Marcus Corporation (MCS) Tops Q2 EPS by 24c, Revenues Beat

Marcus Corporation (NYSE: MCS) reported Q2 EPS of ($1.37), $0.24 better than the analyst estimate of ($1.61). Revenue for the quarter came in at $7.93 million versus the consensus estimate of $2.98 million.

Second Quarter Fiscal 2020 Highlights

• Total revenues for the second quarter of fiscal 2020 were $7,933,000, compared to total revenues of $232,500,000 for the second quarter of fiscal 2019.
• Operating loss was $53,062,000 for the second quarter of fiscal 2020, compared to operating income of $27,475,000 for the prior year quarter.
• Net loss attributable to The Marcus Corporation was $27,029,000 for the second quarter of fiscal 2020, compared to net earnings attributable to The Marcus Corporation of $18,066,000 for the same period in fiscal 2019.
• Net loss per diluted common share attributable to The Marcus Corporation was $0.89 for the second quarter of fiscal 2020, compared to net earnings per diluted common share attributable to The Marcus Corporation of $0.58 for the second quarter of fiscal 2019.
• Adjusted net loss attributable to The Marcus Corporation was $42,525,000 for the second quarter of fiscal 2020, compared to Adjusted net earnings attributable to The Marcus Corporation of $20,169,000 for the second quarter of fiscal 2019.
• Adjusted net loss per diluted common share attributable to The Marcus Corporation was $1.37 for the second quarter of fiscal 2020, compared to Adjusted net earnings per diluted common share attributable to The Marcus Corporation of $0.64 for the prior year quarter.
• Adjusted EBITDA was a loss of $30,046,000 for the second quarter of fiscal 2020, compared to Adjusted EBITDA of $49,543,000 for the comparable prior year period.
• Adjusted net earnings (loss) attributable to The Marcus Corporation, Adjusted net earnings (loss) per diluted common share attributable to The Marcus Corporation and Adjusted EBITDA reflect adjustments made by the company to eliminate the impact of a favorable income tax adjustment and certain nonrecurring property closure expenses, reopening expenses and impairment charges during the second quarter of fiscal 2020, as well as certain nonrecurring acquisition and preopening expenses related to the Movie Tavern acquisition and certain nonrecurring preopening expenses related to the conversion of the former InterContinental Milwaukee hotel into Saint Kate® – The Arts Hotel, during the first half of fiscal 2019.

“The impact of the COVID-19 pandemic on our business, the industries in which we compete, and the global economy is truly unprecedented,” said Gregory S. Marcus, president and chief executive officer of The Marcus Corporation. “Yet thanks to the resiliency of our team, our strong financial position and the proactive measures we took when the pandemic began, including reducing expenses and increasing our liquidity, we are positioned to weather this crisis. As we prudently reopen our theatres, hotels and restaurants, I have every confidence that our outstanding team has gone above and beyond to deliver an exceptional experience while protecting the health and safety of our guests and associates. We have always said our associates are our greatest asset. That has proven true time and again throughout this crisis.”

“Maintaining a strong balance sheet has always been core to our strategy,” said Marcus. “With our enhanced liquidity, we believe it positions us to continue to sustain our operations well into 2021, even in the unlikely scenario that our properties continue to be closed. It is also worth noting that in addition to our owned hotels, we own the underlying real estate for the majority of our theatres. We believe this is a significant advantage for us relative to our peers as it keeps our monthly fixed lease payments low and provides significant underlying credit support for our balance sheet.”

“We remain optimistic that pent up demand, increased consumer comfort and the coming release of new films will help accelerate our reopening,” said Rolando Rodriguez, chairman, president and chief executive officer of Marcus Theatres. “While we were on intermission during the second quarter, we developed, tested and implemented our comprehensive ‘Movie STAR’ approach, featuring enhanced health and safety protocols and advanced technology so our guests can enjoy the big screen with confidence. We also offered curbside pick-up and online ordering of favorites like popcorn, pizza and other food items, and introduced five parking lot cinemas for those looking to enjoy an outdoor movie experience. Throughout this period, we remained in consistent communication with our loyal guests through our Magical Movie RewardsSM loyalty program.”

As of the date of this release, the film studios have indicated that they intend to release new films later this month, beginning with Unhinged on August 21, New Mutants on August 28 and the highly anticipated Tenet on September 3. If this schedule holds, we expect to reopen the majority of our theatres in time for these new movies. Additional films expected in the second half of the year include The King’s Man, Wonder Woman 1984, Death on the Nile, Black Widow, Soul, No Time to Die, Free Guy, West Side Story, Coming 2 America, Dune, and The Croods 2. “While we cannot control future film release dates, we will continue to adapt our plans as necessary and find innovative ways to stay connected to our guests as we prepare to welcome them back to a safe and comfortable environment,” said Rodriguez.

“Most cancelled group bookings that were not for one-time events are rebooking for future dates, including for the rescheduled Ryder Cup in September 2021,” said Michael Evans, president of Marcus Hotels & Resorts. “And while the DNC will not be nearly as significant as originally anticipated due to the COVID-19 pandemic, it still is expected to benefit our Milwaukee hotels. While temporarily closing our hotels was the right thing to do, we believe our properties are uniquely positioned in their respective markets to recapture demand as travel recovers.”

Reopened hotels are operating with new protocols, including our CleanCare Pledge, which feature industry best practices for cleanliness, sanitation and safety. “As we continue to reopen our hotels, resorts and restaurants, the health and safety of our guests and associates remains paramount,” said Evans. “Our associates are working tirelessly so every guest can rest easy knowing they are receiving the highest standards of service and cleanliness, while still enjoying the best our award-winning properties have to offer.”

For earnings history and earnings-related data on Marcus Corporation (MCS) click here.

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