The Marcus(US:MCS)2021-05-05 21:24Financial Data and Key Metrics Changes - The first quarter results were worse than the previous year but showed improvement compared to the last three quarters of fiscal 2020, with non-GAAP adjusted EBITDA over $10 million better than the fiscal 2020 fourth quarter [8] - Interest expense increased due to higher borrowings and average interest rates, with the first quarter including over $600,000 of non-cash amortization of debt issuance costs [10] - The effective income tax rate was 27.7% for the quarter, with an anticipated range of 24% to 26% for the remaining quarters of fiscal 2021 [11] Business Line Data and Key Metrics Changes - Theater attendance was down 81.4% compared to the prior year, but adjusted EBITDA improved by nearly $5 million compared to the last quarter [9] - Hotels and resorts reported adjusted EBITDA that was $6 million better than the last quarter and over $2 million better than last year [9] - Revenue per available room (RevPAR) for owned hotels decreased 46.4%, but outperformed comparable upper upscale hotels by approximately 8 percentage points [15] Market Data and Key Metrics Changes - U.S. box office receipts decreased 89.7% during the first quarter, with admission revenues declining 80.7% for comparable theaters, outperforming the industry average by 9 percentage points [13] - The average admission price for comparable theaters increased by 3.7%, and average concession revenues per person increased by 16% [14] - The average occupancy rate for owned hotels was 28.3%, with a 2.6% increase in average daily rate (ADR) [16] Company Strategy and Development Direction - The company aims to maintain a solid balance sheet while exploring growth opportunities, particularly in acquiring quality theater properties [45] - There is a focus on less capital-intensive strategies for hotel growth, including management contracts and strategic partnerships [30] - The company is optimistic about the recovery in both theater and hotel divisions, emphasizing safety and well-being as priorities [22][41] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery due to vaccination progress, with over 50% of the eligible adult population vaccinated [21] - The company anticipates a continued strong demand for leisure travel, particularly during the summer months, and expects improvements in business travel as offices reopen [29] - There are uncertainties regarding the release schedule of films and consumer behavior post-pandemic, but the company believes it is prepared to navigate these challenges [40] Other Important Information - The company reported cash and revolving credit availability of $213 million at the end of the first quarter, with expectations of an additional income tax refund of approximately $24 million later in the year [17][18] - The company is pursuing opportunities to reinforce liquidity, including the sale of surplus real estate, with expected proceeds of $10 million to $40 million [18] Q&A Session All Questions and Answers Question: How opportunistic can the company be in growing its network given the current market conditions? - The company aims to keep its balance sheet solid while looking for opportunities to grow its network with quality properties, acknowledging that some theaters may not reopen [45] Question: Will the company show Netflix's upcoming film "Army of the Dead" and what is the opportunity from OTT content? - The company plans to show the film and sees potential for more content from OTT players to benefit theatrical releases [47] Question: Can the company quantify the market share gains on the theater side and the impact of permanent theater closures? - The company has not quantified permanent closures yet but anticipates that some theaters will close, potentially benefiting its market share [66] Question: What are the trends in concession sales and how might they change as attendance increases? - The company noted that shorter lines and app ordering have contributed to increased concession sales, and it aims to maintain this dynamic as attendance grows [70] Question: How does the company view its real estate assets and potential sales? - The company has a range of potential asset sales beyond the $10 million to $40 million previously mentioned, indicating that it could be higher in the long run [74]