FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended November 14, 1996
[] 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 (I.R.S. Employer
incorporation or organization) Identification No.)
250 EAST WISCONSIN AVENUE - MILWAUKEE, WISCONSIN 53202
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (414) 272-6020
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 12, 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 X No
APPLICABLE ONLY TO CORPORATE ISSUERS:
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 DECEMBER 16, 1996 - 10,577,074
CLASS B COMMON STOCK OUTSTANDING AT DECEMBER 16, 1996 - 8,856,405
THE MARCUS CORPORATION
INDEX
Page
No.
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements:
Balance Sheets
(November 14, 1996 and May 30, 1996) . . . . . 3
Statements of Earnings
(Twelve and twenty-four weeks ended November
14, 1996 and November 9, 1995) . . . . . . . . 5
Statements of Cash Flows
(Twenty-four weeks ended November 14, 1996 and
November 9, 1995) . . . . . . . . . . . . . . 6
Condensed Notes to Financial Statements . . . 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . 8
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security
Holders . . . . . . . . . . . . . . . . . . . 12
Item 6. Exhibits and Reports on Form 8-K . . . . . . . 13
Signatures . . . . . . . . . . . . . . . . . . . . . . . 14
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
THE MARCUS CORPORATION
Consolidated Balance Sheets
(in thousands)
(Unaudited) (Audited)
November 14, May 30,
ASSETS 1996 1996
Current Assets:
Cash and cash equivalents $ 40,167 $ 15,466
Accounts and notes receivable 8,438 8,780
Receivables from joint ventures 454 4,890
Other current assets 3,555 2,463
------- -------
Total current assets 52,614 31,599
------- -------
Property and equipment:
Land and improvements 66,066 60,177
Buildings and improvements 370,181 329,458
Leasehold improvements 5,198 5,688
Furniture, fixtures and equipment 148,176 137,305
Construction in progress 21,837 22,336
------- -------
Total property and equipment 611,458 554,964
Less accumulated depreciation and
amortization 153,648 143,401
------- -------
Net property and equipment 457,810 411,563
------- -------
Other assets:
Investments in joint ventures 1,484 1,295
Other 13,158 10,858
------- -------
Total other assets 14,642 12,153
------- -------
TOTAL ASSETS $525,066 $455,315
======= =======
See accompanying notes to consolidated financial statements
THE MARCUS CORPORATION
Consolidated Balance Sheets
(unaudited) (audited)
November 14, May 30,
LIABILITIES AND SHAREHOLDERS' EQUITY 1996 1996
Current liabilities:
Notes payable $ 5,173 $ 5,555
Accounts payable 14,583 15,646
Income taxes 4,103 1,393
Taxes other than income taxes 10,202 8,323
Accrued compensation 2,343 1,380
Other accrued liabilities 8,349 9,352
Current maturities on long-term debt 11,480 9,069
-------- --------
Total current liabilities 56,233 50,718
-------- --------
Long-term debt 170,546 127,135
Deferred income taxes 20,186 20,027
Deferred compensation and other 9,835 6,187
Shareholders' equity:
Preferred Stock, $1 par; authorized
1,000,000 shares; none issued
Common Stock, $1 par; authorized
30,000,000 shares; issued 11,530,262
shares at November 14, 1996,
11,529,962 shares at May 30, 1996 11,530 11,530
Class B Common Stock, $1 par;
authorized 20,000,000 shares; issued
and outstanding 8,856,305 shares at
November 14, 1996, 8,856,605 shares
at May 30, 1996 8,856 8,857
Capital in excess of par 38,894 38,832
Retained earnings 212,639 195,643
------- -------
271,919 254,862
Less cost of Common Stock in treasury
(712,921 shares at November 14, 1996
and 718,352 shares at May 30, 1996) 3,653 3,614
-------- --------
Total shareholders' equity 268,266 251,248
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $525,066 $455,315
======== ========
See accompanying notes to consolidated financial statements
THE MARCUS CORPORATION
Consolidated Statements of Earnings (Unaudited)
(in thousands, except per share and share data)
November 14, 1996 November 9, 1995
12 Weeks 24 Weeks 12 Weeks 24 Weeks
Revenues:
Rooms and telephone $ 36,597 $ 77,150 $ 33,614 $ 70,626
