UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June 29, 2023~~March 28, 2024


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number 1-12604


THE MARCUS CORPORATION
(Exact name of registrant as specified in its charter)


Wisconsin						39-1139844
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

100 East Wisconsin Avenue, Suite 1900 Milwaukee ,Wisconsin						53202-4125
(Address of principal executive offices)						(Zip Code)

Registrant’s telephone number, including area code: (414) 905-1000

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $1.00 par value	MCS	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to filing requirements for the past 90 days.

Yes

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act (Check One).


Large accelerated filer	o	Accelerated filer	x
Non-accelerated filer	o	Smaller reporting company	o
		Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

COMMON STOCK OUTSTANDING AT ~~JULY 31, 2023~~APRIL 30, 2024 – ~~24,611,944~~25,170,383

CLASS B COMMON STOCK OUTSTANDING AT ~~JULY 31, 2023 –7,078,410~~APRIL 30, 2024 –6,984,584

Table of Contents

THE MARCUS CORPORATION

INDEX

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

THE MARCUS CORPORATION

Consolidated Balance Sheets

(in thousands, except share and per share data)

June 29,
2023

December 29,
2022

March 28,
2024

December 28,
2023

ASSETS

Current assets:

Cash and cash equivalents

44,580

21,704

Restricted cash

4,274

2,802

Accounts receivable, net of reserves of $163 and $172, respectively

20,591

21,455

Accounts receivable, net of reserves of $199 and $115, respectively

Assets held for sale

558

460

Other current assets

21,579

17,474

Total current assets

91,582

63,895

Property and equipment:

Land and improvements

131,229

132,285

Buildings and improvements

730,955

729,177

Leasehold improvements

167,873

167,516

Furniture, fixtures and equipment

397,710

386,197

Finance lease right-of-use assets

29,998

29,885

Construction in progress

5,461

10,305

Total property and equipment

1,463,226

1,455,365

Less accumulated depreciation and amortization

764,048

739,600

Net property and equipment

699,178

715,765

Operating lease right-of-use assets

187,275

194,965

Operating lease right-of-use assets

Other assets:

Investments in joint ventures

1,865

2,067

Goodwill

74,996

75,015

Deferred incomes taxes

Other

13,054

12,891

Total other assets

89,915

89,973

TOTAL ASSETS

1,067,950

1,064,598

See accompanying condensed notes to consolidated financial statements.

Table of Contents

THE MARCUS CORPORATION

Consolidated Balance Sheets

(in thousands, except share and per share data)


		June 29, 2023		December 29, 2022
	March 28, 2024					March 28, 2024	December 28, 2023
LIABILITIES AND SHAREHOLDERS’ EQUITY	LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:	Current liabilities:
Current liabilities:
Current liabilities:
Accounts payable	Accounts payable	$	40,636	$	32,187
Income taxes		361		—
Accounts payable
Accounts payable

Taxes other than income taxes
Taxes other than income taxes
Taxes other than income taxes	Taxes other than income taxes	19,618		17,948
Accrued compensation	Accrued compensation	18,901		22,512
Other accrued liabilities	Other accrued liabilities	56,861		56,275
Current portion of finance lease obligations	Current portion of finance lease obligations	2,538		2,488
Current portion of operating lease obligations	Current portion of operating lease obligations	14,596		14,553
Current maturities of long-term debt	Current maturities of long-term debt	10,391		10,432
Total current liabilities	Total current liabilities	163,902		156,395

Finance lease obligations	Finance lease obligations	13,899		15,014
Finance lease obligations
Finance lease obligations

Operating lease obligations
Operating lease obligations
Operating lease obligations	Operating lease obligations	187,026		195,281

Long-term debt	Long-term debt	169,784		170,005
Long-term debt
Long-term debt

Deferred income taxes
Deferred income taxes
Deferred income taxes	Deferred income taxes	27,292		26,567

Other long-term obligations	Other long-term obligations	44,605		44,415
Other long-term obligations
Other long-term obligations

Equity:
Shareholders’ equity attributable to The Marcus Corporation
Shareholders’ Equity:
Shareholders’ Equity:
Shareholders’ Equity:
Preferred Stock, $1 par; authorized 1,000,000 shares; none issued	Preferred Stock, $1 par; authorized 1,000,000 shares; none issued	—		—
Common Stock, $1 par; authorized 50,000,000 shares; issued 24,691,548 shares at June 29, 2023 and 24,498,243 shares at December 29, 2022		24,692		24,498
Class B Common Stock, $1 par; authorized 33,000,000 shares; issued and outstanding 7,078,410 shares at June 29, 2023 and 7,110,875 shares at December 29, 2022		7,078		7,111
Preferred Stock, $1 par; authorized 1,000,000 shares; none issued
Preferred Stock, $1 par; authorized 1,000,000 shares; none issued
Common Stock, $1 par; authorized 50,000,000 shares; issued 25,237,374 shares at March 28, 2024 and 24,691,548 shares at December 28, 2023
Class B Common Stock, $1 par; authorized 33,000,000 shares; issued and outstanding 6,984,584 shares at March 28, 2024 and 7,078,410 shares at December 28, 2023
Capital in excess of par	Capital in excess of par	158,231		153,794
Retained earnings	Retained earnings	275,157		274,254
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(1,797)		(1,694)
		463,361		457,963
Less cost of Common Stock in treasury (90,888 shares at June 29, 2023 and 78,882 shares at December 29, 2022)		(1,919)		(1,866)
Total shareholders’ equity attributable to The Marcus Corporation		461,442		456,097
Noncontrolling interest		—		824
Total equity		461,442		456,921
	461,036
Less cost of Common Stock in treasury (67,052 shares at March 28, 2024 and 47,916 shares at December 28, 2023)
Total shareholders’ equity

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,067,950	$	1,064,598
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

See accompanying condensed notes to consolidated financial statements.

Table of Contents

THE MARCUS CORPORATION

Consolidated Statements of Earnings (Loss)

(in thousands, except per share data)


		13 Weeks Ended				26 Weeks Ended
		June 29, 2023		June 30, 2022		June 29, 2023		June 30, 2022
		13 Weeks Ended
		13 Weeks Ended
		13 Weeks Ended
		March 28, 2024
		March 28, 2024
		March 28, 2024
Revenues:
Revenues:
Revenues:	Revenues:
Theatre admissions	Theatre admissions	$	68,987	$	63,087	$	116,622	$	101,504
Theatre admissions
Theatre admissions
Rooms
Rooms
Rooms	Rooms	28,646		28,865		46,503		46,295
Theatre concessions	Theatre concessions	59,707		58,147		102,082		93,611
Theatre concessions
Theatre concessions
Food and beverage
Food and beverage
Food and beverage	Food and beverage	18,573		19,014		33,766		33,525
Other revenues	Other revenues	21,428		21,192		41,116		39,999
		197,341		190,305		340,089		314,934
Other revenues
Other revenues
		129,369
		129,369
		129,369
Cost reimbursements	Cost reimbursements	9,666		8,250		19,194		15,863
Cost reimbursements
Cost reimbursements
Total revenues
Total revenues
Total revenues	Total revenues	207,007		198,555		359,283		330,797

Costs and expenses:	Costs and expenses:

Costs and expenses:

Costs and expenses:
Theatre operations
Theatre operations
Theatre operations	Theatre operations	66,905		61,737		117,974		106,165
Rooms	Rooms	10,360		10,471		19,638		18,674
Rooms
Rooms
Theatre concessions
Theatre concessions
Theatre concessions	Theatre concessions	22,601		22,993		38,331		38,186
Food and beverage	Food and beverage	14,451		15,035		28,019		27,175
Food and beverage
Food and beverage
Advertising and marketing
Advertising and marketing
Advertising and marketing	Advertising and marketing	5,613		5,978		10,678		10,459
Administrative	Administrative	19,466		17,627		39,317		36,708
Administrative
Administrative
Depreciation and amortization
Depreciation and amortization
Depreciation and amortization	Depreciation and amortization	15,994		16,752		31,870		33,983
Rent	Rent	6,594		6,578		13,087		12,828
Rent
Rent
Property taxes
Property taxes
Property taxes	Property taxes	4,532		4,980		9,289		9,725
Other operating expenses	Other operating expenses	10,015		9,261		20,064		18,935
Other operating expenses
Other operating expenses
Loss on disposition of property, equipment and other assets
Loss on disposition of property, equipment and other assets
Loss on disposition of property, equipment and other assets

Reimbursed costs

Reimbursed costs

Reimbursed costs	Reimbursed costs	9,666		8,250		19,194		15,863
Total costs and expenses	Total costs and expenses	186,197		179,662		347,461		328,701
Total costs and expenses
Total costs and expenses

Operating income		20,810		18,893		11,822		2,096
Operating loss

Operating loss

Operating loss

Other income (expense):	Other income (expense):
Investment income (loss)		359		(459)		619		(727)

Other income (expense):

Other income (expense):
Investment income
Investment income
Investment income
Interest expense
Interest expense
Interest expense	Interest expense	(3,093)		(4,063)		(6,101)		(8,155)
Other income (expense)	Other income (expense)	(477)		(653)		(878)		(806)
Equity earnings (losses) from unconsolidated joint ventures		(31)		7		(202)		(134)
Other income (expense)
Other income (expense)
Equity losses from unconsolidated joint ventures
Equity losses from unconsolidated joint ventures
Equity losses from unconsolidated joint ventures
		(2,570)
		(2,570)
		(2,570)
		(3,242)		(5,168)		(6,562)		(9,822)
Loss before income taxes

Earnings (loss) before income taxes		17,568		13,725		5,260		(7,726)
Income tax expense (benefit)		4,102		4,765		1,260		(1,784)
Net earnings (loss)		$	13,466	$	8,960	$	4,000	$	(5,942)
Loss before income taxes

Loss before income taxes
Income tax benefit
Income tax benefit
Income tax benefit
Net loss
Net loss
Net loss

Net loss per share - basic:

Net earnings (loss) per share - basic:
Net loss per share - basic:

Net loss per share - basic:
Common Stock
Common Stock
Common Stock	Common Stock	$	0.43	$	0.29	$	0.13	$	(0.19)
Class B Common Stock	Class B Common Stock	$	0.39	$	0.26	$	0.12	$	(0.18)
Class B Common Stock
Class B Common Stock

Net earnings (loss) per share - diluted:
Net loss per share - diluted:

Net loss per share - diluted:

Net loss per share - diluted:
Common Stock
Common Stock
Common Stock	Common Stock	$	0.35	$	0.24	$	0.13	$	(0.19)
Class B Common Stock	Class B Common Stock	$	0.34	$	0.23	$	0.12	$	(0.18)
Class B Common Stock
Class B Common Stock

See accompanying condensed notes to consolidated financial statements.

Table of Contents

THE MARCUS CORPORATION

Consolidated Statements of Comprehensive Income (Loss)

(in thousands)

13 Weeks Ended 26 Weeks Ended
June 29,
2023 June 30,
2022 June 29,
2023 June 30,
2022
Net earnings (loss) $ 13,466 $ 8,960 $ 4,000 $ (5,942)
Other comprehensive income (loss), net of tax:
Amortization of the net actuarial loss and prior service credit related to the pension, net of tax effect (benefit) of $(4), $67, $(9) and $134, respectively (12) 190 (23) 380
Fair market value adjustment of interest rate swap, net of tax effect (benefit) of $0, $37, $(8) and $116, respectively — 106 (22) 329
Reclassification adjustment on interest rate swap included in interest expense, net of tax effect (benefit) of $0, $31, $(20) and $72, respectively — 88 (58) 206
Other comprehensive income (loss) (12) 384 (103) 915
Comprehensive income (loss) $ 13,454 $ 9,344 $ 3,897 $ (5,027)


	13 Weeks Ended
	March 28, 2024		March 30, 2023

Net loss	$	(11,866)	$	(9,466)
Other comprehensive loss, net of tax:
Amortization of the net actuarial loss and prior service credit related to the pension, net of tax benefit of $4 and $5, respectively	(12)		(11)
Fair market value adjustment of interest rate swap, net of tax benefit of $0 and $8, respectively	—		(22)
Reclassification adjustment on interest rate swap included in interest expense, net of tax benefit of $0 and $20, respectively	—		(58)
Other comprehensive loss	(12)		(91)
Comprehensive loss	$	(11,878)	$	(9,557)

See accompanying condensed notes to consolidated financial statements.

Table of Contents

THE MARCUS CORPORATION

Consolidated Statements of Cash Flows

(in thousands)

26 Weeks Ended

June 29, 2023

June 30, 2022

13 Weeks Ended

March 28, 2024

March 30, 2023

OPERATING ACTIVITIES:

Net income (loss)

4,000

(5,942)

Adjustments to reconcile net loss to net cash provided by operating activities:

OPERATING ACTIVITIES:

Net loss

Adjustments to reconcile net loss to net cash used in operating activities:

Losses on investments in joint ventures

202

134

(Gain) loss on disposition of property, equipment and other assets

777

(355)

Losses on investments in joint ventures

Loss on disposition of property, equipment and other assets

Depreciation and amortization

31,870

33,983

Amortization of debt issuance costs

742

826

Share-based compensation

3,687

4,572

Deferred income taxes

780

(1,505)

Other long-term obligations

176

(49)

Contribution of the Company’s stock to savings and profit-sharing plan

1,259

956

Changes in operating assets and liabilities:

Accounts receivable

895

2,629

Government grants receivable

—

4,335

Accounts receivable

Other assets

(1,796)

(4,294)

Operating leases

(522)

(1,047)

Accounts payable

6,341

551

Income taxes

22,720

Taxes other than income taxes

1,670

(347)

Accrued compensation

(3,634)

(1,595)

Other accrued liabilities

785

(344)

Total adjustments

43,326

61,170

Net cash provided by operating activities

47,326

55,228

Net cash used in operating activities

INVESTING ACTIVITIES:

Capital expenditures

(15,896)

(16,341)

Proceeds from disposals of property, equipment and other assets

4,821

Capital contribution in joint venture

Subscription and sale of joint venture interests

Proceeds from sale of trading securities

—

Purchase of trading securities

(514)

—

Other investing activities

(295)

Net cash used in investing activities

(16,642)

(11,475)

FINANCING ACTIVITIES:

Debt transactions:

Proceeds from borrowings on revolving credit facility

38,000

22,000

Repayment of borrowings on revolving credit facility

(38,000)

(22,000)

Repayments on short-term borrowings

—

(820)

Principal payments on long-term debt

(763)

(851)

Principal payments on long-term debt

Debt issuance costs

(50)

—

Principal payments on finance lease obligations

(1,201)

(1,336)

Equity transactions:

Treasury stock transactions, except for stock options

(494)

(1,461)

Treasury stock transactions, except for stock options

Exercise of stock options

Dividends paid

(3,097)

—

Distributions to noncontrolling interest

(824)

—

Net cash used in financing activities

(6,336)

(4,389)

Net increase in cash, cash equivalents and restricted cash

24,348

39,364

Net cash provided by (used in) financing activities

Net decrease in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

24,506

24,054

Cash, cash equivalents and restricted cash at end of period

48,854

63,418

Supplemental Information:

Interest paid, net of amounts capitalized

4,622

7,054

Income taxes refunded (paid), including interest earned

(386)

22,998

Interest paid, net of amounts capitalized

Income taxes paid, including interest earned

Change in accounts payable for additions to property, equipment and other assets

2,096

2,003

See accompanying condensed notes to consolidated financial statements.

