continue for the remainder of the
summer, with potential hits including Snakes on a Plane, Talledega Nights: The Ballad of Ricky Bobby and The Ant
Bully," said Marcus.
Marcus Hotels and Resorts
"This was an excellent quarter and a great year for Marcus Hotels and Resorts, as the division benefited from
new properties and the continued improvement in business travel," said Marcus.
Revenue per available room, or RevPAR, for comparable properties increased 6.8% in fiscal 2006 and operating income
for the division was up 23.3% for the year. Including three new properties - the Four Points by Sheraton Chicago
Downtown/Magnificent mile, the Wyndham Milwaukee Center and the Westin Columbus Hotel in Columbus, Ohio - RevPAR
increased 11.4% in fiscal 2006. In addition to overall improvement at the division's five comparable company-owned
hotels, the three new properties also contributed to the increased operating income in the fourth quarter and fiscal
2006.
"Construction is nearing completion on the Platinum Hotel & Spa in Las Vegas, a joint-venture condominium
hotel project that is currently expected to open in September 2006. We expect to report a significant development
profit from this project and will receive management fees and share in any joint-venture earnings on the commercial
areas of the hotel after it opens. Construction is also continuing on the renovation of the Hilton Skirvin in Oklahoma
City, a public-private redevelopment project that is expected to open in February 2007," said Marcus.
"In addition to the new projects, we continue to invest in our existing properties. Current projects include
a major renovation at the Wyndham Milwaukee Center, a new restaurant and spa at the Pfister Hotel in Milwaukee
along with the renovation of the guest rooms in the original historic building, and a conference center expansion
at the Grand Geneva Resort in Lake Geneva, Wis.," said Marcus.
"With the opening of the Platinum Hotel & Spa and the Hilton Skirvin, we will have approximately 4,000
rooms under management. Our goal continues to be 6,000 rooms under management over the next three to four years.
The division's expanded development team is continually evaluating potential new projects and we have a number
of good opportunities in the pipeline," said Marcus.
"We are encouraged by the near-term outlook for Marcus Hotels and Resorts. The summer is off to a good start
and advanced bookings for the next few months are very promising. Group business, a segment that is very important
to several of our properties, appears to be improving. We believe our ongoing investments in both new and existing
properties provide opportunities for continued growth in revenues and operating income for this division over the
long term," he added.
Summary
"In fiscal 2006, we delivered on our commitment to build value for our shareholders. We paid a special dividend
of $7.00 per share in February 2006, returning approximately $214 million in proceeds from the sale of the limited-service
lodging division to our shareholders. We increased the regular quarterly cash dividend by 36% and, beginning in
May 2006 and continuing into the first quarter of fiscal 2007, we have repurchased nearly 400,000 shares of our
common stock in the open market under an existing board authorization. We still have over $35 million in cash on
our balance sheet and significant borrowing capacity to invest in growing our theatre and hotel businesses over
the next year and beyond," added Marcus.
Conference Call and Webcast
Marcus Corporation management will host a conference call today, July 27, 2006, at 3:00 p.m. Central/4:00 p.m.
Eastern time to discuss the fourth 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 1-913-981-4900.
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, August 3, 2006 by dialing 1-888-203-1112 and entering the passcode
5681145. 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®, owns or manages 501 screens at 44 locations
in Wisconsin, Illinois, Minnesota and Ohio, and one family entertainment center in Wisconsin. The company's lodging
division, Marcus Hotels and Resorts, owns or manages 13 hotels and resorts in Wisconsin, Illinois, Ohio, Missouri,
California, Minnesota, and Texas and one vacation club in Wisconsin. 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 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 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 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 52 Weeks Ended
--------------------- ---------------------
May 25, May 26, May 25, May 26,
2006 2005 2006 2005
---------- ---------- ---------- ----------
Revenues:
Rooms and telephone $19,110 $14,166 $75,871 $56,778
Theatre admissions 20,195 19,608 93,429 96,157
Theatre concessions 10,204 9,693 45,496 45,785