Food and beverage 11,252 22,547 10,657 22,523
Theatre operations 11,878 32,364 10,033 28,890
Other income 5,101 10,591 3,657 9,490
------- ------- ------- -------
Total revenues 64,828 142,652 57,961 131,529
------- ------- ------- -------
Costs and expenses:
Rooms and telephone 13,081 26,381 11,780 23,794
Food and beverage 7,902 15,824 7,614 15,920
Theatre operations 7,727 20,152 6,077 17,324
Advertising and marketing 5,212 9,106 3,550 6,874
Administrative 5,520 12,128 5,705 13,064
Depreciation and amortization 6,528 12,868 5,599 11,474
Rent 500 1,306 509 1,528
Property taxes 2,494 5,090 2,097 4,300
Other operating expenses 2,377 4,892 3,265 6,059
------- ------- ------- -------
Total costs and expenses 51,341 107,747 46,196 100,337
------- ------- ------- -------
Operating income 13,487 34,905 11,765 31,192
Other income (expense):
Investment income 294 437 956 1,320
Interest expense (2,489) (4,668) (2,124) (4,235)
Gain on disposition of property
and equipment 15 19 691 25,298
------- -------- -------- --------
(2,180) (4,212) (477) 22,383
------- -------- -------- --------
Earnings before income taxes 11,307 30,693 11,288 53,575
Income taxes 4,525 12,283 4,697 21,674
------- -------- -------- --------
Net earnings $ 6,782 $ 18,410 $ 6,591 $ 31,901
======= ======== ======== ========
Net earnings per share:*
Earnings excluding gain on
restaurant sale $0.34 $0.93 $0.33 $0.86
After-tax gain on restaurant
sale -- -- -- $0.75
---- ---- ---- ----
Net earnings per share $0.34 $0.93 $0.33 $1.61
==== ==== ==== ====
Weighted Average Shares
Outstanding* 19,843,000 19,762,500
* All per share and weighted average shares outstanding data has been
adjusted to reflect the 50% stock dividend distributed on November 14,
1995.
See accompanying notes to consolidated financial statements
THE MARCUS CORPORATION
Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
24 Weeks Ended
November 14, November 9,
1996 1995
OPERATING ACTIVITIES:
Net earnings $ 18,410 $ 31,901
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Earnings on investments in joint
ventures, net of distributions (189) (213)
Gain on disposition of property
and equipment (19) (25,298)
Depreciation and amortization 12,868 11,474
Deferred income taxes 159 793
Deferred compensation and other 3,648 473
Changes in assets and liabilities:
Accounts and notes receivable 342 (3,208)
Other current assets (1,092) 1,205
Accounts payable (1,063) (9,843)
Income taxes 2,710 6,273
Taxes other than income taxes 1,879 1,351
Accrued compensation 963 1,256
Other accrued liabilities (1,003) (47)
------- --------
Total adjustments 19,203 (15,784)
------- --------
Net cash provided by operating
activities 37,613 16,117
INVESTING ACTIVITIES:
Capital expenditures (60,155) (36,709)
Net proceeds from disposals of property,
equipment and other assets 1,059 49,530
Purchase of interest in joint ventures,
net of cash acquired -- (329)
(Increase) decrease in other assets (2,300) 1,925
Cash received from joint ventures 4,436 275
------- -------
Net cash provided by (used in) investing
activities (56,960) 14,692
------- -------
FINANCING ACTIVITIES:
Debt transactions:
Net proceeds from issuance of notes
payable and long-term debt 97,875 --
Principal payments on notes payable
and long-term debt (52,435) (21,136)
Equity transactions:
Treasury stock transactions, except
for stock options (117) (104)
Exercise of stock options 140 247
Dividends paid (1,415) (5,010)
------- -------
Net cash provided by (used in) financing
activities 44,048 (26,003)
------- -------
Net increase (decrease) in cash and cash
equivalents 24,701 4,806
Cash and cash equivalents at beginning
of year 15,466 8,798
------ -------
Cash and cash equivalents at end of
period $40,167 $13,604
====== ======
See accompanying notes to consolidated financial statements
THE MARCUS CORPORATION
CONDENSED NOTES TO FINANCIAL STATEMENTS FOR THE
TWELVE AND TWENTY-FOUR WEEKS ENDED
NOVEMBER 14, 1996
(Unaudited)
A. Refer to the Company's audited financial statements (including
footnotes) for the year ended May 30, 1996, contained in the
Company's Form 10-K Annual Report for such year, for a description of
the Company's accounting policies.