Table of Contents

THE MARCUS CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE 13 ~~AND 26~~ WEEKS ENDED ~~JUNE 29, 2023~~MARCH 28, 2024

(in thousands, except share and per share data)

1. General

Basis of Presentation - The unaudited consolidated financial statements for the 13 ~~and 26~~ weeks ended ~~June 29,~~March 28, 2024 and March 30, 2023 ~~and June 30, 2022~~ have been prepared by the Company. In the opinion of management, all adjustments, consisting of normal recurring adjustments necessary to present fairly the unaudited interim financial information at ~~June 29, 2023,~~March 28, 2024, and for all periods presented, have been made. The results of operations during the interim periods are not necessarily indicative of the results of operations for the entire year or other interim periods. However, the unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December ~~29, 2022.~~28, 2023.

Accounting Policies - Refer to the Company’s audited consolidated financial statements (including footnotes) for the fiscal year ended December ~~29, 2022,~~28, 2023, contained in the Company’s Annual Report on Form 10-K for such year, for a description of the Company’s accounting policies.

~~Noncontrolling Interest~~ - The Company has an ownership interest greater than 50% in one joint venture that is considered a Variable Interest Entity (VIE) that is included in the accounts of the Company. The Company is the primary beneficiary of the VIE and the Company’s interest is considered a majority voting interest. The primary asset of this VIE, The Skirvin Hilton, was sold on December 16, 2022. The equity interest of outside owners in consolidated entities is recorded as noncontrolling interest in the consolidated balance sheets.

Depreciation and Amortization - Depreciation and amortization of property and equipment are provided using the straight-line method over the shorter of the estimated useful lives of the assets or any related lease terms. Depreciation expense totaled ~~$15,986~~$16,014 and ~~$31,854~~$15,868 for the 13 ~~and 26~~ weeks ended ~~June 29,~~March 28, 2024, and March 30, 2023, ~~respectively, and $16,744 and $33,967 for the 13 and 26 weeks ended June 30, 2022,~~ respectively.

Assets Held for Sale – Long-lived assets that are expected to be sold within the next 12 months and meet the other relevant held-for-sale criteria are classified as assets held for sale and included within current assets on the consolidated balance sheet. Assets held for sale are measured at the lower of their carrying value or their fair value less costs to sell the asset. As of ~~June 29, 2023,~~March 28, 2024, assets held for sale ~~consists~~consisted of ~~excess land.~~one closed theatre that was sold subsequent to March 28, 2024.

Long-Lived Assets – The Company periodically considers whether indicators of impairment of long-lived assets held for use are present. This includes quantitative and qualitative factors, including evaluating the historical actual operating performance of the long-lived assets and assessing the potential impact of recent events and transactions impacting the long-lived assets. If such indicators are present, the Company determines if the long-lived assets are recoverable by assessing whether the sum of the estimated undiscounted future cash flows attributable to such assets is less than their carrying amounts. If the long-lived assets are not recoverable, the Company recognizes any impairment losses based on the excess of the carrying amount of the assets over their fair value. ~~There were no indicators of impairment identified during the 26 weeks ended June 29, 2023 or June 30, 2022.~~

Goodwill – The Company reviews goodwill for impairment annually or more frequently if certain indicators arise. The Company performs its annual impairment test on the first day of the fiscal fourth quarter. There were no indicators of impairment identified during the 2613 weeks ended ~~June 29, 2023~~March 28, 2024 or ~~June~~March 30, ~~2022.~~2023.

Earnings (Loss) Per Share - Net earnings (loss) per share (EPS) of Common Stock and Class B Common Stock is computed using the two class method. Basic net earnings (loss) per share is computed by dividing net earnings (loss) by the weighted-average number of common shares outstanding. Diluted net earnings (loss) per share is computed by dividing net earnings (loss) by the weighted-average number of common shares outstanding, adjusted for the effect of dilutive stock options, restricted stock units, performance stock units and convertible debt instruments using the if-converted method. Convertible Class B Common Stock and convertible debt instruments are reflected on an if-converted basis when dilutive to Common Stock. The computation of the diluted net earnings (loss) per share of Common Stock assumes the conversion of Class B Common Stock in periods that have net earnings since it would be dilutive to Common Stock earnings per share, while the diluted net earnings (loss) per share of Class B Common Stock does not assume the conversion of those shares.

Holders of Common Stock are entitled to cash dividends per share equal to 110% of all dividends declared and paid on each share of Class B Common Stock. As such, the undistributed earnings (losses) for each period are allocated based on the proportionate share of entitled cash dividends.

The following table illustrates the computation of Common Stock basic and diluted net ~~earnings (loss)~~loss per share, ~~and~~ provides a reconciliation of the number of weighted-average basic and diluted shares outstanding, when applicable, and provides the weighted-average number of anti-dilutive shares excluded from the computation of diluted weighted-average shares outstanding:

13 Weeks Ended 26 Weeks Ended
June 29, 2023 June 30, 2022 June 29, 2023 June 30, 2022
Numerator:
Net earnings (loss) $ 13,466 $ 8,960 $ 4,000 $ (5,942)
Denominator (in thousands):
Denominator for basic EPS 31,673 31,492 31,622 31,469
Effect of dilutive employee stock options 61 40 52 —
Effect of convertible notes 9,201 9,085 — —
Denominator for diluted EPS 40,935 40,617 31,674 31,469
Net earnings (loss) per share - basic:
Common Stock $ 0.43 $ 0.29 $ 0.13 $ (0.19)
Class B Common Stock $ 0.39 $ 0.26 $ 0.12 $ (0.18)
Net earnings (loss) per share - diluted:
Common Stock $ 0.35 $ 0.24 $ 0.13 $ (0.19)
Class B Common Stock $ 0.34 $ 0.23 $ 0.12 $ (0.18)


	13 Weeks Ended
	March 28, 2024		March 30, 2023

Net loss per share - basic:
Common Stock	$	(0.38)	$	(0.31)
Class B Common Stock	$	(0.34)	$	(0.28)
Net loss per share - diluted:
Common Stock	$	(0.38)	$	(0.31)
Class B Common Stock	$	(0.34)	$	(0.28)

Numerator:
Net loss	$	(11,866)	$	(9,466)

Denominator (in thousands):




Basic and diluted weighted-average shares outstanding	31,892		31,572

Weighted-average number of anti-dilutive shares excluded from denominator:
Employee stock options	2,973,626		3,081,729
Restricted stock units	49,505		—
Performance stock units	143,305		—
Convertible senior notes	9,331,461		9,170,800
Total	12,497,897		12,252,529

For the periods when the Company reports a net loss, common stock equivalents, restricted stock units, performance stock units, and shares related to the convertible senior notes are excluded from the computation of diluted loss per share as their inclusion would have an ~~antidilutive~~anti-dilutive effect. ~~During~~Performance stock units are considered anti-dilutive if the ~~26 weeks ended June 30, 2022, approximately 61,791 common stock equivalents were~~performance targets upon which the issuance of the shares are contingent have not been achieved and the respective performance period has not been completed as of the end of the current period. Shares related to the convertible senior notes are excluded from the computation of diluted ~~loss~~earnings per share due to the Company’s net loss. During the 26 weeks ended June 29, 2023, and June 30, 2022, respectively, 9,200,907 and 9,084,924 shares related to the convertible notes were excluded from the computation of diluted loss per share asin periods when the effect would have been ~~anti-dilutive.~~anti-dilutive using the if-converted method.

Shareholders’ Equity - Activity impacting total shareholders’ equity attributable to The Marcus Corporation and noncontrolling interest for the 13 ~~and 26~~ weeks ended ~~June 29,~~March 28, 2024 and March 30, 2023 ~~and June 30, 2022~~ was as follows:

Common
Stock Class B
Common
Stock Capital
in Excess
of Par Retained
Earnings Accumulated
Other
Comprehensive
Income (Loss) Treasury
Stock Shareholders’
Equity
Attributable
to The
Marcus
Corporation Non-
controlling
Interest Total
Equity
BALANCES AT DECEMBER 29, 2022 $ 24,498 $ 7,111 $ 153,794 $ 274,254 $ (1,694) $ (1,866) $ 456,097 $ 824 $ 456,921
Cash dividends:
$0.045 per share Class B Common Stock — — — (319) — — (319) — (319)
$0.05 per share Common Stock — — — (1,229) — — (1,229) — (1,229)
Exercise of stock options — — (1) — — 3 2 — 2
Purchase of treasury stock — — — — — (313) (313) — (313)
Savings and profit-sharing contribution 79 — 1,180 — — — 1,259 — 1,259
Reissuance of treasury stock — — (3) — — 24 21 — 21
Issuance of non-vested stock 82 — (143) — — 61 — — —
Shared-based compensation — — 2,172 — — — 2,172 — 2,172
Other — — 1 (1) — — — — —
Conversions of Class B Common Stock 33 (33) — — — — — — —
Distribution to noncontrolling interest — — — — — — — (550) (550)
Comprehensive loss — — — (9,466) (91) — (9,557) — (9,557)
BALANCES AT MARCH 30, 2023 $ 24,692 $ 7,078 $ 157,000 $ 263,239 $ (1,785) $ (2,091) $ 448,133 $ 274 $ 448,407
Cash dividends:
$0.045 per share Class B Common Stock — — — (319) — — (319) — (319)
$0.05 per share Common Stock — — — (1,230) — — (1,230) — (1,230)
Exercise of stock options — — (25) — — 121 96 — 96
Purchase of treasury stock — — — — — (226) (226) — (226)
Reissuance of treasury stock — — (204) — — 223 19 — 19
Issuance of non-vested stock — — (55) — — 55 — — —
Shared-based compensation — — 1,515 — — — 1,515 — 1,515
Other — — — 1 — (1) — — —
Distribution to noncontrolling interest — — — — — — — (274) (274)
Comprehensive income (loss) — — — 13,466 (12) — 13,454 — 13,454
BALANCES AT JUNE 29, 2023 $ 24,692 $ 7,078 $ 158,231 $ 275,157 $ (1,797) $ (1,919) $ 461,442 $ — $ 461,442


	Common Stock		Class B Common Stock		Capital in Excess of Par		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total Shareholders’ Equity
BALANCES AT DECEMBER 28, 2023	$	24,692	$	7,078	$	160,642	$	281,599	$	(1,336)	$	(1,503)	$	471,172
Cash dividends:
$0.064 per share Class B Common Stock	—		—		—		(449)		—		—		(449)
$0.07 per share Common Stock	—		—		—		(1,760)		—		—		(1,760)

Purchase of treasury stock	—		—		—		—		—		(301)		(301)
Reissuance of treasury stock	—		—		(3)		—		—		23		20
Issuance of non-vested stock	452		—		(515)		—		—		63		—
Shared-based compensation	—		—		2,514		—		—		—		2,514

Conversions of Class B Common Stock	93		(93)		—		—		—		—		—
Comprehensive loss	—		—		—		(11,866)		(12)		—		(11,878)
BALANCES AT MARCH 28, 2024	$	25,237	$	6,985	$	162,638	$	267,524	$	(1,348)	$	(1,718)	$	459,318


		Common Stock		Class B Common Stock		Capital in Excess of Par		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Shareholders’ Equity Attributable to The Marcus Corporation		Non- controlling Interest		Total Equity
BALANCES AT DECEMBER 30, 2021		$	24,345	$	7,130	$	145,656	$	289,306	$	(11,444)	$	(1,379)	$	453,614	$	—	$	453,614
	Common Stock																			Common Stock	Class B Common Stock	Capital in Excess of Par	Retained Earnings	Accumulated Other Comprehensive Loss	Treasury Stock	Shareholders’ Equity Attributable to The Marcus Corporation	Non- controlling Interest	Total Equity
BALANCES AT DECEMBER 29, 2022
Cash dividends:
$0.045 per share Class B Common Stock
$0.045 per share Class B Common Stock
$0.045 per share Class B Common Stock
$0.05 per share Common Stock
Exercise of stock options	Exercise of stock options	—		—		(5)		—		—		31		26		—		26
Purchase of treasury stock	Purchase of treasury stock	—		—		—		—		—		(1,373)		(1,373)		—		(1,373)
Savings and profit-sharing contribution	Savings and profit-sharing contribution	56		—		900		—		—		—		956		—		956
Reissuance of treasury stock	Reissuance of treasury stock	—		—		1		—		—		8		9		—		9
Issuance of non-vested stock	Issuance of non-vested stock	78		—		(236)		—		—		158		—		—		—
Shared-based compensation	Shared-based compensation	—		—		2,917		—		—		—		2,917		—		2,917
Other	Other	—		—		1		(1)		—		—		—		—		—
Conversions of Class B Common Stock	Conversions of Class B Common Stock	19		(19)		—		—		—		—		—		—		—
Comprehensive income (loss)		—		—		—		(14,902)		531		—		(14,371)		—		(14,371)
BALANCES AT MARCH 31, 2022		$	24,498	$	7,111	$	149,234	$	274,403	$	(10,913)	$	(2,555)	$	441,778	$	—	$	441,778
Exercise of stock options		—		—		(16)		—		—		69		53		—		53
Purchase of treasury stock		—		—		—		—		—		(104)		(104)		—		(104)
Reissuance of treasury stock		—		—		(2)		—		—		9		7		—		7
Issuance of non-vested stock		—		—		(305)		—		—		305		—		—		—
Shared-based compensation		—		—		1,655		—		—		—		1,655		—		1,655

Comprehensive income		—		—		—		8,960		384		—		9,344		—		9,344
BALANCES AT JUNE 30, 2022		$	24,498	$	7,111	$	150,565	$	283,364	$	(10,529)	$	(2,276)	$	452,733	$	—	$	452,733
Distribution to noncontrolling interest
Comprehensive loss
BALANCES AT MARCH 30, 2023

Accumulated Other Comprehensive Loss – Accumulated other comprehensive loss presented in the accompanying consolidated balance sheets consists of the following, all presented net of tax:


	March 28, 2024					March 28, 2024	December 28, 2023
		June 29, 2023		December 29, 2022

Unrecognized gain on interest rate swap agreements		$	—	$	80
Net unrecognized actuarial loss for pension obligation	Net unrecognized actuarial loss for pension obligation	(1,797)		$	(1,774)
		$	(1,797)	$	(1,694)
Net unrecognized actuarial loss for pension obligation
Net unrecognized actuarial loss for pension obligation
	$

Fair Value Measurements - Certain financial assets and liabilities are recorded at fair value in the consolidated financial statements. Some are measured on a recurring basis while others are measured on a non-recurring basis. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. A fair value measurement assumes that a transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability.

The Company’s assets and liabilities measured at fair value are classified in one of the following categories:

Level 1 - Assets or liabilities for which fair value is based on quoted prices in active markets for identical instruments as of the reporting date. At ~~June 29, 2023~~March 28, 2024 and December ~~29, 2022, respectively,~~28, 2023, the Company’s ~~$4,894~~$6,821 and ~~$3,932~~$5,364 respectively, of debt and equity securities classified as trading were valued using Level 1 pricing inputs and were included in other current assets. At ~~June 29,~~December 28, 2023, ~~and December 29, 2022, respectively,~~ the Company’s ~~$34,999 and $6,000~~$37,018 of investments in money market funds were valued using Level 1 pricing inputs and were included in cash and cash equivalents.

Level 2 - Assets or liabilities for which fair value is based on pricing inputs that were either directly or indirectly observable as of the reporting date. At each of March 28, 2024 and December ~~29, 2022,~~28, 2023, none of the Company’s ~~$108 asset related to the Company’s interest rate swap contract was valued~~recorded assets or liabilities were measured using Level 2 pricing inputs. ~~This contracted terminated on March 1, 2023.~~

Level 3 - Assets or liabilities for which fair value is based on valuation models with significant unobservable pricing inputs and which result in the use of management estimates. At ~~June 29, 2023~~each of March 28, 2024 and December ~~29, 2022,~~28, 2023, none of the Company’s recorded assets or liabilities that are measured on a recurring basis at fair market value were valued using Level 3 pricing inputs.

