The Marcus(MCS) - 2025 Q2 - Quarterly Results

Overall Financial Performance Second Quarter Fiscal 2025 Highlights The company reported significant year-over-year growth in Q2 2025, with revenues up 17.0% to $206.0 million, shifting from a net loss to a net profit of $7.3 million, and Adjusted EBITDA growing by 46.9% primarily due to strong Marcus Theatres performance Q2 Fiscal 2025 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $206.0 million | $176.0 million | +17.0% | | Operating Income | $13.0 million | $2.2 million | +491.8% | | Net Earnings (Loss) | $7.3 million | ($20.2 million) | N/A | | Net Earnings (Loss) per Diluted Share | $0.23 | ($0.64) | N/A | | Adjusted EBITDA | $32.3 million | $22.0 million | +46.9% | - The net loss for Q2 2024 included a negative impact of $15.0 million ($0.47 per share) from convertible senior notes repurchases, with the net loss being $5.2 million excluding this impact[7] First Half Fiscal 2025 Highlights For the first half of fiscal 2025, revenues increased by 12.8% to $354.8 million, with the company significantly narrowing its operating loss to $7.4 million and its net loss to $9.5 million, while Adjusted EBITDA increased by 32.0% to $32.0 million First Half Fiscal 2025 Key Financial Metrics | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $354.8 million | $314.6 million | +12.8% | | Operating Loss | ($7.4 million) | ($14.4 million) | +48.6% | | Net Loss | ($9.5 million) | ($32.1 million) | +70.4% | | Net Loss per Diluted Share | ($0.31) | ($1.03) | +69.9% | | Adjusted EBITDA | $32.0 million | $24.3 million | +32.0% | Business Segment Performance Marcus Theatres® The Marcus Theatres division was the primary driver of growth in Q2 2025, with revenues increasing 29.8% to $131.7 million and operating income surging to $15.7 million, fueled by a 26.7% increase in same-store attendance, higher ticket prices, and increased concession spending per person, all benefiting from a stronger film slate Marcus Theatres Q2 2025 Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $131.7 million | $101.5 million | +29.8% | | Operating Income | $15.7 million | $2.8 million | +460.7% | | Adjusted EBITDA | $26.5 million | $15.1 million | +76.2% | - Same-store attendance increased by 26.7%, average ticket prices rose by 2.0%, and average concession revenues per person grew by 3.1% compared to the prior year quarter[9] - Top performing films in Q2 included A Minecraft Movie, Lilo & Stitch, and Thunderbolts, with the company anticipating continued momentum from a strong film slate for the remainder of the year[9][10] - The company completed renovations at theatres in New York and Pennsylvania, with another completed in July in Kentucky, to enhance lobbies, concessions, and bar areas[11] Marcus Hotels & Resorts® The Marcus Hotels & Resorts division reported stable revenues of $64.6 million before cost reimbursements, a slight 1.2% increase, but operating income decreased to $4.2 million primarily due to a $1.7 million increase in depreciation from recent renovations, with the Hilton Milwaukee renovation negatively impacting performance and causing a 2.9% decrease in RevPAR at company-owned hotels Marcus Hotels & Resorts Q2 2025 Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenues (before cost reimbursements) | $64.6 million | $63.8 million | +1.2% | | Operating Income | $4.2 million | $6.1 million | -31.1% | | Adjusted EBITDA | $11.2 million | $11.4 million | -1.8% | - Revenue per available room (RevPAR) at company-owned hotels decreased by 2.9% due to room displacement from the Hilton Milwaukee renovation[14] - Despite some industry-wide softening in leisure travel, group demand at Marcus Hotels & Resorts remains strong, and the Hilton Milwaukee guest room renovation was completed at the end of June 2025[14][15] Financial Statements Consolidated Statements of Operations The consolidated income statement shows a significant turnaround in Q2 2025, with net earnings of $7.3 million compared to a $20.2 million net loss in Q2 2024, and for the first half, the net loss narrowed to $9.5 million from $32.1 million year-over-year, driven by strong revenue growth, particularly in theatre admissions and concessions which rose 28.3% and 29.7% respectively in the quarter Consolidated Statements of Operations Highlights (in thousands) | Line Item | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $206,043 | $176,032 | $354,809 | $314,579 | | Operating Income (Loss) | $13,007 | $2,237 | ($7,405) | ($14,428) | | Net Earnings (Loss) | $7,321 | ($20,221) | ($9,495) | ($32,087) | | Net Earnings (Loss) per Share - Diluted | $0.23 | ($0.64) | ($0.31) | ($1.03) | Condensed Consolidated Balance Sheets As of June 30, 2025, the company's balance sheet shows total assets of $1.016 billion and total shareholders' equity of $448.4 million, with cash and cash equivalents decreasing from $40.8 million to $14.9 million and long-term debt increasing from $149.0 million to $170.1 million compared to the end of fiscal 2024 Key Balance Sheet Items (in thousands) | Account | June 30, 2025 | Dec 26, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $14,901 | $40,841 | | Total Assets | $1,016,307 | $1,044,528 | | Long-term debt | $170,116 | $149,007 | | Total Liabilities | $567,889 | $579,662 | | Total Shareholders' Equity | $448,418 | $464,866 | Supplemental Data (Cash Flow) For the first six months of 2025, net cash used in operating activities was $3.7 million, a significant decrease from the $20.9 million provided in the same period of 2024, while capital expenditures for the first half totaled $39.9 million, an increase from $35.3 million in the prior year period Cash Flow Summary (in thousands) | Line Item | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net cash from operating activities | $31,640 | $35,975 | ($3,689) | $20,877 | | Net cash used in investing activities | ($8,766) | ($19,882) | ($31,545) | ($40,640) | | Net cash from (used in) financing activities | ($21,898) | $1,139 | $7,354 | ($2,290) | | Capital expenditures | ($16,910) | ($19,843) | ($39,915) | ($35,283) | Non-GAAP Financial Measures & Reconciliations Reconciliation of Net Earnings (Loss) to Adjusted EBITDA This section reconciles the GAAP measure of Net Earnings (Loss) to the non-GAAP measure of Adjusted EBITDA, showing that for Q2 2025, Net Earnings of $7.3 million reconciled to an Adjusted EBITDA of $32.3 million, and for H1 2025, a Net Loss of $9.5 million reconciled to an Adjusted EBITDA of $32.0 million Reconciliation to Adjusted EBITDA (in thousands) | Line Item | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Earnings (Loss) | $7,321 | ($20,221) | ($9,495) | ($32,087) | | Depreciation and amortization | $17,603 | $16,699 | $35,441 | $32,714 | | Interest expense | $2,981 | $2,564 | $5,803 | $5,098 | | Income tax expense (benefit) | $2,746 | $5,719 | ($4,612) | ($1,650) | | Debt conversion expense | — | $13,908 | — | $13,908 | | Adjusted EBITDA | $32,267 | $21,960 | $32,008 | $24,251 | Reconciliation of Operating Income (Loss) to Adjusted EBITDA by Reportable Segment This table provides a segment-level reconciliation from Operating Income (Loss) to Adjusted EBITDA, indicating that in Q2 2025, the Theatres segment's Adjusted EBITDA was $26.5 million, a significant increase from $15.1 million in the prior year, while the Hotels & Resorts segment's Adjusted EBITDA remained stable at $11.2 million Segment Adjusted EBITDA (in thousands) | Segment | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Theatres | $26,546 | $15,069 | $30,240 | $21,225 | | Hotels & Resorts | $11,226 | $11,426 | $12,237 | $11,415 | | Corporate Items | ($5,505) | ($4,535) | ($10,469) | ($8,389) | | Total | $32,267 | $21,960 | $32,008 | $24,251 | Other Information Fiscal Year Change The company has changed its fiscal year-end from the last Thursday of each year to December 31, effective December 27, 2024, meaning future quarterly results will be reported for three-month periods ending on March 31, June 30, September 30, and December 31 - Effective December 27, 2024, the company's fiscal year will end on December 31, aligning quarterly results with standard calendar quarters[16] Conference Call and Webcast Management will host a conference call on Friday, August 1, 2025, at 10:00 a.m. Central Time to discuss the quarterly results, with dial-in and webcast details provided in the press release for interested parties - A conference call to discuss Q2 2025 results is scheduled for August 1, 2025, at 10:00 a.m. Central / 11:00 a.m. Eastern time[17] Forward-Looking Statements This section contains the standard safe harbor statement, cautioning that forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially, listing several potential risk factors including the availability and appeal of motion pictures, theatre industry dynamics, economic conditions, and competition - The company identifies key risks that could impact future performance, including: - Availability and audience appeal of motion pictures[22] - Effects of adverse economic conditions[22] - Competitive conditions in its markets[22] - Ability to achieve benefits from strategic initiatives[23] - Changes in the cost of labor and supplies23