Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 26, 2020 | May 01, 2020 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 26, 2020 | |
Entity File Number | 1-12604 | |
Entity Registrant Name | MARCUS CORP | |
Entity Incorporation, State or Country Code | WI | |
Entity Tax Identification Number | 39-1139844 | |
Entity Address, Address Line One | 100 East | |
Entity Address, Address Line Two | Wisconsin Avenue | |
Entity Address, Address Line Three | SuiteĀ 1900 | |
Entity Address, City or Town | Milwaukee | |
Entity Address, State or Province | WI | |
Entity Address, Postal Zip Code | 53202-4125 | |
City Area Code | 414 | |
Local Phone Number | 905-1000 | |
Title of 12(b) Security | Common Stock, $1.00 par value | |
Trading Symbol | MCS | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0000062234 | |
Amendment Flag | false | |
Common Stock [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 23,131,830 | |
Class B Common Stock [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 7,925,254 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 26, 2020 | Dec. 26, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 126,472 | $ 20,862 |
Restricted cash | 4,795 | 4,756 |
Accounts receivable, net of reserves of $998 and $762, respectively | 14,765 | 29,465 |
Refundable income taxes | 10,438 | 5,916 |
Other current assets | 16,857 | 18,265 |
Total current assets | 173,327 | 79,264 |
Property and equipment: | ||
Land and improvements | 152,692 | 152,434 |
Buildings and improvements | 761,991 | 761,511 |
Leasehold improvements | 164,873 | 164,083 |
Furniture, fixtures and equipment | 379,759 | 377,404 |
Finance lease right-of-use assets | 74,382 | 74,357 |
Construction in progress | 8,061 | 4,043 |
Total property and equipment | 1,541,758 | 1,533,832 |
Less accumulated depreciation and amortization | 629,490 | 610,578 |
Net property and equipment | 912,268 | 923,254 |
Operating lease right-of-use assets | 244,468 | 243,855 |
Other assets: | ||
Investments in joint ventures | 3,538 | 3,595 |
Goodwill | 75,258 | 75,282 |
Other | 32,527 | 33,936 |
Total other assets | 111,323 | 112,813 |
TOTAL ASSETS | 1,441,386 | 1,359,186 |
Current liabilities: | ||
Accounts payable | 27,178 | 49,370 |
Taxes other than income taxes | 15,844 | 20,613 |
Accrued compensation | 17,098 | 18,055 |
Other accrued liabilities | 50,507 | 61,134 |
Current portion of finance lease obligations | 2,438 | 2,571 |
Current portion of operating lease obligations | 15,386 | 13,335 |
Current maturities of long-term debt | 9,977 | 9,910 |
Total current liabilities | 138,428 | 174,988 |
Finance lease obligations | 20,302 | 20,802 |
Operating lease obligations | 238,010 | 232,111 |
Long-term debt | 345,206 | 206,432 |
Deferred income taxes | 45,771 | 48,262 |
Deferred compensation and other | 55,281 | 55,133 |
Equity: | ||
Preferred Stock, $1 par; authorized 1,000,000 shares; none issued | ||
Capital in excess of par | 146,694 | 145,549 |
Retained earnings | 437,387 | 461,884 |
Accumulated other comprehensive loss | (13,195) | (12,648) |
Stockholders' Equity before Treasury Stock | 602,076 | 625,975 |
Less cost of Common Stock in treasury (133,363 shares at March 26, 2020 and 242,853 shares at December 26, 2019) | (3,563) | (4,540) |
Total shareholders' equity attributable to The Marcus Corporation | 598,513 | 621,435 |
Noncontrolling interest | (125) | 23 |
Total equity | 598,388 | 621,458 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 1,441,386 | 1,359,186 |
Common Stock [Member] | ||
Equity: | ||
Common Stock, Value | 23,264 | 23,254 |
Total equity | 23,264 | 23,254 |
Class B Common Stock [Member] | ||
Equity: | ||
Common Stock, Value | 7,926 | 7,936 |
Total equity | $ 7,926 | $ 7,936 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 26, 2020 | Dec. 26, 2019 |
Accounts receivable, reserves | $ 998 | $ 762 |
Preferred Stock, par (in dollars per share) | $ 1 | $ 1 |
Preferred Stock, authorized | 1,000,000 | 1,000,000 |
Preferred Stock, issued | 0 | 0 |
Cost of Common Stock in treasury, shares | 133,363 | 242,853 |
Common Stock [Member] | ||
Common Stock, par (in dollars per share) | $ 1 | $ 1 |
Common Stock, authorized | 50,000,000 | 50,000,000 |
Common Stock, issued | 23,264,259 | 23,253,744 |
Class B Common Stock [Member] | ||
Common Stock, par (in dollars per share) | $ 1 | $ 1 |
Common Stock, authorized | 33,000,000 | 33,000,000 |
Common Stock, issued | 7,925,254 | 7,935,769 |
Common Stock, outstanding | 7,925,254 | 7,935,769 |
Consolidated Statements of Earn
Consolidated Statements of Earnings - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 26, 2020 | Mar. 28, 2019 | ||
Revenues: | |||
Revenues | $ 150,704 | $ 161,674 | |
Cost reimbursements | 8,756 | 8,365 | |
Total revenues | 159,460 | 170,039 | |
Costs and expenses: | |||
Advertising and marketing | 5,390 | 4,910 | |
Administrative | 17,732 | 17,859 | |
Depreciation and amortization | 19,033 | 15,985 | |
Rent | 6,954 | 5,403 | |
Property taxes | 6,029 | 5,393 | |
Other operating expenses | 8,707 | 10,883 | |
Impairment charges | 8,712 | ||
Reimbursed costs | 8,756 | 8,365 | |
Total costs and expenses | 181,660 | 165,089 | |
Operating income (loss) | (22,200) | 4,950 | |
Other income (expense): | |||
Investment income (loss) | (695) | 473 | |
Interest expense | (2,516) | (3,059) | |
Other expense | (590) | (480) | |
Gain (loss) on disposition of property, equipment and other assets | (12) | 7 | |
Equity losses from unconsolidated joint ventures, net | (57) | (84) | |
Nonoperating Income (Expense), Total | (3,870) | (3,143) | |
Earnings (loss) before income taxes | (26,070) | 1,807 | |
Income taxes | (6,570) | 13 | |
Net earnings (loss) | (19,500) | 1,794 | |
Net loss attributable to noncontrolling interests | (148) | (66) | |
Net earnings (loss) attributable to The Marcus Corporation | (19,352) | 1,860 | |
Theatre admissions [Member] | |||
Revenues: | |||
Revenue from Contract with Customer, Including Assessed Tax | 55,395 | 58,969 | |
Rooms [Member] | |||
Revenues: | |||
Revenue from Contract with Customer, Including Assessed Tax | 16,989 | 18,938 | |
Costs and expenses: | |||
Cost of Goods and Services Sold | 9,655 | 9,035 | |
Theatre concessions [Member] | |||
Revenues: | |||
Revenue from Contract with Customer, Including Assessed Tax | 45,930 | 47,155 | |
Costs and expenses: | |||
Cost of Goods and Services Sold | 22,211 | 17,269 | |
Food and beverage [Member] | |||
Revenues: | |||
Revenue from Contract with Customer, Including Assessed Tax | 13,614 | 15,783 | |
Costs and expenses: | |||
Cost of Goods and Services Sold | 14,465 | 13,609 | |
Other revenues [Member] | |||
Revenues: | |||
Revenue from Contract with Customer, Including Assessed Tax | [1] | 18,776 | 20,829 |
Theatre operations | |||
Costs and expenses: | |||
Cost of Goods and Services Sold | $ 54,016 | $ 56,378 | |
Common Stock [Member] | |||
Net earnings (loss) per share - basic: | |||
Common Stock | $ (0.64) | $ 0.06 | |
Net earnings (loss) per share - diluted: | |||
Common Stock | (0.64) | 0.06 | |
Class B Common Stock [Member] | |||
Net earnings (loss) per share - basic: | |||
Common Stock | (0.58) | 0.06 | |
Net earnings (loss) per share - diluted: | |||
Common Stock | $ (0.58) | $ 0.06 | |
[1] | Included in other revenues is an immaterial amount related to rental income that is not considered revenue from contracts with customers. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2020 | Mar. 28, 2019 | |
Consolidated Statements of Comprehensive Income | ||
Net earnings (loss) | $ (19,500) | $ 1,794 |
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 of $65 and $30, respectively | 183 | 79 |
Fair market value adjustment of interest rate swaps, net of tax benefit of $288 and $142, respectively | (814) | (386) |
Reclassification adjustment on interest rate swaps included in interest expense, net of tax effect of $31 and $4, respectively | 84 | 10 |
Other comprehensive loss | (547) | (297) |
Comprehensive income (loss) | (20,047) | 1,497 |
Comprehensive loss attributable to noncontrolling interests | (148) | (66) |
Comprehensive income (loss) attributable to The Marcus Corporation | $ (19,899) | $ 1,563 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2020 | Mar. 28, 2019 | |
Consolidated Statements of Comprehensive Income | ||
Amortization of the net actuarial loss and prior service credit related to the pension, net of tax effect | $ 65 | $ 30 |
Fair market value adjustment of interest rate swap, net of tax benefit | 288 | 142 |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, Tax | $ 31 | $ 4 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2020 | Mar. 28, 2019 | |
OPERATING ACTIVITIES: | ||
Net earnings (loss) | $ (19,500) | $ 1,794 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Losses on investments in joint ventures | 57 | 84 |
Distributions from joint ventures | 200 | |
(Gain) loss on disposition of property, equipment and other assets | 12 | (7) |
Impairment charges | 8,712 | |
Depreciation and amortization | 19,033 | 15,985 |
Amortization of debt issuance costs | 49 | 71 |
Share-based compensation | 988 | 777 |
Deferred income taxes | (2,275) | (1) |
Deferred compensation and other | (348) | (16) |
Contribution of the Company's stock to savings and profit-sharing plan | 1,315 | 1,181 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 14,700 | 5,355 |
Other assets | 1,408 | (970) |
Operating leases | 2,342 | (281) |
Accounts payable | (22,047) | (3,354) |
Income taxes | (4,522) | 101 |
Taxes other than income taxes | (4,769) | (1,703) |
Accrued compensation | (957) | (2,816) |
Other accrued liabilities | (10,816) | (8,380) |
Total adjustments | 2,882 | 6,226 |
Net cash provided by (used in) operating activities | (16,618) | 8,020 |
INVESTING ACTIVITIES: | ||
Capital expenditures | (9,978) | (13,724) |
Purchase of theatres, net of cash acquired and working capital assumed | (29,626) | |
Proceeds from disposals of property, equipment and other assets | 3 | 9 |
Other investing activities | (206) | (2,745) |
Net cash used in investing activities | (10,181) | (46,086) |
Debt transactions: | ||
Proceeds from borrowings on revolving credit facility | 188,000 | 73,000 |
Repayment of borrowings on revolving credit facility | (49,000) | (38,000) |
Principal payments on long-term debt | (177) | (217) |
Debt issuance costs | (414) | |
Principal payments on finance lease obligations | (635) | (587) |