B. The consolidated financial statements for the twelve and twenty-four
weeks ended November 14, 1996 and November 9, 1995, have been
prepared by the Company without audit. In the opinion of management,
all adjustments consisting only of normal recurring accruals
necessary to present fairly the unaudited interim financial
information at November 14, 1996, and for all periods presented have
been made.
C. Pursuant to an asset purchase agreement dated April 12, 1995, the
Company completed the sale of its 18 existing Applebee's Neighborhood
Grill & Bar restaurants (Applebee's), two Applebee's under
construction, five Applebee's under development and its development
rights for Applebee's to Apple South, Inc. (the Purchaser). On June
5, 1995, the Company entered into a management agreement with the
Purchaser, whereby the Purchaser commenced to immediately manage,
operate and assume all of the Company's existing operating and
development responsibilities related to the Company's Applebee's
restaurant operations. The Purchaser received all profits of the
restaurants between June 5, 1995 and June 30, 1995, as reimbursement
for its management service. On June 30, 1995, proceeds from the sale
of approximately $48.3 million were received by the Company in cash.
D. The Company's Board of Directors declared a three-for-two stock
split, effected in the form of a 50% stock dividend, distributed on
November 14, 1995, to all holders of Common Stock and Class B Common
Stock. All per share and weighted average shares outstanding data
prior to November 14, 1995, have been adjusted to reflect this
dividend.
E. Certain items in the accompanying fiscal 1996 financial statements
have been reclassified to conform to the fiscal 1997 presentation.
Item 2. Management's Discussion and Analysis of Results of Operations
and Financial Condition
Special Note Regarding Forward-Looking Statements
Certain matters discussed in this Management's Discussion and
Analysis of Results of Operations and Financial Condition 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 can generally be identified as
such because the context of the statement will include words such as the
Company "believes," "anticipates," "expects" or words of similar import.
Similarly, statements that describe the Company's future plans, objectives
or goals are also forward-looking statements. Such forward looking
statements are subject to certain risks, assumptions and uncertainties
which are described in close proximity to such statements and which could
cause actual results to differ materially from those currently
anticipated. Shareholders, potential investors and other readers are
urged to consider these risks, assumptions and uncertainties 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 only made as of the date of this Form 10-Q and
the Company undertakes no obligation to publicly update such forward-
looking statements to reflect subsequent events or circumstances.
RESULTS OF OPERATIONS
General
The Company reports its results of operations on a 52-or 53-week
fiscal year which ends on the last Thursday in May. Each fiscal year is
divided into three 12-week quarters and a final quarter consisting of 16
or 17 weeks. The final quarter of fiscal 1997 will consist of 17 weeks
for the Company's motel and hotels/resorts divisions, while the Company
and its other remaining divisions will report a 16-week fourth quarter.
Fiscal 1996 was a 53-week fiscal year for the Company and its theatre
division, while the Company's remaining divisions reported a 52-week year
in fiscal 1996.
Revenues for the second quarter of fiscal 1997 ended November
14, 1996, totaled $64.8 million, an increase of $6.8 million, or 11.8%,
from revenues of $58.0 million for the second quarter of fiscal 1996. For
the first half of fiscal 1997, revenues were $142.6 million, an increase
of $11.1 million, or 8.5%, from revenues of $131.5 million in the first
half of fiscal 1996. All four operating segments contributed to the
increase in revenues for the fiscal 1997 second quarter.