The carrying value of the Company’s financial instruments (including cash and cash equivalents, restricted cash, accounts receivable and accounts payable) approximates fair value. The fair value of the Company’s ~~$80,000~~$70,000 of senior notes, valued using Level 2 pricing inputs, is approximately ~~$72,187~~$66,833 at ~~June 29, 2023,~~March 28, 2024, determined based upon discounted cash flows using current market interest rates for financial instruments with a similar average remaining life. The fair value of the Company's $100,050 of convertible senior notes, valued using Level 2 pricing inputs, is approximately ~~$150,020~~$144,371 at ~~June 29, 2023,~~March 28, 2024, determined based on market rates and the closing trading price of the convertible senior notes as of ~~June 29, 2023.~~March 28, 2024. The carrying amounts of the Company’s remaining long-term debt approximate their fair values, determined using current rates for similar instruments, or Level 2 pricing inputs.

Defined Benefit Plan - The components of the net periodic pension cost of the Company’s unfunded nonqualified, defined-benefit plan are as follows:


		13 Weeks Ended
		13 Weeks Ended
		13 Weeks Ended
		March 28, 2024
		March 28, 2024
		March 28, 2024
		13 Weeks Ended				26 Weeks Ended
Service cost
		June 29, 2023		June 30, 2022		June 29, 2023		June 30, 2022
Service cost

Service cost	Service cost	$	122	$	264	$	244	$	528
Interest cost	Interest cost	452		335		905		670
Interest cost
Interest cost
Net amortization of prior service cost and actuarial loss
Net amortization of prior service cost and actuarial loss
Net amortization of prior service cost and actuarial loss	Net amortization of prior service cost and actuarial loss	(16)		257		(32)		514
Net periodic pension cost	Net periodic pension cost	$	558	$	856	$	1,117	$	1,712
Net periodic pension cost
Net periodic pension cost

Service cost is included in Administrative expense while all other components are recorded within Other expense outside of operating income in the consolidated statements of earnings.

Revenue Recognition – The disaggregation of revenues by business segment for the 13 ~~and 26~~ weeks ended ~~June 29, 2023~~March 28, 2024 is as follows:

13 Weeks Ended June 29, 2023
Theatres Hotels/Resorts Corporate Total
Theatre admissions $ 68,987 $ — $ — $ 68,987
Rooms — 28,646 — 28,646
Theatre concessions 59,707 — — 59,707
Food and beverage — 18,573 — 18,573
Other revenues(1)
8,156 13,181 91 21,428
Cost reimbursements — 9,666 — 9,666
Total revenues $ 136,850 $ 70,066 $ 91 $ 207,007


		26 Weeks Ended June 29, 2023
		Theatres		Hotels/Resorts		Corporate		Total
	13 Weeks Ended March 28, 2024												13 Weeks Ended March 28, 2024
	Theatres									Theatres	Hotels/Resorts	Corporate		Total
Theatre admissions	Theatre admissions	$	116,622	$	—	$	—	$	116,622
Rooms	Rooms	—		46,503		—		$	46,503
Theatre concessions	Theatre concessions	102,082		—		—		$	102,082
Food and beverage	Food and beverage	—		33,766		—		$	33,766
Other revenues(1)	Other revenues(1)	14,522		26,414		180		$	41,116
Cost reimbursements	Cost reimbursements	—		19,194		—		$	19,194
Total revenues	Total revenues	$	233,226	$	125,877	$	180	$	359,283

(1)Included in other revenues is an immaterial amount related to rental income that is not considered revenue from contracts with customers.

The disaggregation of revenues by business segment for the 13 ~~and 26~~ weeks ended ~~June~~March 30, ~~2022~~2023 is as follows:

13 Weeks Ended June 30, 2022
Theatres Hotels/Resorts Corporate Total
Theatre admissions $ 63,087 $ — $ — $ 63,087
Rooms — 28,865 — 28,865
Theatre concessions 58,147 — — 58,147
Food and beverage — 19,014 — 19,014
Other revenues(1)
8,203 12,872 117 21,192
Cost reimbursements — 8,250 — 8,250
Total revenues $ 129,437 $ 69,001 $ 117 $ 198,555


		26 Weeks Ended June 30, 2022
		Theatres		Hotels/Resorts		Corporate		Total
	13 Weeks Ended March 30, 2023											13 Weeks Ended March 30, 2023
	Theatres									Theatres	Hotels/Resorts	Corporate	Total
Theatre admissions	Theatre admissions	$	101,504	$	—	$	—	$	101,504
Rooms	Rooms	—		46,295		—		46,295
Theatre concessions	Theatre concessions	93,611		—		—		93,611
Food and beverage	Food and beverage	—		33,525		—		33,525
Other revenues(1)	Other revenues(1)	13,813		25,975		211		39,999
Cost reimbursements	Cost reimbursements	—		15,863		—		15,863
Total revenues	Total revenues	$	208,928	$	121,658	$	211	$	330,797

(1)Included in other revenues is an immaterial amount related to rental income that is not considered revenue from contracts with customers.

The Company had deferred revenue from contracts with customers of ~~$37,670~~$36,320 and ~~$37,046~~$38,034 as of ~~June 29, 2023~~March 28, 2024 and December ~~29, 2022,~~28, 2023, respectively. The Company had no contract assets as of ~~June 29, 2023~~March 28, 2024 and December ~~29, 2022.~~28, 2023. During the 2613 weeks ended ~~June 29,~~March 28, 2024, the Company recognized revenue of $7,548 that was included in deferred revenues as of December 28, 2023. During the 13 weeks ended March 30, 2023, the Company recognized revenue of ~~$10,875~~$6,276 that was included in deferred revenues as of December 29, 2022. ~~During the 26 weeks ended June 30, 2022, the Company recognized revenue of $9,448 that was included in deferred revenues as of December 30, 2021.~~ The majority of the Company’s deferred revenue relates to non-redeemed gift cards, advanced ticket sales and the Company’s loyalty program.

As of ~~June 29, 2023,~~March 28, 2024, the amount of transaction price allocated to the remaining performance obligations under the Company’s advanced ticket sales was ~~$1,980~~$2,031 and is reflected in the Company’s consolidated balance sheet as part of deferred revenues, which is included in other accrued liabilities. As of ~~June 29, 2023,~~March 28, 2024, the amount of transaction price allocated to the remaining performance obligations related to the amount of Theatres non-redeemed gift cards was ~~$16,318~~$16,055 and is reflected in the Company’s consolidated balance sheet as part of deferred revenues. The Company recognizes revenue as the tickets and gift cards are redeemed, which is expected to occur within the next two years.

As of ~~June 29, 2023,~~March 28, 2024, the amount of transaction price allocated to the remaining performance obligations related to the amount of Hotels and Resorts non-redeemed gift cards was ~~$3,834~~$4,282 and is reflected in the Company’s consolidated balance sheet as part of deferred revenues. The Company recognizes revenue as the gift cards are redeemed, which is expected to occur within the next two years.

The majority of the Company’s revenue is recognized in less than one year from the original contract.

New Accounting Pronouncements - In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280: Improvements to Reportable Segment Disclosures (ASU No. 2023-07), which requires disclosure of incremental segment information on an annual and interim basis. ASU No 2023-07 will be effective for the Company’s fiscal year ending December 26, 2024, and the Company’s interim periods beginning in fiscal 2025. The Company is evaluating the effect that the guidance will have on its consolidated financial statement disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740: Improvements to Income Tax Disclosures (ASU No. 2023-09), which requires improvements to income tax disclosures primarily related to rate reconciliation and income taxes paid information. ASU No. 2023-09 will be effective for the Company in fiscal 2025 and must be applied prospectively with retrospective application permitted. The Company is evaluating the impact that ASU No. 2023-09 will have on its consolidated financial statement disclosures.

2. Long-Term Debt

Long-term debt is summarized as follows:


	March 28, 2024					March 28, 2024	December 28, 2023

		June 29, 2023		December 29, 2022
Senior notes

Senior notes

Senior notes	Senior notes	$	80,000	$	80,000
Unsecured term note due February 2025, with monthly principal and interest payments of $39, bearing interest at 5.75%	Unsecured term note due February 2025, with monthly principal and interest payments of $39, bearing interest at 5.75%	744		954
Convertible senior notes	Convertible senior notes	100,050		100,050
Payroll Protection Program loans	Payroll Protection Program loans	1,687		2,240
Revolving credit agreement	Revolving credit agreement	—		—
Debt issuance costs	Debt issuance costs	(2,306)		(2,807)
Total debt, net of debt issuance costs	Total debt, net of debt issuance costs	180,175		180,437
Less current maturities, net of issuance costs	Less current maturities, net of issuance costs	10,391		10,432
Long-term debt	Long-term debt	$	169,784	$	170,005

Credit Agreement

~~On January 9, 2020,~~As of March 28, 2024, the Company replaced its then-existing credit agreement with several banks. On April 29, 2020, the Company entered into the First Amendment, on September 15, 2020, the Company entered into the Second Amendment, on July 13, 2021, the Company entered into the Third Amendment, on July 29, 2022, the Company entered into the Fourth Amendment and on February 10, 2023, the Company entered into the Fifth Amendment (thehas a five year Credit Agreement ~~as amended by the First Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment and the Fifth Amendment, hereinafter referred to as the “Credit Agreement”).~~

~~The Credit Agreement~~that provides for a revolving credit facility that matures on ~~January 9, 2025~~October 16, 2028 with an initial maximum aggregate amount of availability of $225,000. At ~~June 29, 2023,~~March 28, 2024, there were no borrowings ~~of $0~~ outstanding on the revolving credit facility, which when borrowed, bear interest at the secured overnight financing rate ~~(“SOFR”)~~(SOFR) plus a margin (as discussed further below), effectively ~~6.22%~~9.05% at ~~June 29, 2023.~~March 28, 2024. Availability under the ~~line at June 29, 2023,~~$225,000 revolving credit facility was ~~$220,623,~~$220,185 as of March 28, 2024 after taking into consideration outstanding letters of credit that reduce revolver availability.

~~Effective with the Fifth Amendment on February 10, 2023, the variable rate LIBOR benchmark in the Credit Agreement was replaced with SOFR.~~ Borrowings under the Credit Agreement ~~now generally~~ bear interest at a variable rate equal ~~to:~~to (i) the term SOFR, plus a credit spread adjustment of 0.10%, subject to a 0% floor, plus a specified margin based upon ~~our consolidated debt to capitalization~~the Company’s net leverage ratio as of the most recent determination ~~date;~~date, or (ii) the alternate base rate (“ABR”) (which is the highest of (a) the prime rate, (b) the greater of the federal funds rate and the overnight bank funding rate plus 0.50% or (c) the sum of 1% plus one-month SOFR plus a credit spread adjustment of 0.10%), subject to a 1% floor, plus a specified margin based upon the Company’s net leverage ratio as of the most recent determination date. The revolving credit facility also requires an annual facility fee equal to 0.175% to 0.275% of the total revolving commitments depending on the Company’s consolidated net leverage ratio.

Table of Contents

THE MARCUS CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE 13 ~~AND 26~~ WEEKS ENDED ~~JUNE 29, 2023~~MARCH 28, 2024

(in thousands, except share and per share data)

plus one-month SOFR plus a credit spread adjustment of 0.10%), subject to a 1% floor, plus a specified margin based upon our consolidated debt to capitalization ratio as of the most recent determination date. In addition, the Credit Agreement generally requires the Company to pay a facility fee equal to 0.125% to 0.25% of the total revolving commitment, depending on our consolidated debt to capitalization ratio, as defined in the Credit Agreement.

The Credit Agreement ~~contains various~~includes, among other restrictions and ~~covenants. Among other requirements,~~covenants applicable to the ~~Credit Agreement (a) limits the amount of priority debt (as defined in the Credit Agreement) held by the Company’s restricted subsidiaries to no more than 20% of~~Company, a requirement that the Company’s consolidated ~~total capitalization (as defined~~net leverage ratio not exceed 3.50:1.00, provided that, with some limitations, such ratio may be increased to 4.00:1:00 for the full fiscal quarter in which a material acquisition (in which aggregate consideration equals or exceeds $30,000) is consummated and the ~~Credit Agreement), (b) limits~~three fiscal quarters immediately thereafter, and a requirement that the Company’s ~~permissible consolidated debt to capitalization ratio to a maximum of 0.55 to 1.0, (c) requires the Company to maintain a consolidated fixed charge~~interest coverage ratio of at ~~least 2.5 to 1.0 as of~~ the end of ~~the~~any fiscal quarter ending March 30, 2023 and each fiscal quarter thereafter, and (d) restricts the Company’s ability to incur additional indebtedness and make voluntary prepayments on or defeasance of the Company’s 4.02% Senior Notes due August 2025, 4.32% Senior Notes due February 2027, the notes or certain other convertible securities. Beginning with the first quarter of fiscal 2023, the Company has returned to compliance with prior financial covenants under the Credit Agreement that were temporarily waived (specifically, the consolidated fixed charge coverage ratio), removing any limitations on the total amount of quarterly dividends or share repurchases. During fiscal 2022 the Credit Agreement limited the total amount of quarterly dividend payments or share repurchases to no morenot be less than ~~$1,550 per quarter.~~3.00:1.00.

In connection with the Credit Agreement: (i) the Company has pledged, subject to certain exceptions, security interests and liens in and on (a) substantially all of its respective personal property assets and (b) certain of its respective real property assets, in each case, to secure the Credit Agreement and related obligations; and (ii) certain of the Company’s subsidiaries have guaranteed the Company’s obligations under the Credit Agreement. ~~The foregoing security interests, liens and guaranties will remain in effect until the Collateral Release Date (as defined in the Credit Agreement).~~

The Credit Agreement contains customary events of default. If an event of default under the Credit Agreement occurs and is continuing, then, among other things, the lenders may declare any outstanding obligations under the Credit Agreement to be immediately due and payable and exercise rights and remedies against the pledged collateral.

Note Purchase Agreements

At ~~June 29, 2023~~March 28, 2024 and December ~~29, 2022,~~28, 2023, the Company’s ~~$80,000~~$70,000 of senior notes consist of two Note Purchase Agreements maturing in 2025 through 2027, require annual principal payments in varying installments and bear interest payable semi-annually at fixed rates ranging from 4.02% to 4.32%.

Convertible Senior Notes

On September 17, 2020, the Company entered into a purchase agreement to issue and sell $100,050 aggregate principal amount of its 5.00% Convertible Senior Notes due 2025 (the “Convertible Notes.”) The Convertible Notes were issued pursuant to an indenture (the “Indenture”), dated September 22, 2020, between the Company and U.S. Bank National Association, as trustee.

The Convertible Notes bear interest from September 22, 2020 at a rate of 5.00% per year. Interest will be payable semiannually in arrears on March 15 and September 15 of each year, beginning on March 15, 2021. The Convertible Notes may bear additional interest under specified circumstances relating to the Company’s failure to comply with its reporting obligations under the Indenture or if the Convertible Notes are not freely tradeable as required by the Indenture. The Convertible Notes will mature on September 15, 2025, unless earlier repurchased or converted. Prior to March 15, 2025, the Convertible Notes will be convertible at the option of the holders only under the following circumstances: (i) during any fiscal quarter commencing after the fiscal quarter ending on December 31, 2020 (and only during such fiscal quarter), if the last reported sale price of the Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (ii) during the five business day period immediately after any five consecutive trading day period, or the measurement period, in which the trading price per $1,000 principal amount of the Convertible Notes for each trading day of the measurement period was less than 98% of the

~~Table of Contents~~

~~THE MARCUS CORPORATION~~

~~CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~FOR THE 13 AND 26 WEEKS ENDED JUNE 29, 2023~~

~~(in thousands, except share and per share data)~~

product of the last reported sale price of the Common Stock and the conversion rate on each such trading day; or (iii) upon the occurrence of specified corporate events. On or after March 15, 2025, the Convertible Notes will be convertible at the option of the holders at any time until the close of business on the second scheduled trading day immediately preceding the maturity date.

