The Marcus Corporation Reports Fourth Quarter and Fiscal 2013 Results

  The Marcus Corporation Reports Fourth Quarter and Fiscal 2013 Results

   Comparisons impacted by weaker film slate, additional week last year and
                                unusual items

Business Wire

MILWAUKEE -- July 25, 2013

The Marcus Corporation (NYSE: MCS) today reported results for the fourth
quarter and fiscal year ended May 30, 2013.

Fourth Quarter Fiscal 2013 Highlights

  *Total revenues for the 13-week fourth quarter of fiscal 2013 were
    $100,590,000, a 6.7% decrease from revenues of $107,845,000 for the
    14-week fourth quarter of fiscal 2012.
  *Operating income was $8,256,000 for the 13-week fourth quarter of fiscal
    2013, a 35.7% decrease from operating income of $12,831,000 for the
    14-week fourth quarter of fiscal 2012.
  *Net earnings attributable to The Marcus Corporation were $3,475,000 for
    the 13-week fourth quarter of fiscal 2013, a 48.1% decrease from net
    earnings attributable to The Marcus Corporation of $6,699,000 for the
    14-week fourth quarter of fiscal 2012.
  *Net earnings per diluted common share attributable to The Marcus
    Corporation were $0.13 for the 13-week fourth quarter of fiscal 2013, a
    43.5% decrease from net earnings per diluted common share attributable to
    The Marcus Corporation of $0.23 for the 14-week fourth quarter of fiscal
    2012.
  *Last year’s results benefited from an additional 53^rd week of operations
    (the 14-week quarter) that contributed approximately $7.6 million in
    revenues, $2.1 million in operating income and $1.1 million, or $0.04 per
    diluted common share, in net earnings to the fourth quarter and fiscal
    2012 results.
  *Last year’s results also benefited from an approximately $700,000 one-time
    pre-tax gain on sale of securities held for investment purposes, or
    approximately $0.02 per diluted common share.

Fiscal 2013 Highlights

  *Total revenues were $412,836,000 for the 52-week fiscal 2013, a 0.3%
    decrease from revenues of $413,898,000 for the 53-week fiscal 2012.
  *Operating income was $38,204,000 for the 52-week fiscal 2013, a 17.9%
    decrease from operating income of $46,515,000 for the 53-week fiscal 2012.
  *Net earnings attributable to The Marcus Corporation were $17,506,000 for
    the 52-week fiscal 2013, a 23.0% decrease from net earnings attributable
    to The Marcus Corporation of $22,734,000 for the 53-week fiscal 2012.
  *Net earnings per diluted common share attributable to The Marcus
    Corporation were $0.63 for the 52-week fiscal 2013, a 19.2% decrease from
    net earnings per diluted common share of $0.78 for the 53-week fiscal
    2012.

“A weaker film slate for Marcus Theatres® and the fact that fiscal 2013 was a
52-week year compared to last year’s 53 weeks contributed to our reduced
results for the fourth quarter and fiscal 2013. Not surprisingly in the
cyclical theatre industry, our business has improved significantly in recent
weeks, thanks to a very strong early summer film line-up. Comparative results
for Marcus Hotels & Resorts were also negatively impacted by the extra week
last year, as well as difficult comparisons at several of our group-oriented
hotels. However, just like our theatres, these same group-focused hotels are
also off to a good start in the new summer quarter,” said Gregory S. Marcus,
president and chief executive officer of The Marcus Corporation.

“Our fiscal 2013 results were also impacted by unusual items totaling $4.8
million, or approximately $0.10 per diluted common share. This includes
approximately $3.3 million of costs related to the settlement of lawsuits
concerning our Las Vegas property and $1.5 million of impairment charges,
primarily in the theatre division. Without the impact of the additional week
of operations last year and the unusual items in both years, our earnings per
share for fiscal 2013 were essentially even with last year, despite the weaker
film slate.”

Marcus Theatres^®

“Marcus Theatres had a difficult comparison against last year’s record fourth
quarter and full year results. Last year’s fourth quarter included two
blockbuster films, The Hunger Games and The Avengers, which ended up being our
highest grossing films of the year. Without comparable films, particularly
during March and April, and one less week in the quarter, we simply couldn’t
match last year’s results,” said Marcus.

“The top films in the fourth quarter of fiscal 2013 were Iron Man 3 (3D), Oz:
The Great and Powerful (3D) and The Croods. (3D),” said Bruce J. Olson, senior
vice president of The Marcus Corporation and president of Marcus Theatres. For
all of fiscal 2013, the best performing films were The Dark Knight Rises, Iron
Man 3 (3D), The Hobbit: An Unexpected Journey (3D), The Twilight Saga:
Breaking Dawn – Part 2 and Skyfall.

Olson said the new fiscal year is off to an excellent start, with much
stronger film product. “Man of Steel, Monsters University (3D), World War Z
(3D) and Despicable Me 2 (3D) have contributed to a great summer so far. Other
potential hits opening in the coming weeks include The Wolverine (3D), The
Smurfs 2 (3D), 2 Guns (3D), Planes (3D)  and Elysium (3D). Our box office
revenues at this point in the first quarter are up substantially over the same
period last year, illustrating how critical a good film line-up is to our
results,” added Olson.

