Marcus Corporation (the) · NYSE:MCS
Marcus Corporation (the) — Q4 2023 Earnings Presentation
44 slides from Marcus Corporation (the)'s earnings presentation, Feb 29, 2024
Slide 1: Investor Presentation March 2024
INVESTOR PRESENTATION MARCH 2024
Slide 2: Forward Looking Statement
Forward Looking Statement Certain matters discussed in this presentation 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
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures Adjusted EBITDA has been presented in this presentation as a supplemental measure of financial performance that is not required by, or presented in accordance with, GAAP. The company defines Adjusted EBITDA as net earnings (loss) attributable to The Marcus Corporation bef
Slide 4: A Leader in Lodging and Entertainment
A Leader in Lodging and Entertainment Founded in 1935 and headquartered in Milwaukee, Wisconsin Fiscal 2023 by Division • Fourth largest U.S. exhibitor • 993 screens at 79 locations in 17 states 37% 33% 30% Revenues* Operating Adjusted Income EBITDA 63% 67% 70% • Portfolio of 16 distinctive properti
Slide 5: Company Overview
Company Overview FY 2023 FY 2023 Adjusted Revenues: EBITDA: (1) $729.6M $108.7M FY 2023 Adj. Market Cap: EBITDA Margin: ~$456.2M 15.7%(1) (as of 3/13/2024) Since 1993 (1) Adjusted EBITDA is a Non-GAAP measurement equal to operating income plus depreciation and amortization, impairment charges, non-c
Slide 6: Investment Thesis
Diversified business platform Outperform respective markets and industries Focused and disciplined growth strategy Investment Strong balance sheet with significant Thesis liquidity Significant real estate assets Long-term track record of success Consistent shareholder returns 6
Slide 7: Strong, Stable Senior Management Team
Strong, Stable Senior Management Team Gregory S. Marcus Thomas F. Kissinger Chad Paris Mark A. Gramz Michael R. Evans Kim M. Lueck Steve V. Martin Chairman, Senior Executive Vice Chief Financial Officer & President, Marcus President, Marcus Chief Information Chief Human President and Chief President
Slide 8: Significant Improvement Over Prior Year
Significant Improvement Over Prior Year Revenues Operating Income Net Earnings (Loss) Adjusted EBITDA(1) (in millions) (in millions) (in millions) (in millions) $800 $40 $120 $729.6 $108.7 $33.9 $20 $700 $677.4 $35 $100 $30 $15 $14.8 $85.1 $600 $25 $80 $500 $10 $20 $400 $60 $15 $5 $300 $10 $8.3 $40
Slide 9: 88-Year History of Prudent Balance Sheet and Liquidity Management
88-Year History of Prudent Balance Sheet and Liquidity Management • Approach has been and will remain thoughtful, opportunistic and focused long-term • Match our debt portfolio to our asset base • Assets primarily of fixed and long-lived assets • Strive to have a significant portion of our debt port
Slide 10: Strong Balance Sheet and Access to Capital
Strong Balance Sheet and Access to Capital • Historically strong and consistent cash flow Debt Ratios • $102.6 million of net cash flow from 50% Debt/Capitalization % Net Debt to Adjusted EBITDA Ratio 10 operations in fiscal year 2023 9 • $276.2 million in cash and revolving credit 40% 8 availabilit
Slide 11: Increasing Dividend; Long History of Returning Capital to Shareholders
Increasing Dividend; Long History of Returning Capital to Shareholders Annual Cash Dividends • Reinstated $0.05 quarterly cash dividend Q3 2022; increased quarterly $0.7 cash dividend to $0.07 in Q3 2023 $0.64 $0.60 $0.6 • Annual cash dividend was $0.68 prior to $0.50 suspension on 4/29/20 (3-year a
Slide 12: Unique Real Estate Ownership Profile
Unique Real Estate Ownership Profile In addition to our owned hotels, unlike most of our peers, we own the underlying real estate for the majority of our theatres • Real estate ownership enables us to 100% quickly react to changing theatre trends • Reduces our monthly fixed lease 29% payments 75% •
Slide 13: Marcus Theatres
Marcus Theatres 13
Slide 14: Leading U.S. Theatre Exhibitor
Leading U.S. Theatre Exhibitor Marcus Theatres by Location(1) 993 screens at ND Fourth 2 MN 79 locations in NY 7 WI 1 largest 20 PA 17 states(1) IA NE 4 5 OH 7 IL 2 U.S. exhibitor CO 1 MO 8 KY VA 1 9 1 AR 1 GA TX LA 3 3 3 Added 36 Acquisition of Movie Marcus Theatres by Screen(1) theatres, 425 Taver
Slide 15: Long History of Growth and Outperformance
