Marcus Corporation (the) · NYSE:MCS
Marcus Corporation (the) — Q3 2024 Earnings Presentation
41 slides from Marcus Corporation (the)'s earnings presentation, Oct 31, 2024
Slide 1: Investor Presentation November 2024
I N V E S T O R P R E S E N TAT I O N | N O V E M B E R 2 0 2 4
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 LTM by Division • Fourth largest U.S. exhibitor • 995 screens at 79 locations in 17 states 40% 38% Revenues* 47% Operating Adjusted Income 53% EBITDA 60% 62% • Portfolio of 16 distinctive properties • Man
Slide 5: Company Overview
Company Overview LTM LTM Adjusted Revenues: EBITDA: (1) $708.8M $94.8M LTM Adj. Market Cap: EBITDA Margin: ~$685M 14.1%(1) (as of 11/11/2024) Since 1993 (1) Adjusted EBITDA is a Non-GAAP measurement equal to operating income plus depreciation and amortization, impairment charges, non-cash share-base
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: 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 9: 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 • $248.6 million in cash and revolving credit 40% 8 availabilit
Slide 10: Increasing Dividend; Long History of Returning Capital to Shareholders
Increasing Dividend; Long History of Returning Capital to Shareholders Annual Cash Dividends • Increased quarterly cash dividend to $0.07 in Q3 2023 $0.7 • Annual cash dividend was $0.68 prior to $0.64 suspension on 4/29/20 (3-year average yield of $0.60 $0.6 1.7%) $0.50 • 45 years of consecutive di
Slide 11: 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 39% payments and en
Slide 12: Third Quarter and First Three Months of 2024 Results
Third Quarter and First Three Months of 2024 Results Revenues Operating Income (Loss) Net Earnings (Loss) Adjusted EBITDA(1) (in millions) (in millions) (in millions) (in millions) $600 $568.0 $35 $32.8 $32.8 $100 $547.2 $90.5 $90 $500 $30 $25 $23.3 $80 $76.5 $25 $70 $400 $20.9 $20 $18.4 $60 $52.3 $
Slide 13: Marcus Theatres
Marcus Theatres 13
Slide 14: Leading U.S. Theatre Exhibitor
Leading U.S. Theatre Exhibitor Marcus Theatres by Location(1) 995 screens at ND 2 Fourth 79 locations in MN 8 WI NY 1 largest 20 PA 17 states(1) IA NE 4 4 OH 7 U.S. exhibitor IL 2 CO VA MO 8 KY 1 1 9 1 AR 1 GA TX LA 3 4 3 Added 37 Acquisition of Movie Marcus Theatres by Screen(1) theatres, 439 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 • 85% of company- • 83% of company- • 67% of company- • ~60% of existing • BistroPlex in-theatre owned the
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 • Launched Marcus Movie Club membership F&B concepts. take over existing leases. program in No
Slide 18: Several Blockbuster Films Performed Well During Q3 Fiscal 2024
Several Blockbuster Films Performed Well During Q3 Fiscal 2024 • Inside Out 2 and Deadpool & Wolverine broke records during the quarter • Despicable Me 4, Twisters, and It Ends With Us performed particularly well in Midwestern markets 18
Slide 19: Several Highly-Anticipated Films in Q4 Fiscal 2024
Several Highly-Anticipated Films in Q4 Fiscal 2024 • Exciting slate of diverse films in the fourth quarter of fiscal 2024 • Highly anticipated debuts of Gladiator II, Wicked, and Moana 2 to kick off the holiday season • Lord of The Rings: The War of the Rohirrim, Mufasa: The Lion King, and Sonic the
Slide 20: 2025 Film Slate Includes Highly Anticipated Films
2025 Film Slate Includes Highly Anticipated Films* 2025 Films Mickey 17 M3GAN 2.0 Tron: Ares Captain America: Brave New World Elio Mortal Kombat II Sinners How to Train Your Dragon Predator: Badlands Snow White F1 The Running Man Minecraft Jurassic World Rebirth Wicked: Part Two Thunderbolts Superma
Slide 21: Third Quarter Fiscal 2024 Highlights
Third Quarter Fiscal 2024 Highlights • Performance of several blockbuster films in Q3 helped drive record revenues, operating income and Adjusted EBITDA during the quarter • Average ticket price up 2.6% and average concession revenues per person increased 7.9% during the third quarter of fiscal 2024