“We continue to invest in our existing properties and expand our successful
food and beverage concepts. We opened our fourth Take Five cocktail lounge at
the Village Pointe Cinema in Omaha, Neb. in May and our fifth Take Five, which
also serves Zaffiro’s pizza, opened at the Point Cinema in Madison, Wis. in
July. Our 15^th UltraScreen® is under construction at the Gurnee Cinema in
Gurnee, Ill. and an extensive renovation of the 20 Grand Cinema in Omaha, Neb.
is underway. The remodeling of the 20 Grand includes the addition of a Take
Five Lounge, Zaffiro’s Express and premium seating in all auditoriums. The
Take Five Lounge concept, with its full-service bar, chef-inspired menu and
big-screen TVs, has been such a great addition to our theatres that we plan to
add several more locations in fiscal 2014,” said Olson.

Marcus^® Hotels & Resorts

“Revenues for Marcus Hotels & Resorts increased 4.0% for the year. Revenue per
available room (RevPAR) for comparable company-owned hotels was up 0.6% for
the fourth quarter and 3.4% for the full year, driven by higher occupancy and
an increase in the average daily rate,” said Marcus.

“The average daily rate increased for the tenth consecutive quarter and the
third straight year. We are pleased with the continued recovery of the lodging
industry, however overall rates are still not back to pre-recession levels and
group business continues to be challenged,” said Kirk A. Rose, president of
Marcus Hotels & Resorts. He noted that in addition to the extra week last year
and the Las Vegas legal costs, the division’s fiscal 2013 results were also
impacted by expected winter-season losses at its newest hotel, The Cornhusker,
A Marriott Hotel, in Lincoln, Neb., while it is being repositioned.

“We are currently overseeing an extensive, multi-million-dollar renovation at
The Cornhusker that includes our second Miller Time Pub & Grill restaurant
developed in association with world-class brewer MillerCoors. The new
restaurant, which is expected to open in August, will feature certified beer
experts and creative beer and food pairings, all in a friendly, relaxing
environment,” said Rose.

He added that exclusive club lounges at The Pfister Hotel in Milwaukee and the
Grand Geneva Resort & Spa in Lake Geneva, Wis. opened during the fourth
quarter and have been well-received by guests.

“The summer season has started strong and we expect our Milwaukee hotels to
benefit from the city’s many festivals and events, including the
Harley-Davidson 110^th anniversary celebration on Labor Day weekend. We are
continuing our focus on growing the division, including pursuing potential
opportunities for additional management contracts, some of which may include
small equity investments,” added Rose.

Summary

“In fiscal 2013, we returned capital to shareholders through cash dividends,
including a special $1.00 cash dividend in December, and through share
repurchases totaling approximately 350,000 shares in the fourth quarter and
nearly 2.2 million shares for the year,” said Marcus.

“Our debt-to-total capitalization ratio was 44% at the end of the year and we
had $118 million of unused credit lines at year end. We also have a new $225
million credit facility in place and we recently took advantage of
historically low interest rates by entering into an agreement to issue $50
million of 4.02% senior notes maturing in 2025. With our strong financial
position and available capital, we believe we are well positioned to pursue
our growth strategies and to continue our commitment to enhancing long-term
shareholder value,” he added.

Conference Call and Webcast

Marcus Corporation management will host a conference call today, July 25,
2013, at 10:30 a.m. Central/11:30 a.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 website:
www.marcuscorp.com, or by dialing 1-617-399-5125 and entering the passcode
38492440. Listeners should dial in to the call at least 5 - 10 minutes prior
to the start of the call or should go to the website 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 1, 2013, by
dialing 1-888-286-8010 and entering the passcode 67798334. The Webcast of the
conference call will be archived on the company’s website until its next
earnings release.

About The Marcus Corporation

Headquartered in Milwaukee, Wisconsin, The Marcus Corporation is a leader in
the lodging and entertainment industries, with significant company-owned real
estate assets. The Marcus Corporation’s theatre division, Marcus Theatres^®,
currently owns or manages 686 screens at 55 locations in Wisconsin, Illinois,
Iowa, Minnesota, Nebraska, North Dakota and Ohio. The company’s lodging
division, Marcus^® Hotels & Resorts, owns and/or manages 20 hotels, resorts
and other properties in 11 states. For more information, please visit the
company’s website 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 may 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 other industry dynamics such 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, reduced operating profits during major
property renovations, 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 of 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 the 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 or incidents such as the tragedy in a movie theatre in Colorado.
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
(In thousands, except per share data)
                                                            
                                                                     
                     13 Weeks        14 Weeks        52 Weeks        53 Weeks
                     Ended           Ended           Ended           Ended
                     (Unaudited)     (Unaudited)     (Unaudited)     (Audited)
                     May 30,         May 31,         May 30,         May 31,
                     2013            2012            2013            2012
                                                                     