Upon conversion, the Convertible Notes may be settled, at the Company’s election, in cash, shares of Common Stock or a combination thereof. The initial conversion rate was 90.8038 shares of Common Stock per $1,000 principal amount of the Convertible Notes (equivalent to an initial conversion price of approximately $11.01 per share of Common Stock), representing an initial conversion premium of approximately 22.5% to the $8.99 last reported sale price of the Common Stock on The New York Stock Exchange on September 17, 2020. The conversion rate is subject to adjustment for certain events, including distributions and dividends paid to holders of Common Stock. At ~~June 29, 2023,~~March 28, 2024, the applicable conversion rate is ~~91.9631~~93.2680 shares of Common Stock per $1,000 principal amount of the Convertible Notes (equivalent to an applicable conversion price of approximately ~~$10.87~~$10.72 per share of Common Stock). If the Company undergoes certain

Table of Contents

THE MARCUS CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE 13 WEEKS ENDED MARCH 28, 2024

(in thousands, except share and per share data)

fundamental changes, holders of Convertible Notes may require the Company to repurchase for cash all or part of their Convertible Notes for a purchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In addition, if a make-whole fundamental change occurs prior to the maturity date, the Company will, under certain circumstances, increase the conversion rate for holders who convert Convertible Notes in connection with such make-whole fundamental change. The Company may not redeem the Convertible Notes before maturity and no “sinking fund” is provided for the Convertible Notes. The Indenture includes covenants customary for securities similar to the Convertible Notes, sets forth certain events of default after which the Convertible Notes may be declared immediately due and payable and sets forth certain types of bankruptcy or insolvency events of default involving the Company and certain of its subsidiaries after which the Convertible Notes become automatically due and payable.

Since the Company’s fiscal 2021 second quarter through the Company’s fiscal ~~2023 third~~2024 second quarter, the Company’s Convertible Notes were (are) eligible for conversion at the option of the holders as the last reported sale price of the Common Stock was greater than or equal to 130% of the applicable conversion price for at least 20 trading days during the last 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter. The Company has the ability to settle the conversion in Company stock. As such, the Convertible Notes will continue to be classified as long-term. Future convertibility and resulting balance sheet classification of this liability will be monitored at each quarterly reporting date and will be analyzed dependent upon market prices of the Company’s Common Stock during the prescribed measurement period. No Convertible Notes have been converted to date and the Company does not expect any to be converted within the next 12 months.

In connection with the pricing of the Convertible Notes on September 17, 2020, and in connection with the exercise by the Initial Purchasers (as defined in the Convertible Notes purchase agreement) of their option to purchase additional Convertible Notes on September 18, 2020, the Company entered into privately negotiated Capped Call Transactions (the “Capped Call Transactions”) with certain of the Initial Purchasers and/or their respective affiliates and/or other financial institutions (the “Capped Call Counterparties”). The Capped Call Transactions are expected generally to reduce potential dilution of the Company’s common stock upon any conversion of the Convertible Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of such converted Convertible Notes, as the case may be, in the event that the market price per share of the Company’s common stock, as measured under the terms of the Capped Call Transactions, is greater than the strike price of the Capped Call Transactions, which initially corresponds to the conversion price of the Convertible Notes and is subject to anti-dilution adjustments substantially similar to those applicable to the conversion rate of the Convertible Notes. If, however, the market price per share of the Company’s common stock, as measured under the terms of the Capped Call Transactions, exceeds the cap price of the Capped Call Transactions, there would nevertheless be dilution to the extent that such market price exceeds the cap price of the Capped Call Transactions. The cap price of the Capped Call Transactions was initially $17.98 per share (in no event shall the cap price be less than the strike price of $11.0128), which represents a premium of 100% over the last reported sale price of the Common Stock of $8.99 per share on The New York Stock Exchange on September 17, 2020. Under the terms of the Capped Call Transactions, the cap price is subject to adjustment for certain events, including distributions and dividends paid to holders of Common Stock. At ~~June 29, 2023,~~March 28, 2024, the adjusted cap price is approximately ~~$17.75~~$17.51 per share. The Capped Call Transactions are separate transactions entered into by the Company with the Capped Call Counterparties, are not part

~~Table of Contents~~

~~THE MARCUS CORPORATION~~

~~CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~FOR THE 13 AND 26 WEEKS ENDED JUNE 29, 2023~~

~~(in thousands, except share and per share data)~~

of the terms of the Convertible Notes and will not change the rights of holders of the Convertible Notes under the Convertible Notes and the Indenture.

3. Leases

The Company determines if an arrangement is a lease at inception. The Company evaluates each lease for classification as either a finance lease or an operating lease according to ~~accounting guidance ASU~~Accounting Standards Codification No. ~~2016-02,~~842, Leases ~~(Topic 842)~~. The Company performs this evaluation at the inception of the lease and when a modification is made to a lease. The Company leases real estate and equipment with lease terms of one year to 45 years, some of which include options to extend and/or terminate the lease.

The majority of the Company’s lease agreements include fixed rental payments. For those leases with variable payments based on increases in an index subsequent to lease commencement, such payments are recognized as variable lease expense

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THE MARCUS CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE 13 WEEKS ENDED MARCH 28, 2024

(in thousands, except share and per share data)

as they occur. Variable lease payments that do not depend on an index or rate, including those that depend on the Company’s performance or use of the underlying asset, are also expensed as incurred. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term.

Total lease cost consists of the following:


			13 Weeks Ended				26 Weeks Ended
			13 Weeks Ended
			13 Weeks Ended
			13 Weeks Ended
Lease Cost
Lease Cost
Lease Cost	Lease Cost	Classification	June 29, 2023		June 30, 2022		June 29, 2023		June 30, 2022

Finance lease costs:	Finance lease costs:

Finance lease costs:

Finance lease costs:
Amortization of finance lease assets
Amortization of finance lease assets
Amortization of finance lease assets	Amortization of finance lease assets	Depreciation and amortization	$	688	$	696	$	1,379	$	1,401
Interest on lease liabilities	Interest on lease liabilities	Interest expense	192		216		390		437
			$	880	$	912	$	1,769	$	1,838
Interest on lease liabilities
Interest on lease liabilities
			$
			$
			$
Operating lease costs:
Operating lease costs:
Operating lease costs:	Operating lease costs:
Operating lease costs	Operating lease costs	Rent expense	$	6,033	$	6,364	$	12,077	$	12,741
Operating lease costs
Operating lease costs
Variable lease cost
Variable lease cost
Variable lease cost	Variable lease cost	Rent expense	527		178		943		15
Short-term lease cost	Short-term lease cost	Rent expense	34		36		67		72
			$	6,594	$	6,578	$	13,087	$	12,828
Short-term lease cost
Short-term lease cost
			$
			$
			$

Additional information related to leases is as follows:

13 Weeks Ended

26 Weeks Ended

13 Weeks Ended

Other Information

June 29, 2023

June 30, 2022

June 29, 2023

June 30, 2022

Cash paid for amounts included in the measurement of lease liabilities:

Financing cash flows from finance leases

645

752

1,201

1,336

Operating cash flows from finance leases

192

216

390

437

Operating cash flows from finance leases

Operating cash flows from operating leases

6,429

7,012

12,859

14,136

Right of use assets obtained in exchange for new lease obligations:

Finance lease liabilities

136

116

136

188

Operating lease liabilities

—

183

Operating lease liabilities


	March 28, 2024		December 28, 2023

Finance leases:
Property and equipment – gross	$	30,106	$	30,106
Accumulated depreciation and amortization	(18,571)		(17,956)
Property and equipment - net	$	11,535	$	12,150

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THE MARCUS CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE 13 ~~AND 26~~ WEEKS ENDED ~~JUNE 29, 2023~~MARCH 28, 2024

(in thousands, except share and per share data)

June 29, 2023 December 29, 2022
Finance leases:
Property and equipment – gross $ 29,997 $ 29,885
Accumulated depreciation and amortization (16,687) (15,332)
Property and equipment - net $ 13,310 $ 14,553

Remaining lease terms and discount rates are as follows:

Lease Term and Discount Rate

June 29, 2023

December 29, 2022

Lease Term and Discount Rate

March 28, 2024

December 28, 2023

Weighted-average remaining lease terms:

Finance leases

7 years

Finance leases

6 years

7 years

Operating leases

12 years

Operating leases

11 years

12 years

Weighted-average discount rates:

Finance leases

4.59

4.64

4.62

Operating leases

4.51

Operating leases

4.67

4.52

Deferred rent payments of approximately ~~$753~~$647 for the Company’s operating leases have been included in the total operating lease obligations as of ~~June 29, 2023,~~March 28, 2024, of which approximately ~~$550~~$197 is included in long-term operating lease obligations.

4. Share Based Compensation

During the 13 weeks ended March 28, 2024, the Company granted restricted stock, restricted stock units (RSUs) and performance stock units (PSUs) to certain executives and associates.

Restricted Stock and Restricted Stock Units

During the 13 weeks ended March 28, 2024, the Company granted (i) an annual award of restricted stock and RSUs with a vesting period of 50% after two years and 100% after three years, and (ii) a special long-term incentive and retention award of restricted stock to certain executives with a vesting period of 100% after four years, or upon retirement after three years. Restricted stock awards are issued and outstanding common stock at the time of the grant and become unrestricted upon the vesting date. RSU awards are payable in common stock upon vesting. The Company expenses the cost of restricted stock and RSU awards over the vesting period based on the fair value of the award at the date of grant.

Performance Stock Units

During the 13 weeks ended March 28, 2024, the Company granted PSUs with vesting subject to the Company’s achievement of performance goals expressed in terms of (i) earnings before interest, taxes, depreciation and amortization, or EBITDA, growth rate ranking relative to the Russell 2000 Index with respect to 25% of the total number of performance stock unit awards, and (ii) the Company’s average return on invested capital, or ROIC, ranking relative to the Russell 2000 Index with respect to 75% of the total number of performance stock unit awards. For grants awarded in fiscal 2024, the PSU performance goals relate to the three-year performance period from fiscal 2024-2026. PSUs are payable at the end of their respective performance period in common stock, and the number of PSUs awarded can range from zero to 150% depending on the Company’s achievement of the relative performance metrics. The Company expenses the cost of PSUs based on the fair value of the awards at the date of grant and the estimated achievement of the performance metric, ratable over the performance period of three fiscal years.

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THE MARCUS CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE 13 WEEKS ENDED MARCH 28, 2024

(in thousands, except share and per share data)

A summary of the Company’s stock option, restricted stock and RSU and PSU activity and related information follows, with PSUs reflected at the target achievement percentage until the completion of the performance period (shares in thousands):


	Stock Options			Restricted Stock & RSUs			PSUs
	Options	Weighted-Average Exercise Price		Shares / Units	Weighted-Average Fair Value		Units	Weighted-Average Fair Value
December 28, 2023	3,173	$	22.69	238	$	17.41	—	$	—
Granted	—	—		501	14.84		143	14.84
Exercised (1)	—	—		—	—		—	—
Vested (2)	—	—		(47)	21.37		—	—
Forfeited	(7)	23.16		—	—		—	—
March 28, 2024	3,166	$	22.69	692	$	15.28	143	$	14.84

(1)Exercise activity only applicable to stock options.

(2)Vesting activity not applicable to stock options.

Share-based compensation expense was $2,514 and $2,172 during the 13 weeks ended March 28, 2024 and March 30, 2023, respectively. As of March 28, 2024, total unrecognized share-based compensation expense related to stock options was $3,385, which will be amortized to expense over the weighted-average remaining life of 2.3 years. As of March 28, 2024, total unrecognized share-based compensation expense related to non-vested restricted stock, RSUs and PSUs was $9,736 which will be amortized over the weighted-average remaining service period of 3.2 years.

At March 28, 2024, there were 420,766 shares available for grants of additional stock options, restricted stock, RSUs, PSUs and other types of equity awards under the current plan.

5. Income Taxes

The Company’s effective income tax rate for the 13 ~~and 26~~ weeks ended ~~June 29,~~March 28, 2024 and March 30, 2023 was ~~23.3%~~38.3% and ~~24.0%~~23.1%, ~~respectively,~~respectively. The fiscal 2024 first quarter effective income tax rate was negatively impacted by excess compensation subject to deduction limitations. The fiscal 2023 first quarter effective income tax rate was favorably impacted by a decrease in valuation allowances related to deferred tax assets for state net operating loss carryforwards.

6. Joint Venture Transactions

In March 2024, the Company formed a joint venture with Hempel Real Estate (“Hempel”) and Robinson Park (“RP”) to acquire the Loews Minneapolis Hotel, a 251 guest room and suite full-service lifestyle hotel located in downtown Minneapolis, Minnesota. The acquired hotel was ~~34.7%~~rebranded as The Lofton Hotel (“Lofton”) under the Tapestry Collection by Hilton flag. The Company invested $5,620 for a 33.3% equity interest in the Lofton joint venture and ~~23.1%~~entered into a management agreement for the 13hotel. Subsequent to its initial investment in the joint venture, the Company sold an 8.6% interest to a minority investor for $1,500, reducing its equity interest in the Lofton joint venture to 24.7%. The Company accounts for its investment in the Lofton joint venture on the equity method.

A wholly-owned subsidiary of the Lofton joint venture entity, as the borrower, financed the acquisition of and ~~26 weeks ended June 30, 2022, respectively. The effective tax rate~~future improvements to the hotel with a mortgage loan. In connection with this mortgage loan, the Company provided an environmental indemnity and a several payment guaranty that provides that the lender can recover losses from the Company, a principal in Hempel, and a principal in RP for certain events of default of the borrower up to $6.2 million for the ~~13 weeks ended June 30, 2022 includes discrete tax expense related to various matters. During~~Company. Under the ~~26 weeks ended June 30, 2022,~~terms of a cross-indemnity agreement among the guarantors, the other two guarantors have fully indemnified the Company ~~received $22,959~~under the guarantees for any losses in excess of ~~income tax refunds related to~~ its ~~fiscal 2020 tax return, including $636 of interest which is included within income tax benefit in~~proportionate liability under the ~~consolidated statement of earnings (loss).~~several payment guaranty and environmental indemnity.

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THE MARCUS CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE 13 WEEKS ENDED MARCH 28, 2024

(in thousands, except share and per share data)

7. Business Segment Information

The Company’s primary operations are reported in the following business segments: Theatres and Hotels/Resorts. Corporate items include amounts not allocable to the business segments. Corporate revenues consist principally of rent and the corporate operating loss includes general corporate expenses. Corporate information technology costs and accounting shared services costs are allocated to the business segments based upon several factors, including actual usage and segment revenues.