Equity transactions: | ||
Treasury stock transactions, except for stock options | (226) | (381) |
Exercise of stock options | 45 | 454 |
Dividends paid | (5,145) | (4,816) |
Distributions to noncontrolling interest | (60) | |
Net cash provided by financing activities | 132,448 | 29,393 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 105,649 | (8,673) |
Cash, cash equivalents and restricted cash at beginning of period | 25,618 | 21,927 |
Cash, cash equivalents and restricted cash at end of period | 131,267 | 13,254 |
Supplemental Information: | ||
Interest paid, net of amounts capitalized | 2,970 | 3,754 |
Income taxes (paid) refunded | (226) | 88 |
Change in accounts payable for additions to property, equipment and other assets | $ (145) | $ 1,165 |
General
General | 3 Months Ended |
Mar. 26, 2020 | |
General | |
General | 1. General Basis of Presentation Accounting Policies Depreciation and Amortization Long-Lived Assets Goodwill During the 13 weeks ended March 26, 2020, the Company determined that indicators of impairment were present and performed a quantitative test. In order to determine fair value, the Company used assumptions based on information available to it as of March 26, 2020, including both market data and forecasted future cash flows. The Company then used this information to determine fair value. The Company determined that the fair value of the Company's goodwill was greater than its carrying value. As such, no impairment was identified. Trade Name Intangible Asset Earnings (Loss) Per Share 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 computation of diluted net earnings (loss) per share of Common Stock assumes the conversion of Class B Common Stock and, as such, the undistributed earnings (losses) are equal to net earnings (loss) for that computation. The following table illustrates the computation of Common Stock and Class B Common Stock basic and diluted net earnings (loss) per share for net earnings (loss) and provides a reconciliation of the number of weighted-average basic and diluted shares outstanding: ā ā ā ā ā ā ā ā ā ā 13 Weeks Ended ā March 26, 2020 March 28, 2019 ā ā (in thousands, except per share data) Numerator: ā ā Net earnings (loss) attributable to The Marcus Corporation ā $ (19,352) ā $ 1,860 Denominator: ā ā Denominator for basic EPS ā 30,975 ā 29,883 Effect of dilutive employee stock options ā ā ā 616 Denominator for diluted EPS ā 30,975 ā 30,499 Net earnings (loss) per share - basic: ā ā Common Stock ā $ (0.64) ā $ 0.06 Class B Common Stock ā $ (0.58) ā $ 0.06 Net earnings (loss) per share - diluted: ā ā Common Stock ā $ (0.64) ā $ 0.06 Class B Common Stock ā $ (0.58) ā $ 0.06 ā For the periods when the Company reports a net loss, the computation of diluted loss per share equals the computation of basic loss per share since common stock equivalents are dilutive due to the net loss. ā Shareholdersā Equity ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Shareholdersā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Equity ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Accumulated ā ā ā ā Attributable ā ā ā ā ā ā ā ā ā ā ā Class B ā Capital ā ā ā ā Other ā ā ā ā to The ā Non- ā ā ā ā ā Common ā Common ā in Excess ā Retained ā Comprehensive ā Treasury ā Marcus ā controlling ā Total ā ā Stock ā Stock ā of Par ā Earnings ā Loss ā Stock ā Corporation ā Interests ā Equity BALANCES AT DECEMBER 26, 2019 ā $ 23,254 ā $ 7,936 ā $ 145,549 ā $ 461,884 ā $ (12,648) ā $ (4,540) ā $ 621,435 ā $ 23 ā $ 621,458 Cash Dividends: ā ā ā ā ā ā ā ā ā $.15 Class B Common Stock ā ā ā ā ā ā ā (1,224) ā ā ā ā ā (1,224) ā ā ā (1,224) $.17 Common Stock ā ā ā ā ā ā ā (3,921) ā ā ā ā ā (3,921) ā ā ā (3,921) Exercise of stock options ā ā ā ā ā 5 ā ā ā ā ā 40 ā 45 ā ā ā 45 Purchase of treasury stock ā ā ā ā ā ā ā ā ā ā ā (274) ā (274) ā ā ā (274) Savings and profit-sharing contribution ā ā ā ā ā 299 ā ā ā ā ā 1,016 ā 1,315 ā ā ā 1,315 Reissuance of treasury stock ā ā ā ā ā 2 ā ā ā ā ā 46 ā 48 ā ā ā 48 Issuance of non-vested stock ā ā ā ā ā (149) ā ā ā ā ā 149 ā ā ā ā ā ā Shared-based compensation ā ā ā ā ā 988 ā ā ā ā ā ā ā 988 ā ā ā 988 Conversions of Class B Common Stock ā 10 ā (10) ā ā ā ā ā ā ā ā ā ā ā ā ā ā Comprehensive loss ā ā ā ā ā ā ā (19,352) ā (547) ā ā ā (19,899) ā (148) ā (20,047) BALANCES AT MARCH 26, 2020 ā $ 23,264 ā $ 7,926 ā $ 146,694 ā $ 437,387 ā $ (13,195) ā $ (3,563) ā $ 598,513 ā $ (125) ā $ 598,388 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Shareholdersā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Equity ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Accumulated ā ā ā ā Attributable ā ā ā ā ā ā ā ā ā ā ā Class B ā Capital ā ā ā ā Other ā ā ā ā to The ā Non- ā ā ā ā ā Common ā Common ā in Excess ā Retained ā Comprehensive ā Treasury ā Marcus ā controlling ā Total ā ā Stock ā Stock ā of Par ā Earnings ā Loss ā Stock ā Corporation ā Interests ā Equity BALANCES AT DECEMBER 27, 2018 ā $ 22,843 ā $ 8,347 ā $ 63,830 ā $ 439,178 ā $ (6,758) ā $ (37,431) ā $ 490,009 ā $ 110 ā $ 490,119 Cash Dividends: ā ā ā ā ā ā ā ā ā $.15 Class B Common Stock ā ā ā ā ā ā ā (1,183) ā ā ā ā ā (1,183) ā ā ā (1,183) $.16 Common Stock ā ā ā ā ā ā ā (3,633) ā ā ā ā ā (3,633) ā ā ā (3,633) Exercise of stock options ā ā ā ā ā (78) ā ā ā ā ā 532 ā 454 ā ā ā 454 Purchase of treasury stock ā ā ā ā ā ā ā ā ā ā ā (428) ā (428) ā ā ā (428) Savings and profit-sharing contribution ā ā ā ā ā 810 ā ā ā ā ā 371 ā 1,181 ā ā ā 1,181 Reissuance of treasury stock ā ā ā ā ā 31 ā ā ā ā ā 16 ā 47 ā ā ā 47 Issuance of non-vested stock ā ā ā ā ā (127) ā ā ā ā ā 127 ā ā ā ā ā ā Shared-based compensation ā ā ā ā ā 777 ā ā ā ā ā ā ā 777 ā ā ā 777 Reissuance of treasury stock-acquisition ā ā ā ā ā ā ā ā 77,960 ā ā ā ā ā ā ā ā 31,237 ā ā 109,197 ā ā ā ā ā 109,197 Other ā ā ā ā ā ā ā ā (109) ā ā ā ā ā ā ā ā ā ā ā (109) ā ā ā ā ā (109) Conversions of Class B Common Stock ā 411 ā (411) ā ā ā ā ā ā ā ā ā ā ā ā ā ā Distributions to noncontrolling interest ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā (60) ā (60) Comprehensive income (loss) ā ā ā ā ā ā ā 1,860 ā (297) ā ā ā 1,563 ā (66) ā 1,497 BALANCES AT MARCH 28, 2019 ā $ 23,254 ā $ 7,936 ā $ 143,094 ā $ 436,222 ā $ (7,055) ā $ (5,576) ā $ 597,875 ā $ (16) ā $ 597,859 ā Accumulated Other Comprehensive Loss ā ā ā ā ā ā ā ā ā March 26, December 26, ā ā 2020 ā 2019 ā (in thousands) Unrecognized loss on interest rate swap agreements ā $ (1,612) ā $ (882) Net unrecognized actuarial loss for pension obligation ā (11,583) ā (11,766) ā ā $ (13,195) ā $ (12,648) ā Fair Value Measurements The Companyās assets and liabilities measured at fair value are classified in one of the following categories: Level 1 Level 2 Level 3 Defined Benefit Plan ā ā ā ā ā ā ā ā ā ā 13 Weeks Ended ā March 26, 2020 March 28, 2019 ā ā (in thousands) Service cost ā $ 274 ā $ 209 Interest cost ā 342 ā 371 Net amortization of prior service cost and actuarial loss ā 248 ā 109 Net periodic pension cost ā $ 864 ā $ 689 ā 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 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Reportable Segment ā ā ā ā Theatres Hotels/Resorts Corporate Total Theatre admissions ā $ 55,395 ā $ ā ā $ ā ā $ 55,395 Rooms ā ā ā 16,989 ā ā ā 16,989 Theatre concessions ā 45,930 ā ā ā ā ā 45,930 Food and beverage ā ā ā 13,614 ā ā ā 13,614 Other revenues (1) ā 7,703 ā 10,984 ā 89 ā 18,776 Cost reimbursements ā 183 ā 8,573 ā ā ā 8,756 Total revenues ā $ 109,211 ā $ 50,160 ā $ 89 ā $ 159,460 ā (1) Included in other revenues is an immaterial amount related to rental income that is not considered revenue from contracts with customers. ā The disaggregation of revenues by business segment for the 13 weeks ended March 28, 2019 is as follows (in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Reportable Segment ā ā ā ā Theatres Hotels/Resorts Corporate Total Theatre admissions ā $ 58,969 ā $ ā ā $ ā ā $ 58,969 Rooms ā ā ā 18,938 ā ā ā 18,938 Theatre concessions ā 47,155 ā ā ā ā ā 47,155 Food and beverage ā ā ā 15,783 ā ā ā 15,783 Other revenues (1) ā 8,569 ā 12,167 ā 93 ā 20,829 Cost reimbursements ā 192 ā 8,173 ā ā ā 8,365 Total revenues ā $ 114,885 ā $ 55,061 ā $ 93 ā $ 170,039 ā (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 $37,108,000 and $43,200,000 as of March 26, 2020 and December 26, 2019, respectively. The Company had no contract assets as of March 26, 2020 and December 26, 2019. During the 13 weeks ended March 26, 2020, the Company recognized revenue of $11,240,000 that was included in deferred revenues as of December 26, 2019. The majority of the Companyās deferred revenue relates to non-redeemed gift cards, advanced ticket sales and the Companyās loyalty program. The decrease in deferred revenue from December 26, 2019 to March 26, 2020 was due to theatre gift card redemptions and advanced movie ticket redemptions during the 13 weeks ended March 26, 2020. As of March 26, 2020, the amount of transaction price allocated to the remaining performance obligations under the Companyās advanced ticket sales was $4,709,000 and is reflected in the Companyās consolidated balance sheet as part of deferred revenues, which is included in other accrued liabilities. The Company recognizes revenue as the tickets are redeemed, which is expected to occur within the next two years. As of March 26, 2020, the amount of transaction price allocated to the remaining performance obligations related to the amount of Hotels and Resorts non-redeemed gift cards was $2,667,000 and is reflected in the Companyās 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 Companyās revenue is recognized in less than one year from the original contract. New Accounting Pronouncements CompensationāRetirement BenefitsāDefined Benefit PlansāGeneral, On December 27, 2019, the Company adopted ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment, On December 27, 2019, the Company adopted ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure FrameworkāChanges to the Disclosure Requirements for Fair Value Measurement. In December 2019, the Financial Accounting Standards Board (FASB) issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Incomes Taxes. ā In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. |
Impact of COVID-19 Pandemic
Impact of COVID-19 Pandemic | 3 Months Ended |
Mar. 26, 2020 | |
Impact of COVID-19 Pandemic | |
