The Marcus (MCS) Q4 2017 earnings summary

Executive summary

• Record fiscal 2017 revenue of $622.7M, up 14.5% YoY, and operating income of $75.6M, up 8.1%; assets exceeded $1B for the first time.

• Net earnings attributable to shareholders reached a record $65.0M; results included a one-time $21.2M tax benefit, while earnings also set a record excluding that benefit.

Financial highlights

• Net earnings attributable to shareholders were $65.0M vs. $37.9M; diluted EPS was $2.29 vs. $1.36.

• Operating cash flow rose 31.9% to $109.0M; cash capital expenditures totaled $114.8M, up 37.3%.

• Net gain on asset dispositions was $4.0M vs. a $0.8M loss, including a $4.9M gain on the Westin Atlanta interest sale.

Outlook and guidance

• FY2018 capital expenditures are projected at $65M–$80M, excluding unidentified acquisitions; theatre capex is $50M–$60M and lodging capex $15M–$20M.

• FY2018 effective tax rate is expected at 25%–27%, excluding potential further federal or state rate changes.

• Theatre ticket prices and concession sales per patron are expected to rise in FY2018; projected film availability includes more films and alternate-content events than FY2017.

• Lodging group bookings and banquet/catering pace were ahead of the prior year; new Grand Geneva villas and improving SafeHouse Chicago results are expected to support FY2018.