Net earnings for the second quarter of fiscal 1997 were $6.8
million, or $.34 per share, up 2.9% and 3.0%, respectively, from net
earnings of $6.6 million, or $.33 per share, for the same quarter in the
prior year. For the first half of fiscal 1997, net earnings were $18.4
million, or $.93 per share. This represented a 7.7% and 8.1% increase,
respectively, over comparable earnings of $17.1 million, or $.86 per
share, for the first half of fiscal 1996. Including the after-tax gain of
$14.8 million, or $.75 per share, resulting from the Company's sale of its
Applebee's restaurants and related rights in June 1995, net earnings for
fiscal 1996's first half were $31.9 million, or $1.61 per share.
Operating income (earnings before other income/expense and
income taxes) totaled $13.5 million in the second quarter of fiscal 1997,
an increase of $1.7 million, or 14.6%, compared to the prior year same
period. For the first half of fiscal 1997, operating income was $34.9
million, an increase of $3.7 million, or 11.9%, over operating income of
$31.2 million for the first half of fiscal 1996. Comparisons of net
earnings between fiscal 1997 and 1996 second quarters were adversely
affected by the absence in fiscal 1997 of $700,000 of gains on disposition
of property and equipment otherwise recognized in fiscal 1996. In
addition, the Company realized reduced investment income in the fiscal
1997 second quarter compared to the fiscal 1996 second quarter when the
Company was still investing the proceeds from the sale of its Applebee's
restaurants and increased interest expense in fiscal 1997 associated with
the Company's higher long-term debt levels compared to the same period
last year, pursuant to the Company's strategy to "lock-in" favorable long-
term interest rates.
Motels
Total revenues for the second quarter of fiscal 1997 for the
motel division were $30.4 million, an increase of $2.6 million, or 9.3%,
compared to $27.8 million in the same period in fiscal 1996. Total
revenues for the first half of fiscal 1997 for the motel division were
$64.4 million, an increase of $6.0 million, or 10.3%, compared to $58.4
million in the first half of fiscal 1996. The motel division's operating
income for the fiscal 1997 second quarter totaled $8.8 million, a decrease
of $100,000, or 1.3%, from the $8.9 million earned by the division in the
same period of fiscal 1996. The motel division's operating income for the
first half of fiscal 1997 totaled $21.8 million, an increase of $1.1
million, or 5.5%, over the $20.7 million earned by the division in the
same period of fiscal 1996.
Compared to the end of the second quarter of fiscal 1996, there
were 11 new Company-owned or operated and five new franchised Budgetel
Inns in operation at the end of the fiscal 1997 second quarter. The
Company's newly opened motels contributed additional revenues of $1.9
million to the division's fiscal 1997 second quarter revenues. The
Company's comparative occupancy rates were slightly lower early in the
second quarter of fiscal 1997, but strengthened later in the quarter. The
Company believes that a temporary decline in demand, combined with
increasing industry segment room supply, contributed to the decline.
Increased average daily room rates at the Company's continuing motels
during the second quarter of fiscal 1997 compared to the same period last
year partially offset the lower occupancy rates. Start-up expenses
associated with new motels and increased advertising costs contributed to
the slight decline in operating income despite increased revenues.
At the end of the fiscal 1997 second quarter, the Company owned
or operated 98 Budgetel Inns and franchised an additional 35 Inns,
bringing the total number of Budgetel Inns in operation to 133. In
addition, there are currently 16 Company-owned or franchised Budgetel Inns
under construction, all of which are scheduled to open before the end of
fiscal 1997 or shortly thereafter. The Company also owns and operates
three Woodfield Suites all-suite motels and plans to open a fourth
location in Cincinnati, Ohio during the third quarter of fiscal 1997 and a
fifth location in Madison, Wisconsin in early fiscal 1998. During the
second quarter of fiscal 1997, the Company announced its goal of
increasing the number of Woodfield Suites in operation to 40 to 50
properties within the next five years. The Company expects the increase
to be achieved through new company-owned units, acquisitions and the
introduction of a franchise program.