Impact of COVID-19 Pandemic | 2. Impact of COVID-19 Pandemic The recent outbreak of the COVID-19 pandemic has had an unprecedented impact on the world and both of the Companyās business segments. The situation continues to be volatile and the social and economic effects are widespread. As an operator of movie theatres, hotels and resorts, restaurants and bars, each of which consists of spaces where customers and guests gather in close proximity, the Companyās businesses are significantly impacted by protective actions that federal, state and local governments have taken to control the spread of the pandemic. These actions include, among other things, declaring national and state emergencies, encouraging social distancing, restricting freedom of movement, mandating non-essential business closures and issuing shelter-in-place, quarantine and stay-at-home orders. As a result of these measures, the Company temporarily closed all of its theatres on March 17, 2020, and it currently is not generating any revenues from its theatre operations (other than some limited online sales and curbside sales of popcorn, pizza and other assorted food and beverage items). The Company also temporarily closed all of its hotel division restaurants and bars at approximately the same time and closed five of its eight company-owned hotels and resorts on March 24, 2020 due to a significant reduction in occupancy at those hotels. The Company announced the closing of its remaining three company-owned hotels on April 8, 2020. The Company currently is not generating any revenues from its hotels and resorts operations. Since the COVID-19 crisis began, the Company has been working proactively to preserve cash and ensure sufficient liquidity to withstand the impacts of the COVID-19 pandemic and ultimately emerge in a continued position of strength. In addition to obtaining additional financing and modifying previously existing debt covenants (see Note 5), additional measures the Company has already taken and intend to take in the future to enhance liquidity include: ā Discontinuing all non-essential operating and capital expenditures; ā Temporarily laying off the majority of its hourly theatre and hotel associates, in addition to temporarily reducing property management and corporate office staff levels; ā Temporarily reducing the salary of the Companyās chairman and president and chief executive officer by 50%, as well as reducing the salary of all other executives and remaining divisional/corporate staff; ā Temporarily eliminating all board of directors cash compensation; ā Temporarily suspending quarterly dividend payments; ā Actively working with landlords and major suppliers to modify the timing and terms of certain contractual payments; ā Evaluating the provisions of the CARES Act and utilizing the benefits, relief and resources under those provisions as appropriate (See Note 7); and ā Evaluating the provisions of any subsequent federal or state legislation enacted as a response to the COVID-19 pandemic. ā The Amendment (see Note 5) allows the Company to consider additional borrowings from governmental authorities under provisions of the CARES Act or any other subsequent governmental actions that it could avail itself of if it deemed it necessary and appropriate. Although the Company intends to seek any available potential benefits under the CARES Act, it cannot predict the manner in which such benefits will be allocated or administered, and it cannot assure shareholders that it will be able to access such benefits in a timely manner or at all. ā The timing for when the Companyās theatres and hotels will reopen is uncertain as of the date of this report. The majority of the Companyās theatres are currently required to be closed under various state and local governmental restrictions, and the Company will continue to monitor and follow those restrictions until lifted. The Company is encouraged by recent federal guidance for a phased reopening of the U.S. economy that included the reopening of movie theatres in phase one, albeit under strict social distancing guidelines. Prior to closing our theatres, the Company had announced a social distancing seating plan that effectively reduced each theatre auditoriumās capacity by 50%. Current expectation is that, when theatres do reopen, they will open to similar capacity limitations. When the Company closed its hotels, it was not because of any governmental requirements to close. The restaurants and bars within the Companyās hotels were required to close, but the hotels themselves were considered āessential businessesā under most definitions. The hotels closed due to a significant drop in demand that made it financially prudent for them to close rather than stay open. As a result, the timing of reopening the Companyās hotels and resorts will likely be driven by an increase in demand, as individual and business travelers begin to travel more freely once again. ā The COVID-19 pandemic and the resulting impact on the Company's operating performance has affected, and may continue to affect, the estimates and assumptions made by management. Such estimates and assumptions include, among other things, the Company's goodwill and long-lived asset valuations and the measurement of compensation costs for annual and long-term incentive plans. Events and changes in circumstances arising after March 26, 2020, including those resulting from the impacts of COVID-19, will be reflected in management's estimates for future periods. ā The Company believes that the actions that have been taken will allow it to have sufficient liquidity to meet its obligations as they come due and to comply with its debt covenants for at least 12 months from the issuance date of these consolidated financial statements. However, future compliance with the Company's financial debt covenants (see Note 5) could be impacted if the Company is unable to resume its operations as currently expected. |
Impairment Charges
Impairment Charges | 3 Months Ended |
Mar. 26, 2020 | |
Impairment Charges | |
Impairment Charges | 3. Impairment Charges During the 13 weeks ended March 26, 2020, the Company determined that indicators of impairment were evident at all asset groups. For certain theatre asset groups, the sum of the estimated undiscounted future cash flows attributable to these assets was less than their carrying amount. The Company evaluated the fair value of these assets, consisting primarily of leasehold improvements, furniture, fixtures and equipment, and operating lease right-of-use assets less lease obligations, and determined that the fair value, measured using Level 3 pricing inputs (using estimated discounted cash flows over the life of the primary asset, including estimated sale proceeds) was less than their carrying values and recorded a $6,512,000 impairment loss. The fair value of the impaired assets was $13,686,000 as of March 26, 2020. During the 13 weeks ended March 26, 2020, the Company determined that indicators of impairment were evident related to its trade name intangible asset. The Company estimated the fair value of its trade name intangible asset as of March 26, 2020 using an income approach, specifically the relief from royalty method, which uses certain assumptions that are Level 3 pricing inputs, including future revenues attributable to the trade name, a royalty rate (1.0% as of March 26, 2020) and a discount rate (17.0% as of March 26, 2020). The Company determined that the fair value of the asset was less than the carrying value and recorded a $2,200,000 impairment loss. The fair value of the trade name intangible asset was $7,300,000 as of March 26, 2020. |
Acquisition
Acquisition | 3 Months Ended |
Mar. 26, 2020 | |
Acquisition | |
Acquisition | 4. Acquisition On February 1, 2019, the Company acquired 22 dine-in theatres with 208 screens located in nine Southern and Eastern states from VSS-Southern Theatres LLC (Movie Tavern) for a total purchase price of $139,310,000, consisting of $30,000,000 in cash, subject to certain adjustments, and 2,450,000 shares of the Companyās Common Stock with a value of $109,197,000, based on the Companyās closing share price as of January 31, 2019. During the 13 weeks ended March 28, 2019, the Company incurred acquisition costs as a result of the Movie Tavern acquisition of approximately $1,153,000 which were expensed as incurred and included in administrative expense in the consolidated statement of earnings. The purchase price allocation was finalized in fiscal 2019 using Level 3 pricing inputs and is reflected in the consolidated balance sheets for the periods presented. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 26, 2020 | |
Long-Term Debt | |
Long-Term Debt | 5. Long-Term Debt Long-term debt is summarized as follows: ā ā ā ā ā ā ā ā March 26, 2020 December 26, 2019 ā ā (in thousands, except payment data) Mortgage notes ā $ 24,482 ā $ 24,571 Senior notes ā 109,000 ā 109,000 Unsecured term note due February 2025, with monthly principal and interest payments of $39,110, bearing interest at 5.75% ā 2,006 ā 2,093 Revolving credit agreement ā 220,000 ā 81,000 Debt issuance costs ā (305) ā (322) ā ā 355,183 ā 216,342 Less current maturities, net of issuance costs ā 9,977 ā 9,910 ā ā $ 345,206 ā $ 206,432 ā First Amendment to Credit Agreement During the 13 weeks ended March 26, 2020, the Company replaced its then-existing Credit Agreement (the Credit Agreement) with a new five-year $225,000,000 credit facility that expires in January 2025. On April 29, 2020, the Company entered into the First Amendment to Credit Agreement (the Amendment) among the Company and several banks, amending its existing Credit Agreement dated January 9, 2020. The Amendment provides a new $90,800,000 364-day Senior Term Loan A (the Term Loan A). The Company used the proceeds from the Term Loan A to pay down borrowings under the Credit Agreement, to pay costs and expenses related to the Amendment and for general corporate purposes. Borrowings under the Credit Agreement bear interest at a variable rate equal to: (i) LIBOR, subject to a 1% floor, plus a specified margin; 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 l% plus one-month LIBOR plus a specified margin based upon the Company's consolidated debt to capitalization ratio as of the most recent determination date). Pursuant to the Amendment, as of April 29, 2020: (A) in respect of revolving loans, (1) the Company is charged a facility fee equal