Marcus Corporation (the) · NYSE:MCS
Marcus Corporation (the) — Q1 2024 Earnings Presentation
44 slides from Marcus Corporation (the)'s earnings presentation, May 2, 2024
Slide 1: Investor Presentation May 2024
I N V E S T O R P R E S E N TAT I O N | M AY 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 • 993 screens at 79 locations in 17 states 38% 33% 38% Revenues* Operating Adjusted Income EBITDA 62% 62% 67% • Portfolio of 16 distinctive properties • Man
Slide 5: Company Overview
Company Overview LTM LTM Adjusted Revenues: EBITDA: (1) $715.8M $101.6M LTM Adj. Market Cap: EBITDA Margin: ~$361.4M 15.0%(1) (as of 5/7/2024) Since 1993 (1) Adjusted EBITDA is a Non-GAAP measurement equal to operating income plus depreciation and amortization, impairment charges, non-cash share-bas
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 • $237.4 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 $0.64 • Annual cash dividend was $0.68 prior to $0.60 $0.6 suspension on 4/29/20 (3-year average $0.50 yield of 1.7%) $0.5 $0.45 • 45 years of con
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: First Quarter 2024 Results
First Quarter 2024 Results Revenues Operating Loss Net Earnings (Loss) Adjusted EBITDA(1) (in millions) (in millions) (in millions) (in millions) $155 $0 $10 $9.5 $152.3 Q1 2023 Q1 2024 $0 -$2 Q1 2023 Q1 2024 $150 -$4 $8 -$2 -$6 $145 -$4 $6 -$8 -$10 -$6 $140 $138.5 $(9.0) $4 -$12 -$8 $2.3 $135 -$14
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 2 Fourth 79 locations in MN 7 WI NY 1 largest 20 PA 17 states(1) IA NE 4 5 OH 7 U.S. exhibitor IL 2 CO VA MO 8 KY 1 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 • Expand MovieFlex subscription program to F&B concepts. encourage more frequent movie going.
Slide 18: Several Films Performed Well During Q1 Fiscal 2024
Several Films Performed Well During Q1 Fiscal 2024 • Several films contributed to first quarter fiscal 2024 results, including Dune: Part Two, Kung Fu Panda 4, Wonka, Bob Marley: One Love and Migration 18
Slide 19: Q2 Fiscal 2024 Films Off to a Good Start
Q2 Fiscal 2024 Films Off to a Good Start • Several new and first quarter carryover films have contributed to early second quarter fiscal 2024 results, including Godzilla x Kong: The New Empire, Ghostbusters: Frozen Empire, Civil War, Kung Fu Panda 4 and Challengers 19
Slide 20: Several Exciting Films Planned for 2024
Several Exciting Films Planned for 2024* Q2 Q3 Q4 Godzilla x Kong: A Quiet Place: Day Harold and the Joker: Folie à Deux IF The New Empire One Purple Crayon Venom Sequel The Strangers: Horizon: Horizon: Gladiator Sequel The First Omen Chapter One An American Saga An American Saga Ch. 1 Ch. 2 Wicked
Slide 21: 2025 Film Slate Includes Highly Anticipated Films
2025 Film Slate Includes Highly Anticipated Films* 2025 Films Paddington in Puru Michael Superman: Legacy Mickey 17 Thunderbolts Fantastic Four Smurfs Animated M3GAN 2.0 Blade Mission: Impossible – Dead Reckoning Part Captain America: Brave New World Wicked – Part Two Two The Unbreakable Boy Elio Sp
Slide 22: First Quarter Fiscal 2024 Highlights
First Quarter Fiscal 2024 Highlights • Production delays caused by the WGA and SAG-AFTRA labor strikes in 2023, resulted in fewer blockbuster films openings during first quarter of fiscal 2024 compared to prior year • As a result, revenue and operating income decreased in the first quarter of fiscal
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 • Expect theatrical exhibition to remain an important component of studios’ business mod
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 • Divested in December 2022 225 | 30%
Slide 28: A Strategic Footprint
A Strategic Footprint Marcus Hotels Locations • Branded and independent first-class hotels • Nearly 60 years of hotel management experience • 4,650+ Rooms Managed • 345,000+ Square Feet of Meeting & Event Space • 40+ Restaurants, Bars, Lounges & Other F&B Outlets • 16 Managed Properties • 3 Luxuriou
Slide 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 135.0 135.9 renovations, asset 130.0 repositioning and F&B 125.0 120.0 108.1 • Operational excellence – 115.0 122.1 113.1 consist
Slide 30: Industry Performance
Industry Performance 30 Source: STR. © 2023 CoStar Group
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: First Quarter Fiscal 2024 Highlights
First Quarter Fiscal 2024 Highlights • Revenues before cost reimbursements increased 3.8% in the first quarter of fiscal 2024 compared to the prior year period • RevPAR increased 2.1% during the first quarter of fiscal 2024 compared to the same period in fiscal 2023 • Outperformed competitive sets b
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 • 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 36: Financial Performance
Financial Performance —
Slide 37: Historical Financial Performance
Historical Financial Performance (4) Revenues Operating Income 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 $715.8 $68.2 $8.3 $33.9 $26.3 $155.2 $677.4 $70 $700 $150 4.6% 3.
Slide 38: Historical Results by Segment
Historical Results by Segment (in millions) Revenues(1) (in millions) Operating Income (Loss) (in millions) $800 $100 $10 $18 $17 $227 $77 $6 $19 $600 $233 $235 $0 $(28) $236 $8 $36 $29 $400 $168 $(121) $556 -$100 $200 $88 $408 $458 $443 $(44) $271 $0 $132 -$200 2019 2020 2021 2022 2023 Q1 2024 2019
Slide 39: Appendix
[ml] The Marcus Corporation APPENDIX
Slide 40: First Quarter 2024 Financial Highlights
First Quarter 2024 Financial Highlights First Quarter 2024 Financial Highlights (In thousands, except per share data) 13 Weeks Ended March 28, March 30, 2024 2023 Total revenues $ 138,547 $ 152,276 Operating loss (16,665) (8,988) Net loss (11,866) (9,466) Net loss per share (0.38) (0.31) (1) Adjuste
Slide 41: Non-GAAP Reconciliation
Non-GAAP Reconciliation Reconciliation of Net loss to Adjusted EBITDA (Unaudited) (In thousands) 13 Weeks Ended March 28, March 30, 2024 2023 Net loss attributable to The Marcus Corporation $ (11,866) $ (9,466) Add (deduct): Investment income (692) (260) Interest expense 2,534 3,008 Other expense (i
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 March 28, 2024 Hotels & Corp. Theatres Resorts Items Total Operating loss $ (5,739) $ (5,162) $ (5,764) $ (16,665) Depreciation and amortization 11,033
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 May 2024
I N V E S T O R P R E S E N TAT I O N | M AY 2 0 2 4
Marcus Corporation (The) — Q1 2024 Earnings Presentation on 6ix