Long History of Growth and Outperformance Our investments in amenities and implementation of innovative operating and marketing strategies resulted in historically strong performance Box Office Recovery Concessions Revenue Ticket Revenue per vs. 2019(1) per person YoY Growth person YoY Growth 90% 79
Slide 16: Created Industry-Leading Theatre Guest Experience
Created Industry-Leading Theatre Guest Experience Invested ~$594 Million in New and Existing Assets Over the Last Decade Recliner Food and PLF Screens Acquisitions New Theatres Seating Beverage • 84% of company- • 82% of company- • 66% of first-run • ~60% of existing • BistroPlex in-theatre owned th
Slide 17: Current Plans
Current Plans Maximize Assets in a Post- Re-invent Out-of-Home Strategic Growth Pandemic World Entertainment Experience • Expand industry leading amenities – PLF’s, • Assume new management contracts and/or • Test MovieFlex subscription program to F&B concepts. encourage more frequent movie going. ta
Slide 18: Diverse Film Slate in Fiscal 2023
Diverse Film Slate in Fiscal 2023 • Fourth quarter of fiscal 2023 kicked off with Taylor Swift: The Eras Tour producing the highest box office concert film of all time in North America • Highest grossing films of 2023, include Barbie, The Super Mario Bros. Movie, Guardians of the Galaxy Vol. 3, Spid
Slide 19: Q1 Fiscal 2024 Films Performing Well
Q1 Fiscal 2024 Films Performing Well • Several films have contributed to early fiscal 2024 first quarter results, including Wonka, Mean Girls, Migration, Anyone But You, The Beekeeper, and Bob Marley: One Love 19
Slide 20: Several Exciting Films Planned for 2024
Several Exciting Films Planned for 2024* Q1 Q2 Q3 Q4 Godzilla x Kong: A Quiet Place: Day Harold and the Joker: Folie à Deux Ordinary Angels IF One Purple Crayon The New Empire Wolf Man Horizon: Horizon: Demon Slayer The Strangers: Venom Sequel The First Omen An American Saga An American Saga Chapter
Slide 21: 2025 Film Slate Includes Highly Anticipated Films
2025 Film Slate Includes Highly Anticipated Films* 2025 Films Paddington in Puru Michael Fantastic Four Mickey 17 Thunderbolts Vicious Smurfs Animated M3GAN 2.0 Blade Mission: Impossible – Dead Reckoning Part Captain America: Brave New World Wicked – Part Two Two The Unbreakable Boy Elio Spongebob M
Slide 22: Fourth Quarter & Full Year Fiscal 2023 Highlights
Fourth Quarter & Full Year Fiscal 2023 Highlights • Revenue and operating income increased in the fourth quarter and full year fiscal 2023 compared to prior year due to increased attendance across the circuit • Average ticket price up 8.3% and 10.9% for the fourth quarter and full year of fiscal 202
Slide 23: Outlook
Outlook • Customers across all ages and audience types have shown continue preference for moviegoing experience • Strong demand for blockbuster films, small and mid-sized films as well as alternative programming, including concert films • Expect theatrical exhibition to remain an important component
Slide 24: Marcus Hotels & Resorts
Marcus Hotels & Resorts 24
Slide 25: Diverse Portfolio
Diverse Portfolio 7 company majority-owned properties; manage 9 properties for other owners Grand Geneva Resort, AC Hotel Chicago Downtown, Saint Kate – The Arts Hotel, Lake Geneva, WI Chicago, IL Milwaukee, WI Lincoln Marriott Cornhusker, Hilton Milwaukee City Center, The Pfister Hotel, Hilton Madi
Slide 26: Strategic Growth
Strategic Growth Added New Joint-Venture Property with Management Contract • Through joint venture with Hempel Real Estate and Robinson Park, acquired Loews Minneapolis Hotel as minority investor • Completed hotel acquisition and assumed management of property in March 2024 • Lifestyle hotel featuri
Slide 27: Portfolio Management
Portfolio Management The Skirvin Hilton, Oklahoma City – Disposition • Historic hotel located in the heart of downtown Oklahoma City • Acquired a 60% interest through a joint venture in 2006, reopening the hotel in 2007 following an extensive historic renovation • Capital to be redeployed in Hotels
Slide 28: A Strategic Footprint
A Strategic Footprint Marcus Hotels Locations • Branded and independent first-class hotels • Nearly 60 years of hotel management experience • 4,600+ Rooms Managed • 345,000+ Square Feet of Meeting & Event Space • 40+ Restaurants, Bars, Lounges & Other F&B Outlets • 16 Managed Properties • 3 Luxuriou
Slide 29: A Leader in Our Markets and Industry