to 0.40% of the total revolving credit facility commitment and (2) the specified margin is 2.1% for LIBOR borrowings and 1.1% for ABR borrowings, which specified margin will remain in effect until the end of the first fiscal quarter ending after the end of any period in which any portion of the term loan facility remains outstanding or the testing of any financial covenant in the Credit Agreement is suspended (the "Specified Period"); and (B) in respect of term loans, the specified margin is 2.5% for LIBOR borrowings and 1.5% for ABR borrowings, in each case, at all times. The Amendment also amends the Credit Agreement to modify various restrictions and covenants applicable to the Company. Among other modifications, the Amendment amends the Credit Agreement to include restrictions on the ability of the Company to incur additional indebtedness, pay dividends and other distributions, and make voluntary prepayments on or defeasance of the Company's 4.02% Senior Notes due August 2025 and 4.32% Senior Notes due February 2027. Further, the Amendment amends the Credit Agreement to: (i) suspend testing of the minimum consolidated fixed charge coverage ratio of 3.0 to 1.0 until the earlier to occur of (a) September 2021 and (b) the last day of the Company's fiscal quarter in which the Company provides notice to the administrative agent that the Company is reinstating the testing of such ratio; (ii) add a covenant requiring the Company's consolidated EBITDA to be greater than (a) negative $57 million as of June 25, 2020 for the fiscal quarter then ending, (b) negative $90 million as of September 24, 2020 for the two consecutive fiscal quarters then ending, (c) negative $65 million as of December 31, 2020 for the three consecutive fiscal quarters then ending, (d) negative $40 million as of April 1, 2021 for the four consecutive fiscal quarters then ending, and (e) $42 million as of July 1, 2021 for the four consecutive fiscal quarters then ending; (iii) add a covenant requiring the Company's consolidated liquidity to be greater than (a) $102 million as of June 25, 2020, (b) $67 million as of September 24, 2020, (c) $78.5 million as of December 31, 2020, (d) $83 million as of April 1, 2021, and (e) $103.5 million as of July 1, 2021, which minimum liquidity amounts will be reduced by $50 million for each such testing date if the term loans are paid in full as of such date; and (iv) add a covenant prohibiting the Company from incurring or making capital expenditures (a) during the period from April 1, 2020 through December 31, 2020, in excess of $22.5 million plus certain adjustments, or (b) during the Company's 2021 fiscal year, in excess of $50 million plus certain adjustments. Pursuant to the Amendment, the Company is required to apply net cash proceeds received from certain events, including certain asset dispositions, casualty losses, condemnations, equity issuances, capital contributions, and the incurrence of certain debt, to prepay outstanding term loans. In addition, if, at any time during the Specified Period the Company's aggregate unrestricted cash on hand exceeds $125 million, the Amendment requires the Company to prepay revolving loans under the Credit Agreement by the amount of such excess, without a corresponding reduction in the revolving commitments under the Credit Agreement. In connection with the Amendment: (i) the Company pledged, subject to certain exceptions, security interests and liens in and on (a) substantially all of their respective personal property assets and (b) certain of their respective real property assets, in each case, to secure the Credit Agreement and related obligations; and (ii) certain subsidiaries of the Company 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 Amendment). 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. Except as amended by the Amendment, the remaining terms of the Credit Agreement remain in full force and effect. First Amendment to Note Purchase Agreements The $109,000,000 of senior notes include a $9,000,000 Note Purchase Agreement, dated April 17, 2018, that was paid off on April 17, 2020. The remaining $100,000,000 of senior notes consist of two Purchase Agreements maturing in 2021 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%. On April 29, 2020, the Company and certain purchasers entered into amendments (the ''Note Amendments") to the Note Purchase Agreement, dated June 27, 2013, and the Note Purchase Agreement, dated December 21, 2016 (collectively, the "Note Purchase Agreements"). The Note Amendments amend certain covenants and other terms of the Note Purchase Agreements and are identical to the amended covenants that are referenced in the Amendment section above. Additionally, from April 29, 2020 until the last day of the first fiscal quarter ending after the Collateral Release Date (as defined in the Note Amendments), the Company is required to pay a fee to each Note holder in an amount equal to 0.725% of the aggregate principal amount of Notes held by such holder. Such fee is payable quarterly (0.18125% of the aggregate principal amount of the Notes per quarter) commencing with the fiscal quarter ending June 25, 2020. In connection with the Note Amendments: (i) the Company has pledged, subject to certain exceptions, security interests and liens in and on (a) substantially all of their respective personal property assets and (b) certain of their respective real property assets, in each case, to secure the Notes and related obligations; and (ii) certain subsidiaries of the Company have guaranteed the Company's obligations under the Note Purchase Agreements and the Notes. The foregoing security interests, liens and guaranties will remain in effect until the Collateral Release Date. The Note Purchase Agreements contain customary events of default. If an event of default under the Note Purchase Agreements occurs and is continuing, then, among other things, all Notes then outstanding become immediately due and payable and the Note holders may exercise their rights and remedies against the pledged collateral. Derivatives The Company utilizes derivatives principally to manage market risks and reduce its exposure resulting from fluctuations in interest rates. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objectives and strategies for undertaking various hedge transactions. The Company entered into two interest rate swap agreements on March 1, 2018 covering $50,000,000 of floating rate debt. The first agreement has a notional amount of $25,000,000, expires March 1, 2021, and requires the Company to pay interest at a defined rate of 2.559% while receiving interest at a defined variable rate of one-month LIBOR (1.625% at March 26, 2020). The second agreement has a notional amount of $25,000,000, expires March 1, 2023, and requires the Company to pay interest at a defined rate of 2.687% while receiving interest at a defined variable rate of one-month LIBOR (1.625% at March 26, 2020). The Company recognizes derivatives as either assets or liabilities on the consolidated balance sheets at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and on the type of hedging relationship. Derivatives that do not qualify for hedge accounting must be adjusted to fair value through earnings. For derivatives that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of accumulated other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The Companyās interest rate swap agreements are considered effective and qualify as cash flow hedges. The Company assesses, both at the inception of each hedge and on an on-going basis, whether the derivatives that are used in its hedging transactions are highly effective in offsetting changes in cash flows of the hedged items. As of March 26, 2020, the interest rate swaps were considered highly effective. The fair value of the interest rate swaps on March 26, 2020 was a liability of $2,181,000, of which, $514,000 is included in other accrued liabilities and $1,667,000 is included in deferred compensation and other in the consolidated balance sheet. The fair value of the interest rate swap on December 26, 2019, was a liability of $1,194,000 and was included in deferred compensation and other in the consolidated balance sheet. The Company does not expect the interest rate swaps to have a material effect on earnings within the next 12 months. |
Leases
Leases | 3 Months Ended |
Mar. 26, 2020 | |
Leases | |
Leases | 6. 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 No. 2016-02, Leases (Topic 842) The majority of the Companyās 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 as they occur. Variable lease payments that do not depend on an index or rate, including those that depend on the Companyās 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. ā Total lease cost consists of the following: ā ā ā ā ā ā ā ā ā ā 13 Weeks ā ā ā ā Ended Lease Cost Classification March 26, 2020 ā ā ā ā (in thousands) Finance lease costs: ā Amortization of finance lease assets Depreciation and amortization ā $ 711 Interest on lease liabilities Interest expense ā 269 ā ā ā $ 980 Operating lease costs: ā ā ā ā ā Operating lease costs ā Rent expense ā $ 6,667 Variable lease cost Rent expense ā 227 Short-term lease cost Rent expense ā 60 ā ā $ 6,954 ā Additional Information related to leases is as follows: ā ā ā ā ā ā 13 Weeks ā ā Ended Other Information ā March 26, 2020 ā ā (in thousands) Cash paid for amounts included in the measurement of lease liabilities: ā Financing cash flows from finance leases ā $ 635 Operating cash flows from finance leases ā 269 Operating cash flows from operating leases ā 4,644 ā ā Right of use assets obtained in exchange for new lease obligations: ā Finance lease liabilities ā 25 Operating lease liabilities ā 9,630 ā ā ā ā ā ā ā March 26, 2020 ā ā (in thousands) Finance leases: ā Property and equipment ā gross ā $ 74,382 Accumulated depreciation and amortization ā (53,631) Property and equipment - net ā $ 20,751 ā ā Remaining lease terms and discount rates are as follows: ā ā ā ā ā Lease Term and Discount Rate March 26, 2020 Weighted-average remaining lease terms: ā Finance leases 10 years Operating leases 15 years ā ā Weighted-average discount rates: ā Finance leases 4.67 % Operating leases 4.54 % ā As of March 26, 2020, the Company had a build-to-suit lease arrangement in which the Company is responsible for the construction of a new leased theatre and for paying construction costs during development. Construction costs will be reimbursed by the landlord up to an agreed upon amount. During construction, the Company is deemed to not have control of the assets or the leased premises and has recorded the development expenditures in other assets on the consolidated balance sheet. The project is currently on hold due to the COVID-19 pandemic, so a completion date is not known at this time. Subsequent to March 26, 2020, the Company began actively working with landlords to discuss changes to the timing of lease payments and contract terms of leases due to the COVID-19 pandemic. The lease terms are being negotiated on a lease by lease basis with individual landlords. In conjunction with these lease discussions, the Company anticipates electing the policy election to account for lease concessions as if they were made under the enforceable rights included in the original agreement and are thus outside of the modification framework. Therefore, in making this election, the Company will not need to perform a lease-by-lease analysis to evaluate the enforceable rights and will instead simply treat the change as if the enforceable rights were included or excluded in the original agreement. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 26, 2020 | |
