The Marcus (MCS) Q4 2016 earnings summary

Executive summary

• Fiscal 2016 set records for revenue and operating income; net earnings rose 23.1% despite the prior-year comparison including an extra week of operations.

• Both theatres and hotels and resorts outperformed their respective industries; total shareholder return was 68% for fiscal 2016.

Financial highlights

• Revenue was $543.9M, up 2.3%; operating income was $70.0M, up 14.6%; net earnings attributable to shareholders were $37.9M, up 23.1%.

• Diluted EPS was $1.36, up 23.6%; quarterly dividends increased 11.1% in February 2017.

• Prior-year 53-week operations added an estimated $14.3M in revenue, $4.8M in operating income and $2.8M in net earnings, or $0.10 per diluted share.

• Fiscal 2016 theatre results included a one-time $3.3M Screenvision incentive payment after reaching an attendance milestone.

Outlook and guidance

• Fiscal 2017 capital expenditures were projected at $100M–$120M, excluding unidentified acquisitions; theatre spending was estimated at $80M–$95M and hotels and resorts at $20M–$25M.

• Interest expense was expected to rise by $1.5M–$2.0M in fiscal 2017, assuming no other change in total borrowings; the effective tax rate was expected near its historical 38%–40% range.

• Fiscal 2017 theatre average ticket price and concession sales per person were expected to increase; lodging group booking pace was ahead of the comparable prior-year point.

• Planned openings included a 10-screen Shakopee theatre and eight-screen BistroPlex in 2017; the 333-room Omaha Marriott Downtown was scheduled for summer 2017.