Food and beverage 9,802 8,713 41,162 36,576
Other revenues 7,912 7,542 33,286 31,762
---------- ---------- ---------- ----------
Total revenues 67,223 59,722 289,244 267,058
Costs and expenses:
Rooms and telephone 7,129 5,865 27,852 22,726
Theatre operations 16,315 15,988 73,527 75,560
Theatre concessions 2,189 2,115 9,672 9,896
Food and beverage 7,455 7,149 31,461 28,640
Advertising and
marketing 4,070 3,538 16,446 13,442
Administrative 6,516 6,956 29,001 26,084
Depreciation and
amortization 6,585 6,203 26,131 24,503
Rent 899 507 3,630 1,989
Property taxes 2,641 2,429 10,395 8,145
Preopening expenses 399 420 805 816
Other operating
expenses 5,908 4,180 20,784 16,355
---------- ---------- ---------- ----------
Total costs and expenses 60,106 55,350 249,704 228,156
---------- ---------- ---------- ----------
Operating income 7,117 4,372 39,540 38,902
Other income (expense):
Investment income 1,031 2,366 7,863 6,187
Interest expense (3,389) (3,493) (14,397) (14,874)
Gain (loss) on
disposition of
property, equipment
and investments in
joint ventures (1,582) (56) 1,749 2,195
Equity losses from
unconsolidated joint
ventures, net (742) (471) (1,868) (1,090)
---------- ---------- ---------- ----------
(4,682) (1,654) (6,653) (7,582)
---------- ---------- ---------- ----------
Earnings from continuing
operations before
income taxes 2,435 2,718 32,887 31,320
Income taxes 261 774 10,419 11,742
---------- ---------- ---------- ----------
Earnings from continuing
operations 2,174 1,944 22,468 19,578
Discontinued operations:
Income (loss) from
discontinued
operations, net of
income taxes (846) (771) (1,905) 1,322
Gain on sale of
discontinued
operations, net of
income taxes 1,687 1,720 7,708 78,321
---------- ---------- ---------- ----------
841 949 5,803 79,643
---------- ---------- ---------- ----------
Net earnings $3,015 $2,893 $28,271 $99,221
========== ========== ========== ==========
Earnings per share - basic:
Continuing operations $0.07 $0.07 $0.74 $0.65
Discontinued operations 0.03 0.03 0.19 2.64
---------- ---------- ---------- ----------
Net earnings per share $0.10 $0.10 $0.93 $3.29
========== ========== ========== ==========
Earnings per share -
diluted:
Continuing operations $0.07 $0.06 $0.73 $0.64
Discontinued operations 0.03 0.03 0.18 2.61
---------- ---------- ---------- ----------
Net earnings per share $0.10 $0.09 $0.91 $3.25
========== ========== ========== ==========
Weighted average shares
outstanding:
Basic 30,612 30,293 30,439 30,120
Diluted 31,077 30,654 30,939 30,526
THE MARCUS CORPORATION
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited) (Audited)
May 25, 2006 May 26, 2005
------------ ------------
Assets:
Cash and cash equivalents $34,528 $259,057
Cash held by intermediaries 1,752 28,552
Accounts and notes receivable 17,691 11,615
Refundable income taxes 216 871
Deferred income taxes 5,898 5,464
Other current assets 11,273 4,856
Assets of discontinued operations 7,545 22,860
Property and equipment - net 450,529 398,748
Other assets 57,802 55,476
------------ ------------
Total Assets $587,234 $787,499
============ ============
Liabilities and Shareholders' Equity:
Accounts and notes payable $19,899 $16,645
Taxes other than income taxes 11,064 8,507
Other current liabilities 22,331 19,237
Current maturities of long-term debt 53,402 25,765
Liabilities of discontinued operations 1,998 9,533
Long-term debt 123,110 170,888
Deferred income taxes 27,946 26,614
Deferred compensation and other 26,161 16,649
Shareholders' equity 301,323 493,661
------------ ------------
Total Liabilities and Shareholders' Equity $587,234 $787,499
============ ============
THE MARCUS CORPORATION
Business Segment Information (Unaudited)
(in thousands)
Continu-
ing
Opera- Dis-
Hotels/ Corporate tions continued
Theatres Resorts Items Total Operations Total
-------- ------- --------- -------- ---------- -------
13 Weeks Ended
May 25, 2006
Revenues $32,181 $34,707 $335 $67,223 $625 $67,848
Operating
income
(loss) 6,300 3,101 (2,284) 7,117 (1,088) 6,029
Depreciation
and
amortiza-
tion 3,018 3,285 282 6,585 18 6,603
13 Weeks Ended
May 26, 2005
Revenues $31,316 $28,068 $338 $59,722 $1,278 $61,000
Operating
income
(loss) 5,773 1,204 (2,605) 4,372 (1,147) 3,225
Depreciation
and
amortiza-
tion 3,242 2,758 203 6,203 59 6,262
52 Weeks Ended
May 25, 2006
Revenues $145,990 $141,917 $1,337 $289,244 $5,358 $294,602
Operating
income
(loss) 32,481 15,613 (8,554) 39,540 (2,859) 36,681
Depreciation
and
amortiza-
tion 12,372 12,632 1,127 26,131 143 26,274
52 Weeks Ended
May 26, 2005
Revenues $149,125 $116,532 $1,401 $267,058 $52,060 $319,118
Operating
income
(loss) 34,791 12,658 (8,547) 38,902 2,488 41,390
Depreciation
and
amortiza-
tion 12,148 10,955 1,400 24,503 3,899 28,402
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