Revenues:
Theatre              $ 32,424        $ 37,587        $ 134,523       $ 142,103
admissions
Rooms                  24,543          24,653          99,668          94,890
Theatre                18,172          19,842          73,189          74,478
concessions
Food and               13,100          13,550          55,458          54,465
beverage
Other revenues        12,351        12,213        49,998        47,962  
Total revenues         100,590         107,845         412,836         413,898
                                                                     
Costs and
expenses:
Theatre                28,271          31,333          115,078         119,009
operations
Rooms                  10,056          9,480           38,260          35,896
Theatre                4,884           4,793           19,816          18,447
concessions
Food and               10,826          10,402          43,062          41,022
beverage
Advertising and        5,481           5,836           23,571          22,551
marketing
Administrative         10,378          11,739          45,266          43,825
Depreciation and       8,337           8,416           33,827          34,525
amortization
Rent                   2,110           2,065           8,418           8,247
Property taxes         3,821           3,347           14,836          13,106
Other operating        7,693           7,603           30,986          30,755
expenses
Impairment            477           -             1,512         -       
charge
Total costs and       92,334        95,014        374,632       367,383 
expenses
                                                                     
Operating income       8,256           12,831          38,204          46,515
                                                                     
Other income
(expense):
Investment             193             898             494             1,155
income
Interest expense       (2,454  )       (2,298  )       (9,309  )       (9,272  )
Extinguishment         -               -               6,008           -
of debt
Gain (loss) on
disposition of
property,              23              161             (266    )       (759    )
equipment and
other assets
Equity earnings
(losses) from
unconsolidated        (132    )      10            (450    )      (200    )
joint ventures,
net
                      (2,370  )      (1,229  )      (3,523  )      (9,076  )
                                                                     
Earnings before        5,886           11,602          34,681          37,439
income taxes
Income taxes          2,299         4,903         11,350        14,705  
Net earnings           3,587           6,699           23,331          22,734
Net earnings
attributable to       112           -             5,825         -       
noncontrolling
interests
Net earnings
attributable to      $ 3,475        $ 6,699        $ 17,506       $ 22,734  
The Marcus
Corporation
                                                                     
Net earnings per
common share
attributable to
The Marcus
Corporation -        $ 0.13          $ 0.23          $ 0.63          $ 0.78
diluted
                                                                     
Weighted-average
shares                 27,090          29,143          27,865          29,308
outstanding -
diluted
                                                                               

THE MARCUS CORPORATION
Condensed Consolidated Balance Sheets
(In thousands)
                                                           
                                                                
                                                (Unaudited)     (Audited)
                                                May 30,         May 31,
                                                2013            2012
                                                                
Assets:
                                                                
Cash and cash equivalents                       $  18,053       $ 12,402
Accounts and notes receivable                      8,568          8,467
Refundable income taxes                            255            2,950
Deferred income taxes                              2,877          2,797
Other current assets                               6,384          7,020
Property and equipment, net                        625,757        614,645
Other assets                                      84,802        84,730
                                                                
Total Assets                                    $  746,696      $ 733,011
                                                                
Liabilities and Shareholders' Equity:
Accounts and notes payable                      $  25,330       $ 18,945
Taxes other than income taxes                      14,000         13,110
Other current liabilities                          36,123         37,102
Current portion of capital lease obligation        4,562          4,189
Current maturities of long-term debt               11,193         97,918
Capital lease obligation                           28,241         31,489
Long-term debt                                     231,580        106,276
Deferred income taxes                              43,516         44,372
Deferred compensation and other                    35,455         35,821
Equity                                            316,696       343,789
                                                                
Total Liabilities and Shareholders' Equity      $  746,696      $ 733,011
                                                                  

THE MARCUS CORPORATION
Business Segment Information
(Unaudited)
(In thousands)
                                                            
                                                                     
                                       Hotels/       Corporate
                         Theatres      Resorts       Items           Total
                                                                     
13 Weeks Ended May
30, 2013
Revenues                 $ 53,702      $ 46,726      $ 162           $ 100,590
Operating income           9,881         1,558         (3,183  )       8,256
(loss)
Depreciation and           4,103         4,087         147             8,337
amortization
                                                                     
14 Weeks Ended May
31, 2012
Revenues                 $ 60,767      $ 46,834      $ 244           $ 107,845
Operating income           13,625        2,727         (3,521  )       12,831
(loss)
Depreciation and           4,269         4,021         126             8,416
amortization
                                                                     
52 Weeks Ended May
30, 2013
Revenues                 $ 219,533     $ 192,676     $ 627           $ 412,836
Operating income           40,907        10,662        (13,365 )       38,204
(loss)
Depreciation and           16,753        16,520        554             33,827
amortization
                                                                     
53 Weeks Ended May
31, 2012
Revenues                 $ 227,914     $ 185,177     $ 807           $ 413,898
Operating income           47,065        12,706        (13,256 )       46,515
(loss)
Depreciation and           18,189        15,837        499             34,525
amortization
                                                                       

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