~~Table of Contents~~

~~THE MARCUS CORPORATION~~

~~CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~FOR THE 13 AND 26 WEEKS ENDED JUNE 29, 2023~~

~~(in thousands, except share and per share data)~~

Following is a summary of business segment information for the 13 ~~and 26~~ weeks ended ~~June 29, 2023~~March 28, 2024 and ~~June~~March 30, ~~2022:~~2023:

13 Weeks Ended Theatres Hotels/
Resorts Corporate
Items Total
June 29, 2023
Revenues $ 136,850 $ 70,066 $ 91 $ 207,007
Operating income (loss) 19,811 6,105 (5,106) 20,810
Depreciation and amortization 11,317 4,588 89 15,994
13 Weeks Ended Theatres Hotels/
Resorts Corporate
Items Total
June 30, 2022
Revenues $ 129,437 $ 69,001 $ 117 $ 198,555
Operating income (loss) 16,430 6,817 (4,354) 18,893
Depreciation and amortization 11,863 4,801 88 16,752


26 Weeks Ended		Theatres		Hotels/ Resorts		Corporate Items		Total
June 29, 2023
13 Weeks Ended										13 Weeks Ended	Theatres	Hotels/ Resorts	Corporate Items	Total
March 28, 2024
Revenues
Revenues
Revenues
Operating loss
Depreciation and amortization

13 Weeks Ended
13 Weeks Ended
13 Weeks Ended											Theatres	Hotels/ Resorts	Corporate Items	Total
March 30, 2023
Revenues
Revenues
Revenues	Revenues	$	233,226	$	125,877	$	180	$	359,283
Operating income (loss)	Operating income (loss)	21,330		1,073		(10,581)		11,822
Depreciation and amortization	Depreciation and amortization	22,805		8,889		176		31,870

26 weeks ended		Theatres		Hotels/ Resorts		Corporate Items		Total
June 30, 2022
Revenues		$	208,928	$	121,658	$	211	$	330,797
Operating income (loss)		8,410		3,843		(10,157)		2,096
Depreciation and amortization		24,054		9,751		178		33,983

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THE MARCUS CORPORATION

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Special Note Regarding Forward-Looking Statements

Certain matters discussed in this Quarterly Report on Form 10-Q and the accompanying annual report to shareholders, particularly in the Shareholders’ Letter and Management’s Discussion and Analysis, ~~of Financial Condition and Results of Operations (“MD&A”) and elsewhere in this Form 10-Q~~ are “forward-looking statements” intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements may generally be identified as such because the context of such statements include words such as we “believe,” “anticipate,” “expect” or words of similar import. Similarly, statements that describe our future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties which may cause results to differ materially from those expected, including, but not limited to, the following: (1) the adverse effects ~~the COVID-19 pandemic, or~~ future pandemics may have on our theatre and hotels and resorts businesses, results of operations, liquidity, cash flows, financial condition, access to credit markets and ability to service our existing and future indebtedness; (2) the availability, in terms of both quantity and audience appeal, of motion pictures for our theatre division (including disruptions in the production of films due to events such as a strike by actors, writers or ~~directors)~~directors or future pandemics); (3) the effects of theatre industry dynamics such as the maintenance of a suitable window between the date such motion pictures are released in theatres and the date they are released to other distribution channels; (4) the effects of adverse economic conditions in our markets; (5) the effects of adverse economic conditions on our ability to obtain financing on reasonable and acceptable terms, if at all; (6) the effects on our occupancy and room rates caused by the relative industry supply of available rooms at comparable lodging facilities in our markets; (7) the effects of competitive conditions in our markets; (8) our ability to achieve expected benefits and performance from our strategic initiatives and acquisitions; (9) the effects of increasing depreciation expenses, reduced operating profits during major property renovations, impairment losses, and preopening and start-up costs due to the capital intensive nature of our business; (10) the effects of changes in the availability of and cost of labor and other supplies essential to the operation of our business; (11) the effects of weather conditions, particularly during the winter in the Midwest and in our other markets; (12) our ability to identify properties to acquire, develop and/or manage and the continuing availability of funds for such development; (13) the adverse impact on business and consumer spending on travel, leisure and entertainment resulting from terrorist attacks in the United States, other incidents of violence in public venues such as hotels and movie theatres or epidemics; and (14) a disruption in our business and reputational and economic risks associated with civil securities claims brought by shareholders. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. Our forward-looking statements are based upon our assumptions, which are based upon currently available information. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are made only as of the date of this Form 10-Q and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

RESULTS OF OPERATIONS

General

We report our consolidated and individual segment results of operations on a 52- or 53-week fiscal year ending on the last Thursday in December. Fiscal ~~2023~~2024 is a 52-week year beginning on December ~~30, 2022~~29, 2023 and ending on December ~~28, 2023.~~26, 2024. Fiscal ~~2022~~2023 was a 52-week year that began on December ~~31, 2021~~30, 2022 and ended on December ~~29, 2022.~~28, 2023.

We divide our fiscal year into three 13-week quarters and a final quarter consisting of 13 or 14 weeks. The ~~second~~first quarter of fiscal 2024 consisted of the 13-week period beginning on December 29, 2023 and ended on March 28, 2024. The first quarter of fiscal 2023 consisted of the 13-week period beginning on March 31, 2023 and ended on June 29, 2023. The second quarter of fiscal 2022 consisted of the 13-week period beginning April 1, 2022 and ended on June 30, 2022. The first half of fiscal 2023 consisted of the 26-week period beginning on December 30, 2022 and ended on ~~June 29,~~March 30, 2023. ~~The first half of fiscal 2022 consisted of the 26-week period beginning December 31, 2021 and ended on June 30, 2022.~~ Our primary operations are reported in the following two business segments: movie theatres and hotels and resorts. Within this MD&A, amounts for totals, subtotals, and variances may not recalculate exactly within tables due to rounding as they are calculated using the unrounded numbers.

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COVID-19 did not materially impact our results for the first quarter and first half of fiscal 2023. For discussion regarding the impact of COVID-19 and related economic conditions on our results for the year ended December 29, 2022, see “Part II-Item 7-Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2022 Annual Report. For discussion regarding potential impacts of future pandemics refer to the discussion of our operational risks and financial risks found in “Part I-Item 1A-Risk Factors” in our 2022 Annual Report.

Overall Results

The following table sets forth revenues, operating income (loss), other income (expense), net earnings (loss) and net earnings (loss) per diluted common share for the ~~second~~first quarter ~~and first half~~ of fiscal ~~2023~~2024 and fiscal ~~2022~~2023 (in millions, except for per share and variance percentage data):

Second Quarter First Half
Variance Variance
F2023 F2022 Amt. Pct. F2023 F2022 Amt. Pct.
Revenues $ 207.0 $ 198.6 $ 8.5 4.3 % $ 359.3 $ 330.8 $ 28.5 8.6 %
Operating income 20.8 18.9 1.9 10.1 % 11.8 2.1 9.7 464.0 %
Other income (expense) (3.2) (5.2) 1.9 37.3 % (6.6) (9.8) 3.3 33.2 %
Net earnings (loss) $ 13.5 $ 9.0 $ 4.5 50.3 % $ 4.0 $ (5.9) $ 9.9 167.3 %
Net earnings (loss) per common share - diluted $ 0.35 $ 0.24 $ 0.11 45.8 % $ 0.13 $ (0.19) $ 0.32 168.4 %


	First Quarter
					Variance
	F2024		F2023		Amt.		Pct.
Revenues	$	138.5	$	152.3	$	(13.7)	(9.0)	%
Operating loss	(16.7)		(9.0)		(7.7)		(85.4)	%
Other income (expense)	(2.6)		(3.3)		0.8		22.6	%
Net loss	$	(11.9)	$	(9.5)	$	(2.4)	(25.4)	%
Net loss per common share - diluted	$	(0.38)	$	(0.31)	$	(0.07)	(22.6)	%

Revenues ~~increased~~decreased and operating ~~income,~~loss, net ~~earnings (loss)~~loss and net ~~earnings (loss)~~loss per diluted common share improved during the second quarter and first half of fiscal 2023 compared to the second quarter and first half of fiscal 2022. Increased revenues and operating income from both our theatre division and hotels and resorts division contributed to the improvement during the second quarter and first half of fiscal 2023 compared to the second quarter and first half of fiscal 2022. The first half of fiscal 2022 was negatively impacted due to the fact that releases of new films were limited and travel was reduced due to the lingering impacts of the COVID-19 pandemic and subsequent variants, particularlyincreased during the first quarter of fiscal ~~2022.~~

~~Net earnings (loss)~~2024 compared to the first quarter of fiscal 2023. The decline in our overall operating results was primarily due to a decrease in revenues and operating income from our theatre division during the ~~second~~first quarter of fiscal 2024 compared to the first quarter of fiscal 2023. Revenues from our hotels and resorts division increased during the first ~~half~~quarter of fiscal 2024 compared to the first quarter of fiscal 2023, while operating loss increased primarily due to an increase in depreciation expense during the first quarter of fiscal 2024 compared to the first quarter of fiscal 2023. Our first quarter is typically the seasonally weakest quarter of our fiscal year due to the traditionally reduced level of winter travel at our predominantly Midwestern portfolio of owned hotels. Our first quarter also often has fewer blockbuster films released by studios compared to the other quarters of our fiscal year.

Net loss during the first quarter of fiscal 2024 was favorably impacted by decreased interest expense compared to the ~~second~~first quarter ~~and first half~~ of fiscal ~~2022~~2023 and increased investment income during the ~~second~~first quarter ~~and first half~~ of fiscal ~~2023~~2024 compared to ~~investment losses in~~ the ~~second~~first quarter ~~and first half~~ of fiscal ~~2022.~~2023.

We recognized investment income of ~~$0.4 million and $0.6~~$0.7 million during the ~~second~~first quarter ~~and first half~~ of fiscal ~~2023, respectively,~~2024 compared to ~~investment losses~~$0.3 million during the first quarter of ~~$0.5 million and $0.7 million for the respective~~ fiscal ~~2022 periods.~~2023. Variations in investment income were due to changes in the value of marketable securities.

Our interest expense totaled ~~$3.1 million and $6.1~~$2.5 million for the ~~second~~first quarter ~~and first half~~ of fiscal ~~2023, respectively,~~2024 compared to ~~$4.1 million and $8.2~~$3.0 million for the ~~respective~~first quarter of fiscal ~~2022 periods.~~2023. The decrease in interest expense in fiscal ~~2023~~2024 was primarily due to decreased borrowings and a decrease in non-cash amortization of deferred financing costs. Changes in our borrowing levels due to variations in our operating results, capital expenditures, acquisition opportunities (or the lack thereof) and asset sale proceeds, among other items, may impact, either favorably or unfavorably, our actual reported interest expense in future periods, as may changes in short-term interest rates.

We reported an income tax ~~expense~~benefit for the ~~second~~first quarter of fiscal ~~2023~~2024 of ~~$4.1 million compared to income tax expense of $4.8 million during the second quarter of fiscal 2022. We reported income tax expense for the first half of fiscal 2023 of $1.3~~$7.4 million compared to an income tax benefit of ~~$1.8~~$2.8 million during the first ~~half~~quarter of fiscal ~~2022.~~2023. Our fiscal ~~2023~~2024 first ~~half~~quarter effective income tax rate was ~~24.0%.~~38.3%, and was negatively impacted by excess compensation subject to deduction limitations. Our fiscal ~~2022~~2023 first ~~half~~quarter effective income tax rate was 23.1%., and was favorably impacted by a decrease in valuation allowances related to deferred tax assets for state net operating loss carryforwards. We anticipate that our effective income tax rate for fiscal ~~2023~~2024 may be in the ~~24-28%~~36-38% range, excluding any potential changes in federal or state income tax rates, valuation allowance adjustments or other one-time tax benefits. Our actual fiscal ~~2023~~2024 effective income tax rate may be different from our estimated quarterly rates depending upon actual facts and circumstances.

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Theatres

The following table sets forth revenues, operating income (loss) and operating margin for our theatre division for the ~~second~~first quarter ~~and first half~~ of fiscal ~~2023~~2024 and fiscal ~~2022~~2023 (in millions, except for variance percentage and operating margin):


		Second Quarter										First Half
								Variance										Variance
		F2023			F2022			Amt.		Pct.		F2023			F2022			Amt.		Pct.
		First Quarter
		First Quarter
		First Quarter
								Variance
								Variance
								Variance
		F2024
		F2024
		F2024
Revenues	Revenues	$	136.9		$	129.4		$	7.4	5.7	%	$	233.2		$	208.9		$	24.3	11.6	%
Operating income		19.8			16.4			3.4		20.6	%	21.3			8.4			12.9		153.6	%
Revenues
Revenues
Operating income (loss)
Operating income (loss)
Operating income (loss)
Operating margin (% of revenues)	Operating margin (% of revenues)	14.5		%	12.7		%					9.1		%	4.0		%
Operating margin (% of revenues)
Operating margin (% of revenues)

Our theatre division revenues and operating income ~~increased during~~decreased with weaker performances from films carrying over from the ~~second~~holiday season into the first quarter ~~and first half~~ of fiscal ~~2023, with an increase in the number of new films released by movie studios resulting in higher attendance~~2024, compared to the first ~~half~~quarter of fiscal ~~2022.~~2023 which benefited from a strong carryover performance from Avatar: The Way of Water. In addition, the film slate in the first quarter of fiscal 2024 was negatively impacted by the content supply chain disruption from the shutdown of movie production during the WGA and SAG-AFTRA labor strikes in 2023, which contributed to a weaker slate of available films compared to the first quarter of fiscal 2023. Our operating income during the ~~second~~first quarter ~~and first half~~ of fiscal ~~2023 significantly improved~~2024 decreased compared to the ~~second~~first quarter ~~and first half~~ of fiscal ~~2022~~2023 as a result of ~~higher overall revenues and greater labor productivity.~~decreased theatre attendance.

The following table provides a further breakdown of the components of revenues for the theatre division for the ~~second~~first quarter ~~and first half~~ of fiscal ~~2023~~2024 and fiscal ~~2022~~2023 (in millions, except for variance percentage):


		Second Quarter								First Half
						Variance								Variance
		F2023		F2022		Amt.		Pct.		F2023		F2022		Amt.		Pct.
		First Quarter
		First Quarter
		First Quarter
						Variance
						Variance
						Variance
		F2024
		F2024
		F2024
Admission revenues
Admission revenues
Admission revenues	Admission revenues	$	69.0	$	63.1	$	5.9	9.4	%	$	116.6	$	101.5	$	15.1	14.9	%
Concession revenues	Concession revenues	59.7		58.1		1.6		2.7	%	102.1		93.6		8.5		9.0	%
Concession revenues
Concession revenues
Other revenues
Other revenues
Other revenues	Other revenues	8.2		8.2		—		(0.6)	%	14.5		13.8		0.7		5.1	%
Total revenues	Total revenues	136.9		129.4		7.4		5.7	%	233.2		208.9		24.3		11.6	%
Total revenues
Total revenues

According to data received from Comscore (a national box office reporting service for the theatre industry) and compiled by us to evaluate our fiscal ~~2023 second~~2024 first quarter ~~and first half~~ results, U.S. box office receipts ~~increased 13.6%~~decreased 9.0% during our fiscal ~~2023 second~~2024 first quarter ~~and 18.3% during our fiscal 2023 first half~~ compared to the same comparable weeks in fiscal ~~2022,~~2023, indicating that our ~~increase~~decrease in admission revenues for comparable theatres (excluding theatres closed during the past year) during the ~~second~~first quarter ~~and first half~~ of fiscal ~~2023~~2024 of ~~9.7% and 15.2%~~13.8% underperformed the industry by ~~3.9 and 3.1~~4.8 percentage ~~points, respectively.~~points. We believe our underperformance is attributable to the more significant impact of lingering variants of COVID-19 in other regions of the country than in our primarily Midwestern markets during the first half of fiscal 2022, representing a higher opportunity for growth in 2023 nationally than in our markets. We also believe our underperformance during the ~~second~~first quarter of fiscal 2024 compared to the first quarter of fiscal 2023 is attributable to an unfavorable film mix during the first quarter of fiscal 2024 that was more appealing to audiences in other parts of the U.S. ~~outside of~~than in our Midwestern markets, ascompared to a favorable film mix during the first quarter of fiscal 2023 that included Avatar: The Way of Water, which played well ~~as a dry May and June with few rainy days~~in our Midwestern markets. In addition, the top performing film in the ~~Midwest,~~first quarter of fiscal 2024 (Dune: Part Two) significantly outperformed on IMAX screens, which represent only approximately 2% of our premium large format screens, resulting in ~~customers preferring to enjoy early summer weather~~IMAX screens taking market share from our UltraScreen and ~~outdoor activities over going to the movies.~~SuperScreen premium large format screens in certain markets.