Slide 22: 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 • Expect theatrical exhibition to remain an important component of studios’ business mod
Slide 23: Marcus Hotels & Resorts
Marcus Hotels & Resorts 23
Slide 24: 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 25: 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 26: A Strategic Footprint
A Strategic Footprint Marcus Hotels Locations • Branded and independent first-class hotels • Nearly 60 years of hotel management experience • 4,650+ Rooms Managed • 345,000+ Square Feet of Meeting & Event Space • 40+ Restaurants, Bars, Lounges & Other F&B Outlets • 16 Managed Properties • 3 Luxuriou
Slide 27: 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 135.0 135.9 renovations, asset 130.0 repositioning and F&B 125.0 120.0 108.1 • Operational excellence – 115.0 122.1 113.1 consist
Slide 28: Industry Performance
Industry Performance 28 Source: STR. © 2023 CoStar Group
Slide 29: 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 30: Third Quarter Fiscal 2024 Highlights
Third Quarter Fiscal 2024 Highlights • Record fiscal third quarter 2024 • Revenues before cost reimbursements increased 9.6% in the third quarter of fiscal 2024 compared to the prior year period • RevPAR increased 9.8% during the third quarter of fiscal 2024 compared to the same period in fiscal 202
Slide 31: Outlook
Outlook • Economic environment will impact future RevPAR trends; hotel revenues have historically tracked closely with GDP • Group business continues to grow, especially midweek • Expect some softening of leisure business • Well-positioned assets following renovations at The Pfister Hotel and Grand
Slide 32: Shareholder Value Creation
"Shareholder Value Creation
Slide 33: Long-Term Value Maximization
Long-Term Value Maximization Theatre Expansion Hotel Expansion Reinvesting in Existing Assets • Management Contracts & • Joint Ventures • Hotel & Theatre Renovations Take Over Restructured • Management Contracts • New Amenities & Features Leases • Creation of a Fund • F&B Innovations • Acquisitions
Slide 34: Financial Performance
Financial Performance —
Slide 35: Historical Financial Performance
Historical Financial Performance (4) Revenues Operating Income (Loss) Adjusted EBITDA (in millions) (in millions) (in millions) Operating Income % of Revenues Adjusted EBITDA Adjusted EBITDA Margin % $900 $820.9 $120 25% $200 25% $800 $729.6 $708.8 8.3% 1.2% 4.6% $155.2 $677.4 $70 2.8% $700 $150 $68
Slide 36: Historical Results by Segment
Historical Results by Segment (in millions) Revenues(1) (in millions) Operating Income (Loss) (in millions) $800 $100 $10 $18 $21 $227 $77 $6 $19 $600 $233 $0 $(28) $45 $236 $245 $8 $36 $400 $168 $(121) $556 -$100 $200 $88 $408 $458 $424 $(44) $271 $0 $132 -$200 2019 2020 2021 2022 2023 Q3 2024 2019
Slide 37: Appendix
[ml] The Marcus Corporation APPENDIX
Slide 38: Q3 and First Three Quarters 2024 Financial Highlights
Q3 and First Three Quarters 2024 Financial Highlights Q3 and First Three Quarters 2024 Financial Highlights (In thousands, except per share data) 13 Weeks Ended 39 Weeks Ended Sept. 26, Sept. 28, Sept. 26, Sept 28, 2024 2023 2024 2023 Total revenues $ 232,668 $ 208,766 $ 547,247 $ 568,049 Operating
Slide 39: Non-GAAP Reconciliation
Non-GAAP Reconciliation Reconciliation of Net earnings (loss) to Adjusted EBITDA (Unaudited) (In thousands) 13 Weeks Ended 39 Weeks Ended September 26, September 28, September 26, September 28, 2024 2023 2024 2023 Net earnings (loss) $ 23,314 $ 12,234 $ (8,773) $ 16,234 Add (deduct): Investment inco
Slide 40: 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 September 26, 2024 39 Weeks Ended September 26, 2024 Hotels & Corp. Hotels & Corp. Theatres Resorts Items Total Theatres Resorts Items Total Operating
Slide 41: Investor Presentation November 2024
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Marcus Corporation (The) — Q3 2024 Earnings Presentation on 6ix