Theatres
The theatre division's fiscal 1997 second quarter revenues were
$11.9 million, an increase of $1.8 million, or 18.5%, over revenues of
$10.1 million in the same period in fiscal 1996. Operating income for the
second quarter in fiscal 1997 totaled $882,000, a decrease of $900,000, or
50.8%, from operating income of $1.8 million in the same period last year.
The theatre division's fiscal 1997 first half revenues were $32.5 million,
an increase of $3.5 million, or 12.1%, over revenues of $29.0 million in
the first half of fiscal 1996. Operating income for the first half of
fiscal 1997 was $5.8 million, a decrease of $1.2 million, or 16.6%, from
$7.0 million of operating income in the first half of fiscal 1996.
Consistent with the seasonality of the motion picture exhibition industry,
the second quarter of the Company's fiscal year is typically the slowest
period for its theatre division.
Theatre division operating income declined due to higher pre-
opening and start-up costs, especially for advertising and training,
coupled with weak film product in late August, September and October. The
higher start-up costs were the result of the first quarter opening of two
new theatre complexes, the acquisition of three theatres and the
introduction of the division's new family entertainment center. The
Company added 47 new screens in the first quarter of fiscal 1997 and none
in the second quarter, ending the second quarter with a total of 266
screens compared to 204 at the end of the same period last year. The
Company opened it's largest complex, a 20-screen ultraplex in Addison,
Illinois, on the first day of the third quarter of fiscal 1997. In
addition, the Company currently has 13 additional screens under
construction at existing theatres.
Total box office receipts for the fiscal 1997 first half were
$22.0 million, an increase of $1.7 million, or 8.2%, over $20.3 million in
the same period last year. The increase in box office receipts for the
first half of fiscal 1997 compared to the same period in the prior year
was entirely due to the additional new screens, together with a 4.5%
increase in first-run theatre average ticket prices and a 5.8% increase in
concession revenues per person. Without the additional screens, theatre
attendance would have decreased for the first half and second quarter
largely as a result of the less attractive film offerings during the
period. The impact of the 1996 Summer Olympics significantly affected
attendance late in the first quarter and the effect carried over into the
second quarter as well. Motion picture film distributors anticipated
lower theatre attendance during the Olympics and featured their best films
during the late spring and early summer to avoid competing with the
Olympics. This strategy meant that less attractive films were distributed
in late summer and early fall, with the result being a lack of quality
carryovers into the Company's fiscal second quarter, which began in mid-
August. Theatre attendance is largely dependent upon the audience appeal
of available films, a factor over which the Company has limited control.
Hotels and Resorts
Total revenues from the hotels and resorts division during the
second quarter of fiscal 1997 increased by $1.6 million, or 11.4%, to
$16.0 million, compared to $14.4 million in the previous year's comparable
period. Operating income increased by $1.7 million, or 93.5%, to $3.5
million in the fiscal 1997 second quarter, compared to $1.8 million in the
second quarter of fiscal 1996. Total revenues from the hotels and resorts
division during the first half of fiscal 1997 totaled $32.5 million, an
increase of $1.7 million, or 5.6%, over total first half revenues of $30.7
million in fiscal 1996. Operating income increased by $1.9 million in the
first half of fiscal 1997, or 36.6%, to $7.2 million, compared to $5.3
million in the prior year's first half.
Higher average room rates at the Company's hotels contributed to
the increases in the fiscal 1997 periods compared to the prior year's
periods. The division's fiscal 1997 second quarter and first half results
also benefitted from reduced charges for pre-opening costs for the
Milwaukee Hilton (formerly the Marc Plaza) and increased management fees
from properties managed but not owned by the hotels and resorts division.