Additional data received and compiled by us from Comscore indicates our admission revenues during the ~~second~~first quarter ~~and first half~~ of fiscal ~~2023~~2024 represented approximately ~~3.1% and 3.2%, respectively,~~3.0% of the total admission revenues in the U.S. during the periods (commonly referred to as market share in our industry). This represents a decrease over our market share for comparable theatres of approximately 3.2% and 3.3% during the second quarter and first half of fiscal 2022, respectively, which we believe is also attributable to lingering COVID-19 variants more significantly impacting other regions of the country during the comparable periods in fiscal 2022. Our reported market share during the comparable fiscal 2019 periods prior to the pandemic, was approximately 3.1%. Our goal is to continue our ~~past~~historical long-term pattern of outperforming the industry, but our ability to do so in any given quarter will likely be partially dependent upon film mix, weather and the competitive landscape in our markets.

Total theatre attendance for our comparable theatres decreased ~~3.8%~~17.5% during the ~~second~~first quarter of fiscal ~~2023~~2024 compared to the ~~second~~first quarter of fiscal ~~2022,~~2023, which was primarily attributable to a weaker film slate and lower ~~performances~~box office performance from the top ~~three films this year~~film during the first quarter of fiscal 2024 (Dune: Part Two) versus the top ~~three films~~film last fiscal year during the ~~second~~first quarter ~~(led by~~ (~~Top Gun: Maverick~~Avatar: The Way of Water)~~, partially offset by~~. During the ~~favorable~~

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~~impact of an increase in the number of~~fiscal 2024 there were 24 wide-release films (films showed in over approximately 1,500 theatres in the U.S.)~~. During the second quarter of fiscal 2023 there were 29 wide-release films~~ compared to ~~19 wide-release films during the second quarter of fiscal 2022.~~

Total theatre attendance for our comparable theatres increased 3.0% during the first half of fiscal 2023 compared to the prior year period, resulting primarily from an increase in the number of wide-release films. During the first half of fiscal 2023 there were 52 wide-release films compared to 3823 wide-release films during the first ~~half~~quarter of fiscal ~~2022.~~2023.

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While the number of wide-release films during the first quarter of fiscal 2024 was similar compared to the prior fiscal year period, the average opening weekend U.S. box office gross per wide release was approximately 25% lower, reflecting a weaker film slate with fewer significant franchises and a generally lower quality of product.

Our highest grossing films during the fiscal ~~2023 second~~2024 first quarter included ~~The Super Mario Bros. Movie~~Dune: Part Two, ~~Guardians of the Galaxy Vol. 3, Spider-Man Across the Spider-Verse, The Little Mermaid~~Kung Fu Panda 4, Wonka, Bob Marley: One Love, and ~~Fast X~~Migration. Our top five films during our fiscal ~~2023 second~~2024 first quarter accounted for ~~64%~~41% of our total box office results, compared to ~~68%~~49% (including event cinema) for the top five films during the ~~second~~first quarter of fiscal ~~2022,~~2023, both expressed as a percentage of the total admission revenues for the relevant period. A decreased concentration of blockbuster films during a given quarter often has the effect of lowering our film rental costs during the period, as generally the better a particular film performs, the greater the film rental cost tends to be as a percentage of box office receipts. ~~While the second quarter~~As a result of ~~fiscal 2023 was slightly~~a less concentrated ~~on blockbuster films compared to the second quarter of fiscal 2022,~~film slate, our overall film ~~rental~~ cost as a percentage of admission revenues ~~remained flat~~decreased during the first quarter of fiscal 2024 compared to the same period in the prior fiscal year.

Our average ticket price increased ~~14.2% and 12.0%~~4.9% during the ~~second~~first quarter ~~and first half~~ of fiscal ~~2023~~2024 compared to the ~~second~~first quarter ~~and first half~~ of fiscal ~~2022, respectively,~~2023, and was favorably impacted by ~~inflationary~~general admission ticket price increases that we implemented ~~in the second quarter of fiscal 2022 and in~~during the first quarter of fiscal 2023 in response to increases in labor and supply costs, ~~and by a higher percentage of 3D ticket sales. During~~pricing changes to our Value Tuesday promotion that were implemented during the last week of the first quarter of fiscal 2023, ~~we implemented several pricing changes to our Value Tuesday promotion across our theatre circuit, which has historically offered $5 admission~~ and ~~free complementary-size popcorn to our loyalty program members. Our new Value Tuesday promotion features $6 admission for members~~an increase in the percentage of our ~~free Magical Movie Rewards (MMR) loyalty program and $7 admission~~weekly attendance on days other than Value Tuesday. Our average ticket price was negatively impacted by a lower percentage of ticket sales for ~~non-MMR customers.~~3D films during the first quarter of fiscal 2024 compared to the first quarter of fiscal 2023. The overall increase in average ticket price favorably impacted our admission revenues of our comparable theatres by ~~$8.5 million and $12.4~~$1.8 million during the ~~second~~first quarter ~~and first half~~ of fiscal ~~2023~~2024 compared to the ~~second~~first quarter ~~and first half~~ of fiscal ~~2022, respectively.~~2023.

Our average concession revenues per person increased by ~~7.3% and 6.3%~~0.8% during the ~~second~~first quarter ~~and~~of fiscal 2024 compared to the first ~~half~~quarter of fiscal 2023, ~~compared to the second quarter and first half of fiscal 2022,~~ respectively, primarily due to inflationary increases in concessions prices in response to increases in food and labor costs and due to the net positive impact of changes to our Value Tuesday ~~promotion, which replaced free complementary-size popcorn with a 20% discount on all concessions, food and non-alcoholic beverages for MMR members. We also believe average~~promotion. The increase in concession ~~revenues per person~~pricing was ~~positively impacted~~partially offset by a ~~new food and beverage menu introduced~~decrease in the ~~fourth~~number of concession items purchased per customer, which we believe is attributable to an unfavorable film mix during the first quarter of fiscal ~~2022. Finally, we believe~~2024 that ~~an increased percentage of customers buying their concessions~~included fewer large blockbuster films that tend to result in ~~advance using our website, kiosk or our mobile app likely contributed to higher average~~more concession ~~revenues~~sales per ~~person, as our experience has shown that customers are more likely to purchase more items when they order and pay electronically.~~customer. The overall increase in average concession revenues per person favorably impacted our concession revenues of our comparable theatres by ~~$3.9 million and $6.0~~$0.1 million during the ~~second~~first quarter ~~and first half~~ of fiscal ~~2023~~2024 compared to the ~~second~~first quarter ~~and first half~~ of fiscal ~~2022, respectively.~~2023.

Other revenues during the ~~second~~first quarter of fiscal ~~2023 were consistent with the second quarter of fiscal 2022. Other revenues increased~~2024 decreased by ~~$0.7~~$0.4 million ~~during the first half of fiscal 2023~~ compared to the first ~~half~~quarter of fiscal ~~2022.~~2023. The ~~increase~~decline was primarily due to the impact of ~~increased~~decreased attendance on internet surcharge ticketing fees and preshow and in-app advertising revenue.

~~Several films have performed well in the early weeks of our fiscal 2023 third quarter, including~~ ~~Indiana Jones &~~ The ~~Dial of Destiny, Mission: Impossible - Dead Reckoning Part One, Sound of Freedom, Barbie,~~ ~~and~~ ~~Oppenheimer.~~ ~~In fact, the last two films recently combined to produce the fourth highest box office weekend of all time. While the~~ quantity of films available for theatrical exhibition, ~~remains below pre-pandemic levels,~~including wide-release films, was negatively impacted during fiscal 2024 by the shutdown of movie production resulting from the WGA and SAG-AFTRA labor strikes that occurred during fiscal 2023. While the labor strikes were resolved in the fourth quarter of fiscal 2023 with film production resuming thereafter, we expect ~~to continue to see increases in~~ the quantity of new film releases available for theatrical exhibition during fiscal 2024 to be negatively impacted by the prolonged shutdown of movie production resulting in several film release dates shifting to fiscal 2025. While lead times for movie production to theatrical release are lengthy, based upon projected film and alternate content availability, we currently estimate that we may once again show an increased number of films ~~in 2023~~and alternate content events on our screens during fiscal 2025 compared to fiscal 2024, but we expect the ~~prior year. Although it is possible that schedule changes may occur, new~~number of wide-release films ~~scheduled~~shown during fiscal 2024 to ~~be released~~decrease compared to fiscal 2023.

We ended the first quarter of fiscal 2024 with a total of 993 company-owned screens in 79 theatres, compared to 1,053 company-owned screens in 84 theatres at the end of the first quarter of fiscal 2023. We made decisions to close several underperforming theatres during fiscal 2023, including one of our owned theatres in the ~~remainder~~first quarter of fiscal 2023, ~~that have potential to perform very well include~~ ~~Gran Turismo, Teenage Mutant Ninja Turtles: Mutant Mayhem, Blue Beetle, Strays, The Meg 2: The Trench, The Equalizer 3, The Nun II, The Expendables 4, Paw Patrol: The Mighty Movie, Killers~~two owned theatres in the second quarter of fiscal 2023, and two owned theatres and one leased theatre in the ~~Flower Moon, Dune: Part Two, Trolls Band Together, Hunger Games: The Ballad~~third quarter of ~~Songbirds and Snakes, Wish, Napoleon, Wonka, The Color Purple~~ ~~and~~ ~~Aquaman and the Lost Kingdom~~.fiscal 2023.

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Revenues for the theatre business and the motion picture industry in general are heavily dependent on the number of films produced by studios and the general audience appeal of available films, together with studio marketing, advertising and support campaigns and the maintenance of appropriate “windows” between the date a film is released in theatres and the date a motion picture is released to other channels, including premium video-on-demand (“PVOD”), video on-demand (“VOD”), streaming services and DVD. These are factors over which we have no control.

The quantity of films released to theatres is also dependent upon the timing of film production by the studios. On May 2, 2023, the union representing script writers, the Writers Guild of America (WGA), went on strike after its contract expired with the Alliance of Motion Picture and Television Producers (AMPTP), which represents media companies including film studios. On July 14, 2023, the union representing actors, the Screen Actors Guild - American Federation of Television and Radio Artists (SAG-AFTRA), also went on strike over an ongoing labor dispute with AMPTP. Film production has stopped as a result of these strikes, and a prolonged shutdown in film production may impact the film release schedule, particularly in 2024 and 2025.

We ended the second quarter of fiscal 2023 with a total of 1,027 company-owned screens in 82 theatres, compared to 1,064 company-owned screens in 85 theatres at the end of the second quarter of fiscal 2022. Early in our fiscal 2023 first quarter, we made the decision to close one of our owned theatres.

Hotels and Resorts

The following table sets forth revenues, operating ~~income~~loss and operating margin for our hotels and resorts division for the ~~second~~first quarter ~~and first half~~ of fiscal ~~2023~~2024 and fiscal ~~2022~~2023 (in millions, except for variance percentage and operating margin):


		Second Quarter										First Half
								Variance										Variance
		F2023			F2022			Amt.		Pct.		F2023			F2022			Amt.		Pct.
		First Quarter
		First Quarter
		First Quarter
								Variance
								Variance
								Variance
		F2024
		F2024
		F2024
Revenues	Revenues	$	70.1		$	69.0		$	1.1	1.5	%	$	125.9		$	121.7		$	4.2	3.5	%
Operating income		6.1			6.8			(0.7)		(10.4)	%	1.1			3.8			(2.8)		(72.1)	%
Revenues
Revenues
Operating loss
Operating loss
Operating loss
Operating margin (% of revenues)	Operating margin (% of revenues)	8.7		%	9.9		%					0.9		%	3.2		%
Operating margin (% of revenues)
Operating margin (% of revenues)

On December 16, 2022, we completed the sale of The Skirvin Hilton in Oklahoma City, Oklahoma (we held a majority-ownership position in this hotel prior to its sale). The results of The Skirvin Hilton are included in our divisional and consolidated results of operations during fiscal 2022 through the date of the sale.

~~Excluding The Skirvin Hilton from fiscal 2022 results, hotels~~Hotels and resorts revenues increased ~~8.5% and 10.7%~~2.5% during the ~~second~~first quarter ~~and first half~~ of fiscal ~~2023~~2024 compared to the ~~second~~first quarter ~~and first half~~ of fiscal ~~2022, respectively.~~2023. Our hotels and resorts division operating ~~income during the second quarter and first half of fiscal 2023 decreased compared to the second quarter and first half of fiscal 2022 due to the sale of The Skirvin Hilton (which had operating income~~loss during the first quarter ~~and first half~~ of fiscal ~~2022) and~~2024 increased ~~labor costs during the fiscal 2023 periods as we increased our staffing levels to enhance the customer experience~~ compared to the ~~second~~first quarter ~~and first half~~ of fiscal ~~2022 when various positions were unfilled~~2023 primarily due to ~~staffing shortages.~~

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an increase in depreciation expense from hotel renovations placed in service during fiscal 2023, offsetting the incremental profit on higher revenues.

The following table provides a further breakdown of the components of revenues for the hotels and resorts division for the ~~second~~first quarter ~~and first half~~ of fiscal ~~2023~~2024 and fiscal ~~2022~~2023 (in millions, except for variance percentage):


		Second Quarter								First Half
						Variance								Variance
		F2023		F2022		Amt.		Pct.		F2023		F2022		Amt.		Pct.
		First Quarter
		First Quarter
		First Quarter
						Variance
						Variance
						Variance
		F2024
		F2024
		F2024
Room revenues
Room revenues
Room revenues	Room revenues	$	28.6	$	28.9	$	(0.2)	(0.8)	%	$	46.5	$	46.3	$	0.2	0.4	%
Food/beverage revenues	Food/beverage revenues	18.6		19.0		(0.4)		(2.3)	%	33.8		33.5		0.2		0.7	%
Food/beverage revenues
Food/beverage revenues
Other revenues
Other revenues
Other revenues	Other revenues	13.2		12.9		0.3		2.4	%	26.4		26.0		0.4		1.7	%
Total revenues before cost reimbursements	Total revenues before cost reimbursements	60.4		60.8		(0.4)		(0.6)	%	106.7		105.8		0.9		0.8	%
Total revenues before cost reimbursements
Total revenues before cost reimbursements
Cost reimbursements
Cost reimbursements
Cost reimbursements	Cost reimbursements	9.7		8.3		1.4		17.2	%	19.2		15.9		3.3		21.0	%
Total revenues	Total revenues	$	70.1	$	69.0	$	1.1	1.5	%	$	125.9	$	121.7	$	4.2	3.5	%
Total revenues
Total revenues

Division total revenues before cost reimbursements ~~decreased~~increased $1.7 million, or 3.8%, during the ~~second~~first quarter of fiscal 2024 compared to the first quarter of fiscal 2023 ~~compared to the second quarter of fiscal 2022,~~ due to ~~the negative impact of the sale of The Skirvin Hilton. Excluding The Skirvin Hilton from fiscal 2022 results, division~~growth in food and beverage revenues ~~before cost reimbursements increased $4.1 million, or 7.2% during the second quarter of fiscal 2023 compared to the second quarter of fiscal 2022 due to~~and increased occupancy at four of our seven owned ~~hotels and increased average daily rate at six of our seven owned~~ hotels. Division total revenues before cost reimbursements increased during the first half of fiscal 2023 compared to the first half of fiscal 2022, despite the negative impact of the sale of the Skirvin Hilton, due to increased occupancy at five of our seven owned hotels and increased average daily rate at all seven of our owned hotels. Excluding The Skirvin Hilton from fiscal 2022 results, division revenues before cost reimbursements increased $8.9 million, or 9.0% during the first half of fiscal 2023 compared to the first half of fiscal 2022.