Income Taxes | |
Income Taxes | 7. Income Taxes The Companyās effective income tax rate, adjusted for losses from noncontrolling interests, for the 13 weeks ended March 26, 2020 and March 28, 2019 was 25.3% and 0.7%, respectively. The Companyās effective income tax rate during the 13 weeks ended March 28, 2019 was reduced by excess tax benefits on share-based compensation. The Company does not include the income tax expense or benefit related to the net earnings or loss attributable to noncontrolling interests in its income tax expense as the entity is considered a pass-through entity and, as such, the income tax expense or benefit is attributable to its owners. The Company has evaluated the provisions of the Coronavirus Aid, Relief, and Economic Security Act of 2020 (the CARES Act) that was signed subsequent to March 26, 2020. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer-side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. Based upon a preliminary review of these provisions, the Company believes it will be eligible for an income tax refund in the $15-25 million range in fiscal 2020 related to new rules for qualified improvement property expenditures and net operating loss carrybacks. The Company would also be able to apply any tax loss incurred in fiscal 2020 to prior year income for what may be a significant refund in fiscal 2021 when the Companyās fiscal 2020 tax return is filed. |
Business Segment Information
Business Segment Information | 3 Months Ended |
Mar. 26, 2020 | |
Business Segment Information | |
Business Segment Information | 8. Business Segment Information The Companyās 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. Following is a summary of business segment information for the 13 weeks ended March 26, 2020 and March 28, 2019 (in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā 13 Weeks Ended ā ā Hotels/ Corporate ā ā March 26, 2020 ā Theatres ā Resorts ā Items ā Total Revenues ā $ 109,211 ā $ 50,160 ā $ 89 ā $ 159,460 Operating income (loss) ā (7,083) ā (10,853) ā (4,264) ā (22,200) Depreciation and amortization ā 13,510 ā 5,412 ā 111 ā 19,033 ā ā ā ā ā ā ā ā ā ā ā ā ā ā 13 Weeks Ended ā ā Hotels/ Corporate ā ā March 28, 2019 ā Theatres ā Resorts ā Items ā Total Revenues ā $ 114,885 ā $ 55,061 ā $ 93 ā $ 170,039 Operating income (loss) ā 12,594 ā (3,153) ā (4,491) ā 4,950 Depreciation and amortization ā 11,127 ā 4,767 ā 91 ā 15,985 ā |
General (Policies)
General (Policies) | 3 Months Ended |
Mar. 26, 2020 | |
General | |
Description of Business | Basis of Presentation |
Accounting Policies | Accounting Policies |
Depreciation and Amortization | Depreciation and Amortization |
Long-Lived Assets | Long-Lived Assets |
Goodwill | Goodwill During the 13 weeks ended March 26, 2020, the Company determined that indicators of impairment were present and performed a quantitative test. In order to determine fair value, the Company used assumptions based on information available to it as of March 26, 2020, including both market data and forecasted future cash flows. The Company then used this information to determine fair value. The Company determined that the fair value of the Company's goodwill was greater than its carrying value. As such, no impairment was identified. |
Trade Name Intangible Asset | Trade Name Intangible Asset |
Earnings Per Share | Earnings (Loss) Per Share 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 computation of diluted net earnings (loss) per share of Common Stock assumes the conversion of Class B Common Stock and, as such, the undistributed earnings (losses) are equal to net earnings (loss) for that computation. The following table illustrates the computation of Common Stock and Class B Common Stock basic and diluted net earnings (loss) per share for net earnings (loss) and provides a reconciliation of the number of weighted-average basic and diluted shares outstanding: ā ā ā ā ā ā ā ā ā ā 13 Weeks Ended ā March 26, 2020 March 28, 2019 ā ā (in thousands, except per share data) Numerator: ā ā Net earnings (loss) attributable to The Marcus Corporation ā $ (19,352) ā $ 1,860 Denominator: ā ā Denominator for basic EPS ā 30,975 ā 29,883 Effect of dilutive employee stock options ā ā ā 616 Denominator for diluted EPS ā 30,975 ā 30,499 Net earnings (loss) per share - basic: ā ā Common Stock ā $ (0.64) ā $ 0.06 Class B Common Stock ā $ (0.58) ā $ 0.06 Net earnings (loss) per share - diluted: ā ā Common Stock ā $ (0.64) ā $ 0.06 Class B Common Stock ā $ (0.58) ā $ 0.06 |
Shareholders' Equity | Shareholdersā Equity ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Shareholdersā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Equity ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Accumulated ā ā ā ā Attributable ā ā ā ā ā ā ā ā ā ā ā Class B ā Capital ā ā ā ā Other ā ā ā ā to The ā Non- ā ā ā ā ā Common ā Common ā in Excess ā Retained ā Comprehensive ā Treasury ā Marcus ā controlling ā Total ā ā Stock ā Stock ā of Par ā Earnings ā Loss ā Stock ā Corporation ā Interests ā Equity BALANCES AT DECEMBER 26, 2019 ā $ 23,254 ā $ 7,936 ā $ 145,549 ā $ 461,884 ā $ (12,648) ā $ (4,540) ā $ 621,435 ā $ 23 ā $ 621,458 Cash Dividends: ā ā ā ā ā ā ā ā ā $.15 Class B Common Stock ā ā ā ā ā ā ā (1,224) ā ā ā ā ā (1,224) ā ā ā (1,224) $.17 Common Stock ā ā ā ā ā ā ā (3,921) ā ā ā ā ā (3,921) ā ā ā (3,921) Exercise of stock options ā ā ā ā ā 5 ā ā ā ā ā 40 ā 45 ā ā ā 45 Purchase of treasury stock ā ā ā ā ā ā ā ā ā ā ā (274) ā (274) ā ā ā (274) Savings and profit-sharing contribution ā ā ā ā ā 299 ā ā ā ā ā 1,016 ā 1,315 ā ā ā 1,315 Reissuance of treasury stock ā ā ā ā ā 2 ā ā ā ā ā 46 ā 48 ā ā ā 48 Issuance of non-vested stock ā ā ā ā ā (149) ā ā ā ā ā 149 ā ā ā ā ā ā Shared-based compensation ā ā ā ā ā 988 ā ā ā ā ā ā ā 988 ā ā ā 988 Conversions of Class B Common Stock ā 10 ā (10) ā ā ā ā ā ā ā ā ā ā ā ā ā ā Comprehensive loss ā ā ā ā ā ā ā (19,352) ā (547) ā ā ā (19,899) ā (148) ā (20,047) BALANCES AT MARCH 26, 2020 ā $ 23,264 ā $ 7,926 ā $ 146,694 ā $ 437,387 ā $ (13,195) ā $ (3,563) ā $ 598,513 ā $ (125) ā $ 598,388 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Shareholdersā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Equity ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Accumulated ā ā ā ā Attributable ā ā ā ā ā ā ā ā ā ā ā Class B ā Capital ā ā ā ā Other ā ā ā ā to The ā Non- ā ā ā ā ā Common ā Common ā in Excess ā Retained ā Comprehensive ā Treasury ā Marcus ā controlling ā Total ā ā Stock ā Stock ā of Par ā Earnings ā Loss ā Stock ā Corporation ā Interests ā Equity BALANCES AT DECEMBER 27, 2018 ā $ 22,843 ā $ 8,347 ā $ 63,830 ā $ 439,178 ā $ (6,758) ā $ (37,431) ā $ 490,009 ā $ 110 ā $ 490,119 Cash Dividends: ā ā ā ā ā ā ā ā ā $.15 Class B Common Stock ā ā ā ā ā ā ā (1,183) ā ā ā ā ā (1,183) ā ā ā (1,183) $.16 Common Stock ā ā ā ā ā ā ā (3,633) ā ā ā ā ā (3,633) ā ā ā (3,633) Exercise of stock options ā ā ā ā ā (78) ā ā ā ā ā 532 ā 454 ā ā ā 454 Purchase of treasury stock ā ā ā ā ā ā ā ā ā ā ā (428) ā (428) ā ā ā (428) Savings and profit-sharing contribution ā ā ā ā ā 810 ā ā ā ā ā 371 ā 1,181 ā ā ā 1,181 Reissuance of treasury stock ā ā ā ā ā 31 ā ā ā ā ā 16 ā 47 ā ā ā 47 Issuance of non-vested stock ā ā ā ā ā (127) ā ā ā ā ā 127 ā ā ā ā ā ā Shared-based compensation ā ā ā ā ā 777 ā ā ā ā ā ā ā 777 ā ā ā 777 Reissuance of treasury stock-acquisition ā ā ā ā ā ā ā ā 77,960 ā ā ā ā ā ā ā ā 31,237 ā ā 109,197 ā ā ā ā ā 109,197 Other ā ā ā ā ā ā ā ā (109) ā ā ā ā ā ā ā ā ā ā ā (109) ā ā ā ā ā (109) Conversions of Class B Common Stock ā 411 ā (411) ā ā ā ā ā ā ā ā ā ā ā ā ā ā Distributions to noncontrolling interest ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā (60) ā (60) Comprehensive income (loss) ā ā ā ā ā ā ā 1,860 ā (297) ā ā ā 1,563 ā (66) ā 1,497 BALANCES AT MARCH 28, 2019 ā $ 23,254 ā $ 7,936 ā $ 143,094 ā $ 436,222 ā $ (7,055) ā $ (5,576) ā $ 597,875 ā $ (16) ā $ 597,859 |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss ā ā ā ā ā ā ā ā ā March 26, December 26, ā ā 2020 ā 2019 ā (in thousands) Unrecognized loss on interest rate swap agreements ā $ (1,612) ā $ (882) Net unrecognized actuarial loss for pension obligation ā (11,583) ā (11,766) ā ā $ (13,195) ā $ (12,648) |
Fair Value Measurements | Fair Value Measurements The Companyās assets and liabilities measured at fair value are classified in one of the following categories: Level 1 Level 2 Level 3 |
