The Marcus (MCS) Q4 2022 earnings summary

Executive summary

• FY22 recovery across theatres and hotels lifted revenue 47.8% YoY to $677.4M and Adjusted EBITDA to $85.1M; GAAP net loss attributable narrowed to $12.0M from $43.3M.

• Hotels exceeded pre-pandemic revenue levels; theatre revenue reached 71% of FY19 as fewer wide-release films constrained recovery.

Financial highlights

• Revenue was $677.4M vs. $458.2M; operating income was $8.3M vs. an operating loss of $41.5M.

• Net loss attributable to shareholders was $12.0M, or $0.39 diluted EPS, compared with $43.3M, or $1.42 diluted EPS, in FY21.

• FY22 operating results included $1.5M of theatre impairment charges; FY21 benefited from $10.7M in nonrecurring grants and tax credits and included $5.8M of impairment charges.

• Net cash from operations rose to $93.2M from $46.3M, including favorable collection timing and $22.7M in refundable income taxes.

Outlook and guidance

• FY23 cash capital expenditures are estimated at $60M-$75M: theatres $15M-$20M and hotels and resorts $45M-$55M.

• FY23 theatre results are expected to improve but remain below FY19; film releases are expected to increase, while wide-release volume remains below pre-pandemic levels.

• FY23 hotel operations are expected to improve, but pre-COVID occupancy is not expected to return due to lagging business travel; the expected effective tax rate is 24%-26%, subject to tax changes and one-time items.

• Potential FY23 real-estate sale proceeds are estimated at $5M-$10M, depending on market demand.