The following table sets forth certain operating statistics for the ~~second~~first quarter ~~and first half~~ of fiscal ~~2023~~2024 and fiscal ~~2022,~~2023, including our average occupancy percentage (number of occupied rooms as a percentage of available rooms), our average daily room rate, or ADR, and our total revenue per available room, or RevPAR, for comparable company-owned properties:


		Second Quarter										First Half
								Variance										Variance
		F2023			F2022			Amt.		Pct.		F2023			F2022			Amt.		Pct.
		First Quarter
		First Quarter
		First Quarter
								Variance
								Variance
								Variance
		F2024
		F2024
		F2024
Occupancy pct.
Occupancy pct.
Occupancy pct.	Occupancy pct.	68.2		%	65.3		%	2.9 pts		4.5	%	59.5		%	55.7		%	3.8 pts		6.8	%
ADR	ADR	$	187.34		$	179.33		$	8.01	4.5	%	$	173.68		$	165.40		$	8.28	5.0	%
ADR
ADR
RevPAR	RevPAR	$	127.70		$	117.07		$	10.63	9.1	%	$	103.33		$	92.13		$	11.20	12.2	%
RevPAR
RevPAR

Note: These operating statistics represent averages of our seven distinct comparable company-owned hotels and resorts, branded and unbranded, in different geographic markets with a wide range of individual hotel performance. The statistics are not necessarily representative of any particular hotel or resort. ~~The Skirvin Hilton is not included in the fiscal 2022 statistics.~~

RevPAR increased at ~~all seven~~three of our seven comparable company-owned properties during the ~~second~~first quarter ~~and first half~~ of fiscal ~~2023~~2024 compared to the ~~second~~first quarter ~~and first half~~ of fiscal ~~2022.~~2023. Group demand continued to grow during the fiscal ~~2023 second~~2024 first quarter, with weekday ~~and weekend~~ growth increasing group business as a percentage of our overall business mix. During the ~~second~~first quarter of fiscal ~~2023,~~2024, our group business represented approximately ~~40%~~34.5% of our total rooms revenue, compared to approximately ~~38%~~28.9% during the ~~second~~first quarter of fiscal ~~2022.~~2023. An increase in group business as a percentage of our overall business mix generally

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increases overall occupancy while negatively impacting ADR. Non-group pricing ~~remained strong~~generally decreased in ~~the majority~~some of our major markets during the ~~second~~first quarter of fiscal ~~2023, with leisure~~2024, due to generally lower transient travel demand ~~contributing~~and due to ~~increased ADR.~~a shift in pricing strategy as we optimized pricing to drive higher occupancy and overall RevPAR through lower daily rate offerings.

According to data received from Smith Travel Research and compiled by us in order to evaluate our fiscal ~~2023 second~~2024 first quarter ~~and first half~~ results, comparable “upper upscale” hotels—hotels identified as our industry— throughout the United States experienced an increase in RevPAR of ~~4.8%~~2.0% during our fiscal ~~2023 second~~2024 first quarter compared to the same period during fiscal ~~2022,~~2023, leading us to believe we slightly outperformed the industry during the fiscal ~~2023 second~~2024 first quarter by approximately ~~4.3~~0.1 percentage points. During the first half of fiscal 2023 compared to the first half of fiscal 2022, comparable “upper upscale” hotels experienced an increase in RevPAR of 14.4%, leading us to believe we underperformed the industry during the first half of fiscal 2023 by approximately 2.2 percentage points. We believe our underperformance during the first half of fiscal 2023 occurred because occupancy at our hotels recovered earlier in fiscal 2022, particularly in the first quarter of fiscal 2022, than the industry, which generally lagged our occupancy levels in fiscal 2022. This resulted

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~~in the industry growing occupancy at a faster rate than our owned hotels during the first half of fiscal 2023 compared to the prior year.~~

Data received from Smith Travel Research for our various “competitive sets”—hotels identified in our specific markets that we deem to be competitors to our hotels—indicates that these hotels experienced an increase in RevPAR of ~~10.1%~~0.1% during our ~~second~~first quarter, again compared to the same period in fiscal ~~2022.~~2023. Therefore, we believe we underperformed our competitive sets during the second quarter of fiscal 2023 by approximately 1.0 percentage point. We believe our underperformance to our competitive sets during the second quarter of fiscal 2023 results primarily from a customer mix shift with an increase in the percentage of group business at lower daily rates and a decrease in the percentage of leisure customers at higher daily rates. During the first half of fiscal 2023 compared to the first half of fiscal 2022, hotels in our competitive sets experienced an increase in RevPAR of 14.7%, leading us to believe we underperformedoutperformed our competitive sets during the first ~~half~~quarter of fiscal ~~2023~~2024 by approximately ~~2.5~~2.0 percentage points. We believe our ~~underperformance~~outperformance to our competitive sets during the first ~~half~~quarter of fiscal ~~2023~~2024 results primarily from ~~the unfavorable customer mix shift during the second quarter of fiscal 2023 and because occupancy at~~ our ~~hotels recovered earlier in fiscal 2022, particularly~~strong performance in the ~~first quarter of fiscal 2022, than our competitive sets, which generally lagged our~~group customer segment as well as improved revenue management and rate optimization resulting in higher occupancy ~~levels in fiscal 2022. This resulted in our competitive sets growing occupancy at a faster rate than our owned hotels during the first half of fiscal 2023~~growth compared to the ~~prior year.~~competitive sets.

Looking to future periods, overall occupancy in the U.S. is expected to continue to slowly increase. In the near term, we expect leisure travel demand to ~~normalize.~~normalize and we expect our group business to remain strong. Leisure travel in our markets has a seasonal component, peaking in the summer months and slowing down as children return to school and the weather turns ~~colder.~~colder in our primarily midwestern markets. We ~~are experiencing~~expect gradual increases in business travel as corporate training events, meetings, and conferences return and ~~downtown offices reopen.~~office occupancy increases. As of the date of this report, our group room revenue bookings for the remainder of fiscal ~~2023~~2024 - commonly referred to in the hotels and resorts industry as “group pace” - is running approximately 8%11% ahead of where we were at the same time last ~~year.~~year, excluding bookings related to the July 2024 Republican National Convention in Milwaukee. Group room revenue bookings for fiscal ~~2024~~2025 is running ~~approximately 7%~~over 60% ahead of where we were at the same time in ~~early~~ fiscal ~~2022~~2023 for fiscal ~~2023.~~2024. Banquet and catering revenue pace for fiscal ~~2023~~2024 and fiscal ~~2024~~2025 is similarly running ahead of where we were at this same time last year. We are encouraged by continuing positive trends in group bookings for the remainder of fiscal ~~2023~~2024, fiscal 2025 and beyond.

Adjusted EBITDA

Adjusted EBITDA is a measure used by management and our board of directors to assess our financial performance and enterprise value. We believe that Adjusted EBITDA is a useful measure for us and investors, as it eliminates certain expenses that are not indicative of our core operating performance and facilitates a comparison of our core operating performance on a consistent basis from period to period. We also use Adjusted EBITDA as a basis to determine certain annual cash bonuses and long-term incentive awards, to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions, and to compare our performance against that of other peer companies using similar measures. Adjusted EBITDA is also used by analysts, investors and other interested parties as a performance measure to evaluate industry competitors.

Adjusted EBITDA is a non-GAAP measure of our financial performance and should not be considered as an alternative to net earnings (loss) as a measure of financial performance, or any other performance measure derived in accordance with GAAP. Additionally, Adjusted EBITDA is not intended to be a measure of liquidity or free cash flow for management’s discretionary use. Adjusted EBITDA has its limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP.

We define Adjusted EBITDA as net earnings (loss) attributable to The Marcus Corporation before investment income or loss, interest expense, other expense, gain or loss on disposition of property, equipment and other assets, impairment charges, equity earnings or losses from unconsolidated joint ventures, net earnings or losses attributable to noncontrolling interests, income taxes, depreciation and amortization and non-cash share-based compensation expense, adjusted to eliminate the impact of certain items that we do not consider indicative of our core operating performance. These further adjustments are itemized below. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA, you should be aware that in the future we will incur expenses that are the same as or similar to some of the items eliminated in the adjustments made to determine Adjusted EBITDA, such as acquisition expenses, preopening expenses, accelerated depreciation, impairment charges and other adjustments. Our presentation of Adjusted EBITDA should not be construed to imply that our future results will be unaffected by any such adjustments. Definitions and calculations of Adjusted EBITDA differ among companies in our

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industries, and therefore Adjusted EBITDA disclosed by us may not be comparable to the measures disclosed by other companies.

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The following table sets forth Adjusted EBITDA by reportable operating segment for the ~~second~~first quarter ~~and first half~~ of fiscal ~~2023~~2024 and fiscal ~~2022~~2023 (in millions, except for variance percentage):


		Second Quarter								First Half
						Variance								Variance
		F2023		F2022		Amt.		Pct.		F2023		F2022		Amt.		Pct.
		First Quarter
		First Quarter
		First Quarter
						Variance
						Variance
						Variance
		F2024
		F2024
		F2024
Theatres
Theatres
Theatres	Theatres	$	31.3	$	28.8	$	2.5	8.7	%	$	45.1	$	33.5	$	11.5	34.4	%
Hotels and resorts	Hotels and resorts	11.3		11.8		(0.5)		(4.2)	%	10.9		14.2		(3.3)		(23.2)	%
Hotels and resorts
Hotels and resorts
Corporate items
Corporate items
Corporate items	Corporate items	(3.9)		(3.3)		(0.6)		(18.4)	%	(7.8)		(7.1)		(0.7)		(10.2)	%
Total Adjusted EBITDA	Total Adjusted EBITDA	$	38.7	$	37.3	$	1.4	3.7	%	$	48.2	$	40.7	$	7.5	18.5	%
Total Adjusted EBITDA
Total Adjusted EBITDA

The following table sets forth our reconciliation of Adjusted EBITDA (in millions):


		Second Quarter				First Half
		F2023		F2022		F2023		F2022
		First Quarter
		First Quarter
		First Quarter
		F2024
		F2024
		F2024
Net earnings (loss)
Net earnings (loss)
Net earnings (loss)	Net earnings (loss)	$	13.5	$	9.0	$	4.0	$	(5.9)
Add (deduct):	Add (deduct):
Add (deduct):
Add (deduct):
Investment (income) loss
Investment (income) loss
Investment (income) loss	Investment (income) loss	(0.4)		0.5		(0.6)		0.7
Interest expense	Interest expense	3.1		4.1		6.1		8.2
Interest expense
Interest expense
Other (income) expense
Other (income) expense
Other (income) expense	Other (income) expense	0.5		0.6		0.9		1.2
Loss (gain) on disposition of property, equipment and other assets	Loss (gain) on disposition of property, equipment and other assets	0.4		0.1		0.8		(0.4)
Equity losses from unconsolidated joint ventures		—		—		0.2		0.1
Loss (gain) on disposition of property, equipment and other assets
Loss (gain) on disposition of property, equipment and other assets
Equity (earnings) losses from unconsolidated joint ventures
Equity (earnings) losses from unconsolidated joint ventures
Equity (earnings) losses from unconsolidated joint ventures

Income tax expense (benefit)

Income tax expense (benefit)

Income tax expense (benefit)	Income tax expense (benefit)	4.1		4.8		1.3		(1.8)
Depreciation and amortization	Depreciation and amortization	16.0		16.8		31.9		34.0
Depreciation and amortization
Depreciation and amortization
Share-based compensation expenses (1)
Share-based compensation expenses (1)
Share-based compensation expenses (1)	Share-based compensation expenses (1)	1.5		1.7		3.7		4.6

Insured losses (2)

Insured losses (2)

Insured losses (2)
Total Adjusted EBITDA	Total Adjusted EBITDA	$	38.7	$	37.3	$	48.2	$	40.7
Total Adjusted EBITDA
Total Adjusted EBITDA

The following tables sets forth our reconciliation of Adjusted EBITDA by reportable operating segment (in millions):


		Second Quarter, F2023								First Half, F2023
		Theatres		Hotels & Resorts		Corp. Items		Total		Theatres		Hotels & Resorts		Corp. Items		Total
		First Quarter, F2024
		First Quarter, F2024
		First Quarter, F2024
		Theatres
		Theatres
		Theatres
Operating income (loss)
Operating income (loss)
Operating income (loss)	Operating income (loss)	$	19.8	$	6.1	$	(5.1)	$	20.8	$	21.3	$	1.1	$	(10.6)	11.8
Depreciation and amortization	Depreciation and amortization	11.3		4.6		0.1		16.0		22.8		8.9		0.2		31.9
Depreciation and amortization
Depreciation and amortization
Loss (gain) on disposition of property, equipment and other assets
Loss (gain) on disposition of property, equipment and other assets
Loss (gain) on disposition of property, equipment and other assets	Loss (gain) on disposition of property, equipment and other assets	—		0.4		—		0.4		0.3		0.5		—		0.8
Share-based compensation (1)	Share-based compensation (1)	0.1		0.2		1.1		1.5		0.6		0.5		2.6		3.7
Share-based compensation (1)
Share-based compensation (1)

Insured losses (2)

Insured losses (2)

Insured losses (2)
Total Adjusted EBITDA	Total Adjusted EBITDA	$	31.3	$	11.3	$	(3.9)	$	38.7	$	45.1	$	10.9	(7.8)		48.2
Total Adjusted EBITDA
Total Adjusted EBITDA

Second Quarter, F2022 First Half, F2022
Theatres Hotels & Resorts Corp. Items Total Theatres Hotels & Resorts Corp. Items Total
Operating loss $ 16.4 $ 6.8 $ (4.4) $ 18.9 $ 8.4 $ 3.8 $ (10.2) 2.1
Depreciation and amortization 11.9 4.8 0.1 16.8 24.1 9.8 0.2 34.0
Share-based compensation (1)
0.5 0.2 1.0 1.7 1.1 0.6 2.9 4.6
Total Adjusted EBITDA $ 28.8 $ 11.8 $ (3.3) $ 37.3 $ 33.5 $ 14.2 $ (7.1) $ 40.7

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	First Quarter, F2023
	Theatres		Hotels & Resorts		Corp. Items		Total
Operating loss	$	1.5	$	(5.0)	$	(5.5)	$	(9.0)
Depreciation and amortization	11.5		4.3		0.1		15.9
Loss (gain) on disposition of property, equipment and other assets	0.3		0.1		—		0.4
Share-based compensation (1)	0.5		0.2		1.5		2.2
Total Adjusted EBITDA	$	13.8	$	(0.4)	$	(3.9)	$	9.5

(1)Non-cash expense related to share-based compensation programs.

(2)Repair costs related to insured property damage at one theatre location that are non-operating in nature.

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LIQUIDITY AND CAPITAL RESOURCES

Liquidity

Our movie theatre and hotels and resorts businesses ~~when open and operating normally,~~ each generate significant and consistent daily amounts of cash, subject to previously-noted seasonality, because each segment’s revenue is derived predominantly from consumer cash purchases. ~~Under normal circumstances, we~~We believe that these relatively consistent and predictable cash sources, as well as the availability of unused credit lines, would be adequate to support the ongoing operational liquidity needs of our businesses.