A Leader in Our Markets and Industry • Consistently outperforming our competitive sets Marcus Owned Market Share(1) • Expertise in management, 140.0 development, historic 135.9 135.0 renovations, asset 130.0 repositioning and F&B 125.0 120.0 • Operational excellence – 115.0 110.4 122.1 113.1 consist
Slide 30: Industry Performance
Industry Performance 30 Full-year: Top four chain scales post strong RevPAR” US., KPI % chg. YoY, Full-year 2028 occupancy ADR @RevPAR : i ec hall Lownrchaies Upper UpeeleUpstale Chains Upper MiseeslsMidsaleChaits Economy Chains Independents chains chain lersm Came ADR stronger than 2019 and 2022 To
Slide 31: Current Plans
Current Plans Operational Excellence and Portfolio Management Strategic Growth Financial Discipline • Reinvest in hotels to maintain and enhance their • Acquire hotel properties as investment fund value sponsor or joint venture partner • Leverage strong leisure demand to drive ADR • Elevate branding
Slide 32: Fourth Quarter & Full Year Fiscal 2023 Highlights
Fourth Quarter & Full Year Fiscal 2023 Highlights • Revenues before cost reimbursements increased 4.0% in the fourth quarter and 6.3% for the full year of fiscal 2023 compared to the prior year periods (excluding the impact from the sale of The Skirvin Hilton) • Comparable RevPAR increased 5.8% and
Slide 33: Outlook
Outlook • Economic environment will impact future RevPAR trends; hotel revenues have historically tracked closely with GDP • Leisure demand remains healthy with an increasing mix of group business driving F&B revenues • Hotel supply growth will likely be limited – favorable for existing hotels • Opt
Slide 34: Shareholder Value Creation
Shareholder Value Creation
Slide 35: Long-Term Value Maximization
Long-Term Value Maximization Theatre Expansion Hotel Expansion Reinvesting in Existing Assets • Acquisitions • Joint Ventures • Hotel & Theatre Renovations • New Builds • Management Contracts • New Amenities & Features • Creation of a Fund • F&B Innovations • DreamLoungers, UltraScreen DLX, SuperScr
Slide 36: Financial Performance
Financial Performance
Slide 37: Historical Financial Performance
Historical Financial Performance Revenues Operating Income Adjusted EBITDA (5) (in millions) (in millions) (in millions) Operating Income % of Revenues Adjusted EBITDA Adjusted EBITDA Margin % $900 $820.9 $120 25% $200 40% $800 $729.6 $83.2 $707.1 $68.2 $33.9 $677.4 $70 11.8% $8.3 $160 $149.4 $155.2
Slide 38: Historical Results by Segment
Historical Results by Segment (in millions) Revenues(1) (in millions) Operating Income (Loss) (in millions) $800 $100 $12 $10 $18 $227 $89 $77 $6 $19 $600 $227 $233 $0 $236 $(28) $8 $36 $400 $(121) $168 -$100 $556 $458 $200 $446 $88 $408 $(44) $271 $132 -$200 $0 2018 2019 2020 2021 2022 2023 2018 20
Slide 39: Appendix
APPENDIX
Slide 40: Fourth Quarter and Full Year 2023 Financial Highlights
Fourth Quarter and Full Year 2023 Financial Highlights Fourth Quarter and Full Year 2023 Financial Highlights (In thousands, except per share data) 13 Weeks Ended 52 Weeks Ended Dec. 28, Dec. 29, Dec. 28, Dec. 29, 2023 2022 2023 2022 Total revenues $ 161,526 $ 162,947 $ 729,575 $ 677,394 Operating i
Slide 41: Non-GAAP Reconciliation
Non-GAAP Reconciliation Reconciliation of Net earnings (loss) to Adjusted EBITDA (Unaudited) (In thousands) 13 Weeks Ended 52 Weeks Ended Dec. 28, Dec. 29, Dec. 28, Dec. 29, 2023 2022 2023 2022 Net earnings (loss) attributable to The Marcus Corporation $ (1,440) $ (9,319) $ 14,794 $ (11,972) Add (de
Slide 42: Non-GAAP Reconciliation by Reportable Segment
Non-GAAP Reconciliation Reconciliation of Operating income (loss) to Adjusted EBITDA by Reportable Segment (Unaudited) (In thousands) 13 Weeks Ended Dec. 28, 2023 52 Weeks Ended Dec. 28, 2023 Hotels & Corp. Hotels & Corp. Theatres Resorts Items Total Theatres Resorts Items Total Operating income (lo
Slide 43: Non-GAAP Reconciliation: Skirvin Hilton Hotel EBITDA
Non-GAAP Reconciliation Reconciliation of Hotel net earnings to Hotel EBITDA - Skirvin Hilton (unaudited) (in thousands) Sale price $ 36,750 Avoided capital expenditures 14,000 $ 50,750 LTM FY2019 Nov. 2022 Hotel net income (loss) $ 470 $ (78) Add (deduct): Interest expense 1,063 1,041 Income tax ex
Slide 44: Investor Presentation
INVESTOR PRESENTATION MARCH 2024
Marcus Corporation (The) — Q4 2023 Earnings Presentation on 6ix