Defined Benefit Plan | Defined Benefit Plan ā ā ā ā ā ā ā ā ā ā 13 Weeks Ended ā March 26, 2020 March 28, 2019 ā ā (in thousands) Service cost ā $ 274 ā $ 209 Interest cost ā 342 ā 371 Net amortization of prior service cost and actuarial loss ā 248 ā 109 Net periodic pension cost ā $ 864 ā $ 689 ā 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 | Revenue Recognition ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Reportable Segment ā ā ā ā Theatres Hotels/Resorts Corporate Total Theatre admissions ā $ 55,395 ā $ ā ā $ ā ā $ 55,395 Rooms ā ā ā 16,989 ā ā ā 16,989 Theatre concessions ā 45,930 ā ā ā ā ā 45,930 Food and beverage ā ā ā 13,614 ā ā ā 13,614 Other revenues (1) ā 7,703 ā 10,984 ā 89 ā 18,776 Cost reimbursements ā 183 ā 8,573 ā ā ā 8,756 Total revenues ā $ 109,211 ā $ 50,160 ā $ 89 ā $ 159,460 ā (1) Included in other revenues is an immaterial amount related to rental income that is not considered revenue from contracts with customers. ā The disaggregation of revenues by business segment for the 13 weeks ended March 28, 2019 is as follows (in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Reportable Segment ā ā ā ā Theatres Hotels/Resorts Corporate Total Theatre admissions ā $ 58,969 ā $ ā ā $ ā ā $ 58,969 Rooms ā ā ā 18,938 ā ā ā 18,938 Theatre concessions ā 47,155 ā ā ā ā ā 47,155 Food and beverage ā ā ā 15,783 ā ā ā 15,783 Other revenues (1) ā 8,569 ā 12,167 ā 93 ā 20,829 Cost reimbursements ā 192 ā 8,173 ā ā ā 8,365 Total revenues ā $ 114,885 ā $ 55,061 ā $ 93 ā $ 170,039 ā (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 $37,108,000 and $43,200,000 as of March 26, 2020 and December 26, 2019, respectively. The Company had no contract assets as of March 26, 2020 and December 26, 2019. During the 13 weeks ended March 26, 2020, the Company recognized revenue of $11,240,000 that was included in deferred revenues as of December 26, 2019. The majority of the Companyās deferred revenue relates to non-redeemed gift cards, advanced ticket sales and the Companyās loyalty program. The decrease in deferred revenue from December 26, 2019 to March 26, 2020 was due to theatre gift card redemptions and advanced movie ticket redemptions during the 13 weeks ended March 26, 2020. As of March 26, 2020, the amount of transaction price allocated to the remaining performance obligations under the Companyās advanced ticket sales was $4,709,000 and is reflected in the Companyās consolidated balance sheet as part of deferred revenues, which is included in other accrued liabilities. The Company recognizes revenue as the tickets are redeemed, which is expected to occur within the next two years. As of March 26, 2020, the amount of transaction price allocated to the remaining performance obligations related to the amount of Hotels and Resorts non-redeemed gift cards was $2,667,000 and is reflected in the Companyās 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 Companyās revenue is recognized in less than one year from the original contract. |
New Accounting Pronouncements | New Accounting Pronouncements CompensationāRetirement BenefitsāDefined Benefit PlansāGeneral, On December 27, 2019, the Company adopted ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment, On December 27, 2019, the Company adopted ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure FrameworkāChanges to the Disclosure Requirements for Fair Value Measurement. In December 2019, the Financial Accounting Standards Board (FASB) issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Incomes Taxes. ā In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. |
General (Tables)
General (Tables) | 3 Months Ended |
Mar. 26, 2020 | |
General | |
Schedule of Earnings Per Share, Basic and Diluted | The following table illustrates the computation of Common Stock and Class B Common Stock basic and diluted net earnings (loss) per share for net earnings (loss) and provides a reconciliation of the number of weighted-average basic and diluted shares outstanding: ā ā ā ā ā ā ā ā ā ā 13 Weeks Ended ā March 26, 2020 March 28, 2019 ā ā (in thousands, except per share data) Numerator: ā ā Net earnings (loss) attributable to The Marcus Corporation ā $ (19,352) ā $ 1,860 Denominator: ā ā Denominator for basic EPS ā 30,975 ā 29,883 Effect of dilutive employee stock options ā ā ā 616 Denominator for diluted EPS ā 30,975 ā 30,499 Net earnings (loss) per share - basic: ā ā Common Stock ā $ (0.64) ā $ 0.06 Class B Common Stock ā $ (0.58) ā $ 0.06 Net earnings (loss) per share - diluted: ā ā Common Stock ā $ (0.64) ā $ 0.06 Class B Common Stock ā $ (0.58) ā $ 0.06 |
Schedule of Stockholders Equity | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Shareholdersā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Equity ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Accumulated ā ā ā ā Attributable ā ā ā ā ā ā ā ā ā ā ā Class B ā Capital ā ā ā ā Other ā ā ā ā to The ā Non- ā ā ā ā ā Common ā Common ā in Excess ā Retained ā Comprehensive ā Treasury ā Marcus ā controlling ā Total ā ā Stock ā Stock ā of Par ā Earnings ā Loss ā Stock ā Corporation ā Interests ā Equity BALANCES AT DECEMBER 26, 2019 ā $ 23,254 ā $ 7,936 ā $ 145,549 ā $ 461,884 ā $ (12,648) ā $ (4,540) ā $ 621,435 ā $ 23 ā $ 621,458 Cash Dividends: ā ā ā ā ā ā ā ā ā $.15 Class B Common Stock ā ā ā ā ā ā ā (1,224) ā ā ā ā ā (1,224) ā ā ā (1,224) $.17 Common Stock ā ā ā ā ā ā ā (3,921) ā ā ā ā ā (3,921) ā ā ā (3,921) Exercise of stock options ā ā ā ā ā 5 ā ā ā ā ā 40 ā 45 ā ā ā 45 Purchase of treasury stock ā ā ā ā ā ā ā ā ā ā ā (274) ā (274) ā ā ā (274) Savings and profit-sharing contribution ā ā ā ā ā 299 ā ā ā ā ā 1,016 ā 1,315 ā ā ā 1,315 Reissuance of treasury stock ā ā ā ā ā 2 ā ā ā ā ā 46 ā 48 ā ā ā 48 Issuance of non-vested stock ā ā ā ā ā (149) ā ā ā ā ā 149 ā ā ā ā ā ā Shared-based compensation ā ā ā ā ā 988 ā ā ā ā ā ā ā 988 ā ā ā 988 Conversions of Class B Common Stock ā 10 ā (10) ā ā ā ā ā ā ā ā ā ā ā ā ā ā Comprehensive loss ā ā ā ā ā ā ā (19,352) ā (547) ā ā ā (19,899) ā (148) ā (20,047) BALANCES AT MARCH 26, 2020 ā $ 23,264 ā $ 7,926 ā $ 146,694 ā $ 437,387 ā $ (13,195) ā $ (3,563) ā $ 598,513 ā $ (125) ā $ 598,388 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Shareholdersā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Equity ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Accumulated ā ā ā ā Attributable ā ā ā ā ā ā ā ā ā ā ā Class B ā Capital ā ā ā ā Other ā ā ā ā to The ā Non- ā ā ā ā ā Common ā Common ā in Excess ā Retained ā Comprehensive ā Treasury ā Marcus ā controlling ā Total ā ā Stock ā Stock ā of Par ā Earnings ā Loss ā Stock ā Corporation ā Interests ā Equity BALANCES AT DECEMBER 27, 2018 ā $ 22,843 ā $ 8,347 ā $ 63,830 ā $ 439,178 ā $ (6,758) ā $ (37,431) ā $ 490,009 ā $ 110 ā $ 490,119 Cash Dividends: ā ā ā ā ā ā ā ā ā $.15 Class B Common Stock ā ā ā ā ā ā ā (1,183) ā ā ā ā ā (1,183) ā ā ā (1,183) $.16 Common Stock ā ā ā ā ā ā ā (3,633) ā ā ā ā ā (3,633) ā ā ā (3,633) Exercise of stock options ā ā ā ā ā (78) ā ā ā ā ā 532 ā 454 ā ā ā 454 Purchase of treasury stock ā ā ā ā ā ā ā ā ā ā ā (428) ā (428) ā ā ā (428) Savings and profit-sharing contribution ā ā ā ā ā 810 ā ā ā ā ā 371 ā 1,181 ā ā ā 1,181 Reissuance of treasury stock ā ā ā ā ā 31 ā ā ā ā ā 16 ā 47 ā ā ā 47 Issuance of non-vested stock ā ā ā ā ā (127) ā ā ā ā ā 127 ā ā ā ā ā ā Shared-based compensation ā ā ā ā ā 777 ā ā ā ā ā ā ā 777 ā ā ā 777 Reissuance of treasury stock-acquisition ā ā ā ā ā ā ā ā 77,960 ā ā ā ā ā ā ā ā 31,237 ā ā 109,197 ā ā ā ā ā 109,197 Other ā ā ā ā ā ā ā ā (109) ā ā ā ā ā ā ā ā ā ā ā (109) ā ā ā ā ā (109) Conversions of Class B Common Stock ā 411 ā (411) ā ā ā ā ā ā ā ā ā ā ā ā ā ā Distributions to noncontrolling interest ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā (60) ā (60) Comprehensive income (loss) ā ā ā ā ā ā ā 1,860 ā (297) ā ā ā 1,563 ā (66) ā 1,497 BALANCES AT MARCH 28, 2019 ā $ 23,254 ā $ 7,936 ā $ 143,094 ā $ 436,222 ā $ (7,055) ā $ (5,576) ā $ 597,875 ā $ (16) ā $ 597,859 |
Schedule of Accumulated Other Comprehensive Income (Loss) | ā ā ā ā ā ā ā ā ā March 26, December 26, ā ā 2020 ā 2019 ā (in thousands) Unrecognized loss on interest rate swap agreements ā $ (1,612) ā $ (882) Net unrecognized actuarial loss for pension obligation ā (11,583) ā (11,766) ā ā $ (13,195) ā $ (12,648) |
Schedule of Accumulated Other Comprehensive Income (Loss) | ā ā ā ā ā ā ā ā ā ā 13 Weeks Ended ā March 26, 2020 March 28, 2019 ā ā (in thousands) Service cost ā $ 274 ā $ 209 Interest cost ā 342 ā 371 Net amortization of prior service cost and actuarial loss ā 248 ā 109 Net periodic pension cost ā $ 864 ā $ 689 ā |
Schedule of Disaggregation of Revenue | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Reportable Segment ā ā ā ā Theatres Hotels/Resorts Corporate Total Theatre admissions ā $ 55,395 ā $ ā ā $ ā ā $ 55,395 Rooms ā ā ā 16,989 ā ā ā 16,989 Theatre concessions ā 45,930 ā ā ā ā ā 45,930 Food and beverage ā ā ā 13,614 ā ā ā 13,614 Other revenues (1) ā 7,703 ā 10,984 ā 89 ā 18,776 Cost reimbursements ā 183 ā 8,573 ā ā ā 8,756 Total revenues ā $ 109,211 ā $ 50,160 ā $ 89 ā $ 159,460 ā (1) Included in other revenues is an immaterial amount related to rental income that is not considered revenue from contracts with customers. ā The disaggregation of revenues by business segment for the 13 weeks ended March 28, 2019 is as follows (in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Reportable Segment ā ā ā ā Theatres Hotels/Resorts Corporate Total Theatre admissions ā $ 58,969 ā $ ā ā $ ā ā $ 58,969 Rooms ā ā ā 18,938 ā ā ā 18,938 Theatre concessions ā 47,155 ā ā ā ā ā 47,155 Food and beverage ā ā ā 15,783 ā ā ā 15,783 Other revenues (1) ā 8,569 ā 12,167 ā 93 ā 20,829 Cost reimbursements ā 192 ā 8,173 ā ā ā 8,365 Total revenues ā $ 114,885 ā $ 55,061 ā $ 93 ā $ 170,039 ā (1) Included in other revenues is an immaterial amount related to rental income that is not considered revenue from contracts with customers. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 26, 2020 | |
Long-Term Debt | |
Schedule of Long-term Debt Instruments | Long-term debt is summarized as follows: ā ā ā ā ā ā ā ā March 26, 2020 December 26, 2019 ā ā (in thousands, except payment data) Mortgage notes ā $ 24,482 ā $ 24,571 Senior notes ā 109,000 ā 109,000 Unsecured term note due February 2025, with monthly principal and interest payments of $39,110, bearing interest at 5.75% ā 2,006 ā 2,093 Revolving credit agreement ā 220,000 ā 81,000 Debt issuance costs ā (305) ā (322) ā ā 355,183 ā 216,342 Less current maturities, net of issuance costs ā 9,977 ā 9,910 ā ā $ 345,206 ā $ 206,432 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 26, 2020 | |
Leases | |
Schedule of Lease, Cost | Total lease cost consists of the following: ā ā ā ā ā ā ā ā ā ā 13 Weeks ā ā ā ā Ended Lease Cost Classification March 26, 2020 ā ā ā ā (in thousands) Finance lease costs: ā Amortization of finance lease assets Depreciation and amortization ā $ 711 Interest on lease liabilities Interest expense ā 269 ā ā ā $ 980 Operating lease costs: ā ā ā ā ā Operating lease costs ā Rent expense ā $ 6,667 Variable lease cost Rent expense ā 227 Short-term lease cost Rent expense ā 60 ā ā $ 6,954 |