Maintaining and protecting a strong balance sheet has always been a core value of The Marcus Corporation during our 88-year history and our financial position remains strong. As of ~~June 29, 2023,~~March 28, 2024, we had a cash balance of approximately ~~$44.6~~$17.3 million, ~~$220.6~~$220.2 million of availability under our $225 million revolving credit facility, ~~and~~ our debt-to-capitalization ratio was ~~0.28.~~0.27, and our net leverage ratio was 1.65x net debt to Adjusted EBITDA. With our strong liquidity position combined with cash generated from operations, we believe we are positioned to have sufficient liquidity to meet our obligations as they come due and to comply with our debt covenants for at least 12 months from the issuance date of the consolidated financial statements, as well as our longer-term capital requirements.

The following table sets forth our reconciliations of Net Debt and Net Leverage (Net Debt to Adjusted EBITDA) (in millions, except leverage ratio):



	March 28, 2024		December 28, 2023
Long-term debt (GAAP measure) (1)	$	169.8	$	169.9
Finance lease obligations (GAAP measure) (2)	14.7		15.3
Less: Cash and cash equivalents	(17.3)		(55.6)
Net Debt	$	167.3	$	129.6

Net Debt	$	167.3	$	129.6
LTM Adjusted EBITDA	101.6		108.7
Net Leverage (Net Debt to Adjusted EBITDA)	1.65x		1.19x

(1)Represents total long-term debt, including the current portion of long-term debt.

(2)Represents total finance lease obligations, including the current portion of finance lease obligations.

We believe Net Leverage is a useful measure, as it provides management and investors an indication of our indebtedness less unrestricted cash relative to our earnings performance.

We or our affiliates may, at any time and from time to time, seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will be upon such terms and at such prices as we may determine, and will depend

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on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material and to the extent equity is used, dilutive.

Financial Condition

Net cash ~~provided by~~used in operating activities totaled ~~$47.3~~$15.1 million during the first ~~half~~quarter of fiscal ~~2023,~~2024, compared to net cash ~~provided by~~used in operating activities of ~~$55.2~~$7.7 million during the first ~~half~~quarter of fiscal ~~2022.~~2023. The ~~$7.9~~$7.4 million increase in net cash used in operating activities was primarily due to a $2.4 million decrease in net earnings, a $4.5 million increase in deferred tax benefits, a $1.3 million increase in cash ~~provided by operating activities was due~~matching contributions to the ~~receipt of refundable income taxes of $22.7 million~~company’s retirement savings and ~~government grants of $4.3 million during the first half of fiscal 2022 that did not recur in fiscal 2023,~~profit-sharing plan, partially ~~offset~~reduced by an increase in ~~net earnings and the favorable timing in the payment of accounts payable and other working capital payments during the first half of fiscal 2023 compared to the first half of fiscal 2022.~~non-cash share-based compensation expense.

Net cash used in investing activities during the first ~~half~~quarter of fiscal ~~2023~~2024 totaled ~~$16.6~~$20.8 million, compared to net cash used in investing activities of ~~$11.5~~$9.5 million during the first ~~half~~quarter of fiscal ~~2022.~~2023. The increase in net cash used in investing activities of ~~$5.2~~$11.2 million was the result of ~~the impact~~an increase of ~~the sale~~$6.5 million in capital expenditures, a $5.6 million purchase of ~~non-core real estate assets of $4.8 million during the first half of fiscal 2022 that did not recur~~joint venture interests in ~~fiscal 2023~~The Lofton Hotel, and an increase in cash used in the purchase of trading securities and other investing activities, partially offset by a ~~decrease~~$1.5 millionsale of ~~$0.4 million~~joint venture interests in ~~capital expenditures.~~The Lofton Hotel to other minority investors. Total cash capital expenditures (including normal continuing capital maintenance and renovation projects) totaled ~~$15.9~~$15.4 million during the first ~~half~~quarter of fiscal ~~2023~~2024 compared to ~~$16.3~~$8.9 million during the first ~~half~~quarter of fiscal ~~2022.~~2023.

Fiscal ~~2023~~2024 first ~~half~~quarter cash capital expenditures included approximately ~~$6.8~~$2.8 million incurred in our theatre division, primarily related to normal maintenance capital projects. We also incurred capital expenditures in our hotels and resorts division during the first ~~half~~quarter of fiscal ~~2023~~2024 of approximately ~~$8.9~~$12.3 million, including costs related to guest room renovations at The Pfister Hotel, meeting space renovations at the Grand Geneva Resort and Spa and normal maintenance capital projects.

Net cash used in financing activities during the first ~~half~~quarter of fiscal ~~2023~~2024 totaled ~~$6.3~~$3.4 million compared to net cash ~~used in~~provided by financing activities of ~~$4.4~~$5.6 million during the first ~~half~~quarter of fiscal ~~2022.~~2023. During the first ~~half~~quarter of fiscal ~~2023,~~2024, we increased our borrowings under our revolving credit facility as needed to fund our cash needs and used excess cash to reduce our borrowings under our revolving credit facility. As short-term revolving credit facility borrowings became due, we replaced them as necessary with new short-term revolving credit facility borrowings. As a result, we added ~~$38.0~~$5.0 million of new short-term revolving credit facility borrowings, and we made ~~$38.0~~$5.0 million of repayments on short-term revolving credit facility borrowings during the first ~~half~~quarter of fiscal ~~2023~~2024 (net zero borrowings on our credit facility). We ended the ~~second~~first quarter of fiscal ~~2023~~2024 with no outstanding borrowings under our revolving credit facility. During the first ~~half~~quarter of fiscal ~~2022,~~2023, we increased our borrowings under our revolving credit facility as needed to fund our cash needs and used excess cash to reduce our borrowings under our revolving credit facility. As a result, we added ~~$22.0~~$29.0 million of new short-term revolving credit facility borrowings, and we made ~~$22.0~~$20.0 million of repayments on short-term revolving credit facility borrowings during the first ~~half~~quarter of fiscal ~~2022~~2023 (net ~~zero~~$9.0 million of borrowings on our credit facility).

Principal payments on long-term debt were approximately ~~$0.8~~$0.3 million during the first ~~half~~quarter of fiscal ~~2023~~2024 compared to payments of ~~$0.9~~$0.4 million during the first ~~half~~quarter of fiscal ~~2022.~~2023. Our debt-to-capitalization ratio (excluding our finance and operating lease obligations) was ~~0.28~~0.27 at ~~June 29, 2023,~~March 28, 2024, compared to ~~0.28~~0.26 at December ~~29, 2022.~~28, 2023.

During the first ~~half~~quarter of fiscal ~~2023~~2024 and the first ~~half~~quarter of fiscal ~~2022,~~2023, we did not repurchase any shares of our common stock in the open market. As of ~~June 29, 2023,~~March 28, 2024, approximately ~~2.5~~2.4 million shares remained available for repurchase under prior

~~Table of Contents~~

Board of Directors repurchase authorizations. Under these authorizations, we may repurchase shares of our common stock from time to time in the open market, pursuant to privately-negotiated transactions or otherwise, depending upon a number of factors, including prevailing market conditions.

Dividends paid during the first ~~half~~quarter of fiscal ~~2023~~2024 were ~~$3.1~~$2.2 million. ~~We did not make any dividend payments~~Dividends paid during the first half of fiscal 2022. Our Credit Agreement, as amended, limited the total amount of quarterly dividend payments or share repurchases during fiscal 2022 to no more than $1.55 million per quarter. Beginning with the first quarter of fiscal 2023 ~~we returned to compliance with prior financial covenants under the Credit Agreement that~~ were ~~temporarily waived (specifically, the consolidated fixed charge coverage ratio), removing any limitations on the total amount of quarterly dividends or share repurchases.~~$1.5 million. We have the ability to declare quarterly dividend payments and/or repurchase shares of our common stock in the open market as we deem appropriate.

During the first quarter of fiscal 2023, we amended the Credit Agreement by entering into the Fifth Amendment effective on February 10, 2023, which replaced the variable rate LIBOR benchmark with the secured overnight financing rate (“SOFR”). Borrowings under the Credit Agreement now generally bear interest at a variable rate equal to: (i) SOFR plus a credit spread adjustment of 0.10%, subject to a 0% floor, plus a specified margin based upon our consolidated debt to capitalization ratio as of the most recent determination date; or (ii) the base rate (which is the highest of (a) the prime rate, (b) the greater of the federal funds rate and the overnight bank funding rate plus 0.50% or (c) the sum of 1% plus one-month SOFR plus a credit spread adjustment of 0.10%), subject to a 1% floor, plus a specified margin based upon our consolidated debt to capitalization ratio as of the most recent determination date. In addition, the Credit Agreement generally requires us to pay a facility fee equal to 0.125% to 0.25% of the total revolving commitment, depending on our consolidated debt to capitalization ratio, as defined in the Credit Agreement.

Critical Accounting Policies and Estimates

We have included a summary of our Critical Accounting Policies and Estimates in our Annual Report on Form 10-K for the year ended December ~~29, 2022.~~28, 2023. There have been no material changes to the summary provided in that report.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

We have not experienced any material changes in our market risk exposures since December ~~29, 2022.~~28, 2023.

Item 4. Controls and Procedures

a.Evaluation of disclosure controls and procedures

Based on their evaluations and the evaluation of management, as of the end of the period covered by this Quarterly Report on Form 10-Q, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934 (the “Exchange Act”)) are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

b.Changes in internal control over financial reporting

There were no significant changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15 of the Exchange Act that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

2324

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PART II – OTHER INFORMATION

Item 1A. Risk Factors

There have been no material changes from the risk factors disclosed in the Company’s Annual Report on Form 10-K for the year ended December ~~29, 2022.~~28, 2023.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table sets forth information with respect to purchases made by us or on our behalf of our Common Stock during the periods indicated.

Period Total Number of
Shares
Purchased Average Price
Paid per Share Total Number of
Shares
Purchased as
Part of Publicly
Announced
Programs (1) Maximum
Number of
Shares that May
Yet be Purchased
Under the Plans
or Programs (1)
March 31 - April 27 — $ — — 2,502,788
April 28 - June 1 13,877 15.96 13,877 2,488,911
June 2 - June 29 — — — 2,488,911
Total 13,877 $ 15.74 13,877 2,488,911


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs (1)	Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs (1)
December 29 - February 1	—	$	—	—	2,428,138
February 2 - February 29	20,537	14.67		20,537	2,407,601
March 1 - March 28	—	—		—	2,407,601
Total	20,537	$	14.67	20,537	2,407,601

(1)Through ~~June 29, 2023,~~March 28, 2024, our Board of Directors had authorized the repurchase of up to approximately 11.7 million shares of our outstanding Common Stock. Under these authorizations, we may repurchase shares of our Common Stock from time to time in the open market, pursuant to privately negotiated transactions or otherwise. As of ~~June 29, 2023,~~March 28, 2024, we had repurchased approximately ~~9.2~~9.3 million shares of our Common Stock under these authorizations. The repurchased shares are held in our treasury pending potential future issuance in connection with employee benefit, option or stock ownership plans or other general corporate purposes. These authorizations do not have an expiration date. The shares purchased during the ~~second~~first quarter of ~~2022~~2024 were purchased in ~~conjunction~~connection with the ~~exercise~~vesting of grants of restricted stock ~~options pursuant~~in which we repurchased shares from the stockholders whose restricted shares vested in order to ~~the publicly announced repurchase authorization.~~cover such stockholders’ related withholding taxes.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

[During the thirteen weeks ended ~~June 29, 2023,~~March 28, 2024, no director or Section 16 officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.]

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Item 6. Exhibits



3.1		By-Laws of The Marcus Corporation, as amended. [Incorporated by reference to Exhibit 3 to our Current Report on Form 8-K dated February 21, 2024.]

10.1	~~Employee Advisory Services Agreement, dated May 23, 2023, between the Company and Stephen H. Marcus.~~The Marcus Corporation Long-Term Incentive Plan Terms, as Amended. [Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K dated ~~May 23, 2023.~~February 21, 2024.]

10.2	Form of The Marcus Corporation 2004 Equity and Incentive Awards Plan Restricted Stock Agreement for awards granted after February 21, 2024 (Employees). [Incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K dated February 21, 2024.]

10.3	Form of The Marcus Corporation 2004 Equity and Incentive Awards Plan Restricted Stock Agreement (Special Grant). [Incorporated by reference to Exhibit 10.6 to our Current Report on Form 8-K dated February 21, 2024.]

10.4	Form of The Marcus Corporation 2004 Equity and Incentive Awards Plan Performance Share Award Agreement (Executives). [Incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K dated February 21, 2024.]

10.5	Form of The Marcus Corporation 2004 Equity and Incentive Awards Plan Performance Share Award Agreement (Leadership). [Incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K dated February 21, 2024.]

10.6	Form of The Marcus Corporation 2004 Equity and Incentive Awards Plan Restricted Stock Unit Agreement for awards granted after February 21, 2024 (Employees). [Incorporated by reference to Exhibit 10.5 to our Current Report on Form 8-K dated February 21, 2024.]

31.1	Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32	Written Statement of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. §1350.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


THE MARCUS CORPORATION

DATE: ~~August~~May 2, ~~2023~~2024	By:	/s/ Gregory S. Marcus
		Gregory S. Marcus
		President and Chief Executive Officer


DATE: ~~August~~May 2, ~~2023~~2024	By:	/s/ Chad M. Paris
		Chad M. Paris
		Chief Financial Officer and Treasurer

S-1


		Page
PART I – FINANCIAL INFORMATION

Item 1.	Consolidated Financial Statements (Unaudited):

	Consolidated Balance Sheets	3

	Consolidated Statements of Earnings (Loss)	5

	Consolidated Statements of Comprehensive Income (Loss)	6

	Consolidated Statements of Cash Flows	7

	Condensed Notes to Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1415

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2324

Item 4.	Controls and Procedures	2324

PART II – OTHER INFORMATION

Item 1A.	Risk Factors	2425

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2425

Item 4.	Mine Safety Disclosures	2425

Item 5 .	Other Information	25

Item 6.	Exhibits	2526

	Signatures	S-1


	13 Weeks Ended June 29, 2023
	Theatres		Hotels/Resorts		Corporate		Total
Theatre admissions	$	68,987	$	—	$	—	$	68,987
Rooms	—		28,646		—		28,646
Theatre concessions	59,707		—		—		59,707
Food and beverage	—		18,573		—		18,573
Other revenues(1)	8,156		13,181		91		21,428
Cost reimbursements	—		9,666		—		9,666
Total revenues	$	136,850	$	70,066	$	91	$	207,007


	13 Weeks Ended June 30, 2022
	Theatres		Hotels/Resorts		Corporate		Total
Theatre admissions	$	63,087	$	—	$	—	$	63,087
Rooms	—		28,865		—		28,865
Theatre concessions	58,147		—		—		58,147
Food and beverage	—		19,014		—		19,014
Other revenues(1)	8,203		12,872		117		21,192
Cost reimbursements	—		8,250		—		8,250
Total revenues	$	129,437	$	69,001	$	117	$	198,555


	Second Quarter, F2022								First Half, F2022
	Theatres		Hotels & Resorts		Corp. Items		Total		Theatres		Hotels & Resorts		Corp. Items		Total
Operating loss	$	16.4	$	6.8	$	(4.4)	$	18.9	$	8.4	$	3.8	$	(10.2)	2.1
Depreciation and amortization	11.9		4.8		0.1		16.8		24.1		9.8		0.2		34.0
Share-based compensation (1)	0.5		0.2		1.0		1.7		1.1		0.6		2.9		4.6
Total Adjusted EBITDA	$	28.8	$	11.8	$	(3.3)	$	37.3	$	33.5	$	14.2	$	(7.1)	$	40.7