Schedule of Other Information Related to Leases | Additional Information related to leases is as follows: ā ā ā ā ā ā 13 Weeks ā ā Ended Other Information ā March 26, 2020 ā ā (in thousands) Cash paid for amounts included in the measurement of lease liabilities: ā Financing cash flows from finance leases ā $ 635 Operating cash flows from finance leases ā 269 Operating cash flows from operating leases ā 4,644 ā ā Right of use assets obtained in exchange for new lease obligations: ā Finance lease liabilities ā 25 Operating lease liabilities ā 9,630 ā ā ā ā ā ā ā March 26, 2020 ā ā (in thousands) Finance leases: ā Property and equipment ā gross ā $ 74,382 Accumulated depreciation and amortization ā (53,631) Property and equipment - net ā $ 20,751 |
Schedule of Lease Term and Discount Rate | ā Remaining lease terms and discount rates are as follows: ā ā ā ā ā Lease Term and Discount Rate March 26, 2020 Weighted-average remaining lease terms: ā Finance leases 10 years Operating leases 15 years ā ā Weighted-average discount rates: ā Finance leases 4.67 % Operating leases 4.54 % ā |
Business Segment Information (T
Business Segment Information (Tables) | 3 Months Ended |
Mar. 26, 2020 | |
Business Segment Information | |
Schedule of Segment Reporting Information, by Segment | ā ā ā ā ā ā ā ā ā ā ā ā ā ā 13 Weeks Ended ā ā Hotels/ Corporate ā ā March 26, 2020 ā Theatres ā Resorts ā Items ā Total Revenues ā $ 109,211 ā $ 50,160 ā $ 89 ā $ 159,460 Operating income (loss) ā (7,083) ā (10,853) ā (4,264) ā (22,200) Depreciation and amortization ā 13,510 ā 5,412 ā 111 ā 19,033 ā ā ā ā ā ā ā ā ā ā ā ā ā ā 13 Weeks Ended ā ā Hotels/ Corporate ā ā March 28, 2019 ā Theatres ā Resorts ā Items ā Total Revenues ā $ 114,885 ā $ 55,061 ā $ 93 ā $ 170,039 Operating income (loss) ā 12,594 ā (3,153) ā (4,491) ā 4,950 Depreciation and amortization ā 11,127 ā 4,767 ā 91 ā 15,985 ā |
General - Earnings Per Share (D
General - Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 26, 2020 | Mar. 28, 2019 | |
Numerator: | ||
Net earnings (loss) attributable to The Marcus Corporation | $ (19,352) | $ 1,860 |
Denominator: | ||
Denominator for basic EPS | 30,975 | 29,883 |
Effect of dilutive employee stock options | 616 | |
Denominator for diluted EPS | 30,975 | 30,499 |
Common Stock [Member] | ||
Net earnings (loss) per share - basic: | ||
Common Stock | $ (0.64) | $ 0.06 |
Net earnings (loss) per share - diluted: | ||
Common Stock | (0.64) | 0.06 |
Class B Common Stock [Member] | ||
Net earnings (loss) per share - basic: | ||
Common Stock | (0.58) | 0.06 |
Net earnings (loss) per share - diluted: | ||
Common Stock | $ (0.58) | $ 0.06 |
General - Shareholders' Equity
General - Shareholders' Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2020 | Mar. 28, 2019 | |
Beginning balance | $ 621,458 | $ 490,119 |
Exercise of stock options | 45 | 454 |
Purchase of treasury stock | (274) | (428) |
Savings and profit-sharing contribution | 1,315 | 1,181 |
Reissuance of treasury stock | 48 | 47 |
Share-based compensation | 988 | 777 |
Reissuance of treasury stock-acquisition | 109,197 | |
Other | (109) | |
Distributions to noncontrolling interest | (60) | |
Comprehensive income (loss) | (20,047) | 1,497 |
Ending balance | 598,388 | 597,859 |
Capital in Excess of Par [Member] | ||
Beginning balance | 145,549 | 63,830 |
Exercise of stock options | 5 | (78) |
Savings and profit-sharing contribution | 299 | 810 |
Reissuance of treasury stock | 2 | 31 |
Issuance of non-vested stock | (149) | (127) |
Share-based compensation | 988 | 777 |
Reissuance of treasury stock-acquisition | 77,960 | |
Other | (109) | |
Ending balance | 146,694 | 143,094 |
Retained Earnings [Member] | ||
Beginning balance | 461,884 | 439,178 |
Comprehensive income (loss) | (19,352) | 1,860 |
Ending balance | 437,387 | 436,222 |
Accumulated Other Comprehensive Income (Loss) [Member] | ||
Beginning balance | (12,648) | (6,758) |
Comprehensive income (loss) | (547) | (297) |
Ending balance | (13,195) | (7,055) |
Treasury Stock [Member] | ||
Beginning balance | (4,540) | (37,431) |
Exercise of stock options | 40 | 532 |
Purchase of treasury stock | (274) | (428) |
Savings and profit-sharing contribution | 1,016 | 371 |
Reissuance of treasury stock | 46 | 16 |
Issuance of non-vested stock | 149 | 127 |
Reissuance of treasury stock-acquisition | 31,237 | |
Ending balance | (3,563) | (5,576) |
Shareholders' Equity Attributable to The Marcus Corporation [Member] | ||
Beginning balance | 621,435 | 490,009 |
Exercise of stock options | 45 | 454 |
Purchase of treasury stock | (274) | (428) |
Savings and profit-sharing contribution | 1,315 | 1,181 |
Reissuance of treasury stock | 48 | 47 |
Share-based compensation | 988 | 777 |
Reissuance of treasury stock-acquisition | 109,197 | |
Other | (109) | |
Comprehensive income (loss) | (19,899) | 1,563 |
Ending balance | 598,513 | 597,875 |
Non- controlling Interests [Member] | ||
Beginning balance | 23 | 110 |
Distributions to noncontrolling interest | (60) | |
Comprehensive income (loss) | (148) | (66) |
Ending balance | (125) | (16) |
Common Stock [Member] | ||
Beginning balance | 23,254 | 22,843 |
Cash dividends: | (3,921) | (3,633) |
Conversions of Class B Common Stock | 10 | 411 |
Ending balance | 23,264 | 23,254 |
Common Stock [Member] | Retained Earnings [Member] | ||
Cash dividends: | (3,921) | (3,633) |
Common Stock [Member] | Shareholders' Equity Attributable to The Marcus Corporation [Member] | ||
Cash dividends: | (3,921) | (3,633) |
Class B Common Stock [Member] | ||
Beginning balance | 7,936 | 8,347 |
Cash dividends: | (1,224) | (1,183) |
Conversions of Class B Common Stock | (10) | (411) |
Ending balance | 7,926 | 7,936 |
Class B Common Stock [Member] | Retained Earnings [Member] | ||
Cash dividends: | (1,224) | (1,183) |
Class B Common Stock [Member] | Shareholders' Equity Attributable to The Marcus Corporation [Member] | ||
Cash dividends: | $ (1,224) | $ (1,183) |
General - Shareholders' Equit_2
General - Shareholders' Equity Parenthetical (Details) - $ / shares | 3 Months Ended | |
Mar. 26, 2020 | Mar. 28, 2019 | |
Class B Common Stock [Member] | ||
Common Stock, Dividends, Per Share, Cash Paid | $ 0.15 | $ 0.15 |
Common Stock [Member] | ||
Common Stock, Dividends, Per Share, Cash Paid | $ 0.17 | $ 0.16 |
General - Accumulated Other Com
General - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | Mar. 26, 2020 | Dec. 26, 2019 |
General | ||
Unrecognized loss on interest rate swap agreements | $ (1,612) | $ (882) |
Net unrecognized actuarial loss for pension obligation | (11,583) | (11,766) |
Accumulated Other Comprehensive Income (Loss), Net of Tax | $ (13,195) | $ (12,648) |
General - Defined Benefit Plan
General - Defined Benefit Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2020 | Mar. 28, 2019 | |
General | ||
Service cost | $ 274 | $ 209 |
Interest cost | 342 | 371 |
Net amortization of prior service cost and actuarial loss | 248 | 109 |
Net periodic pension cost | $ 864 | $ 689 |
General - Revenue Recognition (
General - Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 26, 2020 | Mar. 28, 2019 | ||
Summary of Significant Accounting Policies [Line Items] | |||
Cost reimbursements | $ 8,756 | $ 8,365 | |
Total revenues | 159,460 | 170,039 | |
Theatre admissions [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Revenue from Contract with Customer, Including Assessed Tax | 55,395 | 58,969 | |
Rooms [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Revenue from Contract with Customer, Including Assessed Tax | 16,989 | 18,938 | |
Theatre concessions [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Revenue from Contract with Customer, Including Assessed Tax | 45,930 | 47,155 | |
Food and beverage [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Revenue from Contract with Customer, Including Assessed Tax | 13,614 | 15,783 | |
Other revenues [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Revenue from Contract with Customer, Including Assessed Tax | [1] | 18,776 | 20,829 |
Theatres Segment [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Cost reimbursements | 183 | 192 | |
Total revenues | 109,211 | 114,885 | |
Theatres Segment [Member] | Theatre admissions [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Revenue from Contract with Customer, Including Assessed Tax | 55,395 | 58,969 | |
Theatres Segment [Member] | Theatre concessions [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Revenue from Contract with Customer, Including Assessed Tax | 45,930 | 47,155 | |
Theatres Segment [Member] | Other revenues [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Revenue from Contract with Customer, Including Assessed Tax | [1] | 7,703 | 8,569 |
Hotels or Resorts [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Cost reimbursements | 8,573 | 8,173 | |
Total revenues | 50,160 | 55,061 | |
Hotels or Resorts [Member] | Rooms [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Revenue from Contract with Customer, Including Assessed Tax | 16,989 | 18,938 | |
Hotels or Resorts [Member] | Food and beverage [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Revenue from Contract with Customer, Including Assessed Tax | 13,614 | 15,783 | |
Hotels or Resorts [Member] | Other revenues [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Revenue from Contract with Customer, Including Assessed Tax | [1] | 10,984 | 12,167 |
Corporate Segment [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Total revenues | 89 | 93 | |
Corporate Segment [Member] | Other revenues [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Revenue from Contract with Customer, Including Assessed Tax | [1] | $ 89 | $ 93 |
[1] | Included in other revenues is an immaterial amount related to rental income that is not considered revenue from contracts with customers. |
General - Additional informatio
General - Additional information (Details) - USD ($) | 3 Months Ended | ||
Mar. 26, 2020 | Mar. 28, 2019 | Dec. 26, 2019 | |
Summary of Significant Accounting Policies [Line Items] | |||
Depreciation | $ 19,034,000 | $ 15,955,000 | |
Percentage Of Cash Dividends | 110.00% | ||
Deferred Revenue | $ 37,108,000 | $ 43,200,000 | |
Interest Rate Fair Value Hedge Liability at Fair Value | 2,181,000 | ||
Contract assets | 0 | 0 | |
Deferred Revenue, Revenue Recognized | 11,240,000 | ||
Remaining Performance Obligation Related to Advanced Ticket Sales | 4,709,000 | ||
Remaining Performance Obligation Related to Hotels Gift Cards | 2,667,000 | ||
Trade Names [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Impairment charge | 2,200,000 | ||
Fair Value, Inputs, Level 1 [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Trading Securities, Fair Value Disclosure | 5,168,000 | 5,825,000 | |
Fair Value, Inputs, Level 2 [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Interest Rate Fair Value Hedge Liability at Fair Value | $ 2,181,000 | $ 1,194,000 |
Impact of COVID-19 Pandemic (De
Impact of COVID-19 Pandemic (Details) - restaurant | 3 Months Ended | ||
Mar. 26, 2020 | Apr. 08, 2020 | Mar. 24, 2020 | |
Impact of COVID-19 Pandemic | |||
Number of hotels and resorts closed | 3 | 5 | |
Number of hotels and resorts owned | 8 | ||
Temporary reduction in salary of Company's chairman, president and chief executive officer (as a percent) | 50.00% | ||
Reduction in each theatre auditorium's capacity (as a percent) | 50.00% |
Impairment Charges - Additional
Impairment Charges - Additional Information (Detail) | 3 Months Ended |
Mar. 26, 2020USD ($) | |
Impairment Charge [Line Items] | |
Impaired Asset Fair Value | $ 13,686,000 |
Trade Names [Member] | |
Impairment Charge [Line Items] | |
Impaired Asset Fair Value | $ 7,300,000 |
Royalty rate (as a percent) | 1.00% |
Discount rate (as a percent) | 17.00% |
Impairment charge | $ 2,200,000 |
Fair Value, Inputs, Level 3 [Member] | |
Impairment Charge [Line Items] | |
Impairment of Fixed Assets | 6,512,000 |
Fair Value, Inputs, Level 3 [Member] | Trade Names [Member] | |
Impairment Charge [Line Items] | |
Impairment charge | $ 2,200,000 |
Acquisition - Additional Inform
Acquisition - Additional Information (Details) - VSSSouthern Theatres LLC [Member] - USD ($) | Feb. 01, 2019 | Mar. 28, 2019 |
Business Acquisition [Line Items] | ||
Business Combination, Consideration Transferred | $ 139,310,000 | |
Cash Consideration | $ 30,000,000 | |
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 2,450,000 | |
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned | $ 109,197,000 | |
General and Administrative Expense [Member] | ||
Business Acquisition [Line Items] | ||
Business Acquisition, Transaction Costs | $ 1,153,000 |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) | Mar. 26, 2020 | Dec. 26, 2019 |
Long-Term Debt | ||
Mortgage notes | $ 24,482,000 | $ 24,571,000 |
Senior notes | 109,000,000 | 109,000,000 |
Unsecured term note due February 2025, with monthly principal and interest payments of $39,110, bearing interest at 5.75% | 2,006,000 | 2,093,000 |
Revolving credit agreement | 220,000,000 | 81,000,000 |
Debt issuance costs | (305,000) | (322,000) |
Long-term Debt, Total | 355,183,000 | 216,342,000 |
Less current maturities, net of issuance costs | 9,977,000 | 9,910,000 |
Long-term Debt, Excluding Current Maturities, Total | $ 345,206,000 | $ 206,432,000 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) | Dec. 30, 2021USD ($) | Jul. 01, 2021USD ($) | Apr. 01, 2021USD ($) | Dec. 31, 2020USD ($) | Sep. 24, 2020USD ($) | Jun. 25, 2020USD ($) | Apr. 30, 2020 | Apr. 29, 2020 | Apr. 17, 2020USD ($)agreement | Jan. 09, 2020USD ($) | Jun. 25, 2020USD ($) | Mar. 26, 2020USD ($) | Mar. 28, 2019USD ($) | Dec. 31, 2020USD ($) | Dec. 26, 2019USD ($) | Mar. 01, 2018USD ($) |
Principal and interest payments | $ 39,110 | $ 39,110 | ||||||||||||||
Interest Rate of Unsecured Term Note | 5.75% | 5.75% | ||||||||||||||
Maximum limit of cash on hand for not paying the revolving loans | $ 125,000,000 | |||||||||||||||
Senior notes | 109,000,000 | $ 109,000,000 | ||||||||||||||
Derivative, Amount of Hedged Item | $ 50,000,000 | |||||||||||||||
Covenant for EBITDA | $ 42,000,000 | $ (40,000,000) | $ (65,000,000) | $ (90,000,000) | $ (57,000,000) | |||||||||||
Covenant for the amount of liquidity | $ 103,500,000 | $ 83,000,000 | $ 78,500,000 | $ 67,000,000 | $ 102,000,000 | $ 102,000,000 | $ 78,500,000 | |||||||||
Amount of reduction in liquidity | 50,000,000 | |||||||||||||||
Covenant regarding the capital expenditure | $ 50,000,000 | $ 22,500,000 | ||||||||||||||
Percentage of fee payable to each note holder | 0.725% | |||||||||||||||
Percentage of fee payable to each note holder quarterly | 0.18125% | |||||||||||||||
Interest Rate Fair Value Hedge Liability at Fair Value | 2,181,000 | |||||||||||||||
Interest Expense | 2,516,000 | $ 3,059,000 | ||||||||||||||
Term Loan A | ||||||||||||||||
Face amount | $ 90,800,000 | |||||||||||||||
Facility fee (as a percent) | 0.40% | |||||||||||||||
Term Loan A | LIBOR | ||||||||||||||||
Specified margin (as a percent) | 2.50% | |||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 2.50% | |||||||||||||||
Term Loan A | ABR | ||||||||||||||||
Specified margin (as a percent) | 1.50% | |||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 1.50% | |||||||||||||||
Note Purchase Agreement | ||||||||||||||||
Senior notes | $ 100,000,000 | |||||||||||||||
Number of Agreements | agreement | 2 | |||||||||||||||
Repayments of Notes Payable | $ 9,000,000 | |||||||||||||||
Minimum [Member] | Note Purchase Agreement | ||||||||||||||||
Interest rate | 4.02% | |||||||||||||||
Maximum [Member] | Note Purchase Agreement | ||||||||||||||||
Interest rate | 4.32% | |||||||||||||||
Credit Agreement [Member] | ||||||||||||||||
Face amount | $ 225,000,000 | |||||||||||||||
Interest rate description | (i) LIBOR, subject to a 1% floor, plus a specified margin; 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 l% plus one-month LIBOR plus a specified margin based upon the Company's consolidated debt to capitalization ratio as of the most recent determination date | |||||||||||||||
Coverage ratio | 3.0 to 1.0 | |||||||||||||||
Credit Agreement [Member] | Term Loan A | ||||||||||||||||
Term of the debt | 5 years | |||||||||||||||
Revolving Credit Facility [Member] | LIBOR | ||||||||||||||||
Specified margin (as a percent) | 2.10% | |||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 2.10% | |||||||||||||||
Revolving Credit Facility [Member] | ABR | ||||||||||||||||
Specified margin (as a percent) | 1.10% | |||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 1.10% | |||||||||||||||
Interest Rate Swap [Member] | ||||||||||||||||
Derivative, Notional Amount | $ 25,000,000 | |||||||||||||||
Derivative, Variable Interest Rate | 1.625% | |||||||||||||||
Interest Rate Swap Agreements One [Member] | ||||||||||||||||
Derivative, Notional Amount | $ 25,000,000 | |||||||||||||||
Derivative, Fixed Interest Rate | 2.559% | |||||||||||||||
Interest Rate Swap Agreements Two [Member] | ||||||||||||||||
Derivative, Fixed Interest Rate | 2.687% | |||||||||||||||
Interest Rate Fair Value Hedge Liability at Fair Value | $ 2,181,000 | $ 1,194,000 | ||||||||||||||
Interest Rate Swap Agreements Two [Member] | Accrued Liabilities [Member] | ||||||||||||||||
Interest Rate Fair Value Hedge Liability at Fair Value | 514,000 | |||||||||||||||
Interest Rate Swap Agreements Two [Member] | Deferred Compensation and Other [Member] | ||||||||||||||||
Interest Rate Fair Value Hedge Liability at Fair Value | $ 1,667,000 |
Leases - Total lease costs (Det
Leases - Total lease costs (Details) $ in Thousands | 3 Months Ended |
Mar. 26, 2020USD ($) | |
Finance lease costs | |
Amortization of finance lease assets | $ 711 |
Interest on lease liabilities | 269 |
Total finance lease costs | 980 |
Operating lease costs | |
Operating lease costs | 6,667 |
Variable lease cost | 227 |
Short-term lease cost | 60 |
Total operating lease costs | $ 6,954 |
Leases - Other Information (Det
Leases - Other Information (Details) $ in Thousands | 3 Months Ended |
Mar. 26, 2020USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Financing cash flows from finance leases | $ 635 |
Operating cash flows from finance leases | 269 |
Operating cash flows from operating leases | 4,644 |
Right of use assets obtained in exchange for new lease obligations: | |
Finance lease liabilities | 25 |
Operating lease liabilities | $ 9,630 |
Leases - Finance leases (Detail
Leases - Finance leases (Details) - USD ($) $ in Thousands | Mar. 26, 2020 | Dec. 26, 2019 |
Fixed assets | ||
Property, Plant and Equipment, Gross | $ 1,541,758 | $ 1,533,832 |
AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment | (629,490) | (610,578) |
Property, Plant and Equipment, Net | 912,268 | $ 923,254 |
Finance Leased Assets [Member] | ||
Fixed assets | ||
Property, Plant and Equipment, Gross | 74,382 | |
AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment | (53,631) | |
Property, Plant and Equipment, Net | $ 20,751 |
Leases - Lease Term and Discoun
Leases - Lease Term and Discount Rate (Details) | Mar. 26, 2020 | Sep. 26, 2019 |
Weighted-average remaining lease terms: | ||
Finance leases | 10 years | 10 years |
Operating leases | 15 years | |
Weighted-average discount rates: | ||
Finance leases | 4.67% | |
Operating leases | 4.54% |
Leases - Additional Information
Leases - Additional Information (Details) | Mar. 26, 2020 |
Minimum [Member] | |
Lessor, Operating Lease, Term of Contract | 1 year |
Maximum [Member] | |
Lessor, Operating Lease, Term of Contract | 45 years |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 26, 2020 | Mar. 28, 2019 | |
Income Taxes [Line Items] | ||
Effective Income Tax Rate, Adjusted For Losses From Noncontrolling Interests | 25.30% | 0.70% |
Minimum [Member] | ||
Income Taxes [Line Items] | ||
Income tax refund receivable | $ 15 | |
Maximum [Member] | ||
Income Taxes [Line Items] | ||
Income tax refund receivable | $ 25 |
Business Segment Information (D
Business Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2020 | Mar. 28, 2019 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 159,460 | $ 170,039 |
Operating income (loss) | (22,200) | 4,950 |
Depreciation and amortization | 19,033 | 15,985 |
Theatres [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 109,211 | 114,885 |
Operating income (loss) | (7,083) | 12,594 |
Depreciation and amortization | 13,510 | 11,127 |
Hotels/Resorts [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 50,160 | 55,061 |
Operating income (loss) | (10,853) | (3,153) |
Depreciation and amortization | 5,412 | 4,767 |
Corporate Items [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 89 | 93 |
Operating income (loss) | (4,264) | (4,491) |
Depreciation and amortization | $ 111 | $ 91 |