Restaurants
Restaurant division revenues totaled $6.3 million for the second
quarter of fiscal 1997, an increase of $700,000, or 12.6%, over fiscal
1996 second quarter revenues of $5.6 million. The division's operating
income for the fiscal 1997 second quarter totaled $673,000, an increase of
$542,000, or 413.7%, over operating income of $131,000 in the second
quarter of fiscal 1996. Restaurant division revenues totaled $13.1
million for the first half of fiscal 1997, an increase of $100,000, or
0.9%, over first half fiscal 1996 revenues of $13.0 million. Excluding
$1.1 million of revenues from subsequently sold or closed restaurants from
fiscal 1996 revenues, first half fiscal 1997 revenues increased 9.9% over
the prior year. The division's operating income for the first half of
fiscal 1997 totaled $1.3 million, an increase of $940,000, or 241.6%, over
fiscal 1996 first half operating income of $389,000.
The increases in revenues and operating income for both the
second quarter and first half of fiscal 1997, compared to the same prior
periods, were primarily the result of recent successful KFC product
introductions and increased sales from KFC's home delivery program,
combined with reduced administrative costs related to the disposition of
Applebee's and other restaurant properties last year. Same store KFC
revenues for the second quarter of fiscal 1997 compared to the prior
year's second quarter were up 8.3%, with guest counts at same store KFC's
up 3.0% and average guest check amounts up 5.2%. The Company has plans to
convert and open its first 2-in-1 KFC/Taco Bell restaurant in the fourth
quarter of fiscal 1997.
FINANCIAL CONDITION
The Company's lodging, movie theatre and restaurant businesses
each generate significant and consistent daily amounts of cash because
each segment's revenue is derived predominantly from consumer cash
purchases. The Company believes that these consistent and predictable
cash sources, together with the availability to the Company of $80 million
of unused credit lines at the end of the second quarter, should be
adequate to support the ongoing operational liquidity needs of the
Company's businesses.
Net cash provided by operating activities increased by $21.5
million during the first half of fiscal 1997 to $37.6 million, compared to
$16.1 million in the prior year's first half. The increase over the same
period last year was primarily the result of approximately $10 million of
income taxes incurred on the gain on the sale of restaurants in fiscal
1996, combined with increased net earnings before the restaurant gain.
Timing differences in receipts of accounts and notes receivable and
payment of accounts payable contributed to the increase in net cash
provided by operating activities as well.
Net cash used in investing activities in the fiscal 1997 first
half totaled $60.0 million, compared to the positive cash flow of $14.7
million in the fiscal 1996 first half which resulted from receiving $48.3
million in net cash proceeds from the June 1995 sale of its Applebee's
restaurants and related rights. Capital expenditures to support the
Company's continuing expansion program totaled $60.1 million in the first
half of fiscal 1997 compared to $36.7 million in the prior year's first
half.
Cash provided by financing activities in the fiscal 1997 first
half totaled $44.0 million, compared to cash used in financing activities
of $26.0 million in the first half of fiscal 1996. During the fiscal 1997
first half, the Company received $97.9 million of net proceeds from the
issuance of notes payable and long-term debt, compared to none in the
first half of fiscal 1996. The lack of proceeds in fiscal 1996 was due to
the Company's use of cash proceeds from its Applebee's sale to fund
expansion during that time period. Included in the fiscal 1997 proceeds
was $85 million in principal amount of senior unsecured long-term notes
issued in a private placement to six institutional lenders. The Company
has the ability to issue up to $115 million of additional senior notes
under the private placement program over the next thirty months. The
Company used a portion of the proceeds from the senior notes to pay off
existing debt, resulting in total principal payments on notes payable and
long-term debt of $52.4 million in the first half of fiscal 1997, compared
to only $21.1 million in the same period last year. The Company expects
to use the remaining proceeds to help fund the Company's ongoing expansion
plans.
In addition to the changes in debt transactions noted above, net
cash provided by financing activities also increased due to dividend
payments of only $1.4 million in the first half of fiscal 1997 compared to
$5.0 million in the first half of fiscal 1996. The reduction in dividend
payments for the period was the result of a one-time timing difference
between the Company's quarterly dividend payments in fiscal 1997 compared
to an annual dividend payment made in fiscal 1996. Total fiscal 1997
dividend payments are expected to exceed fiscal 1996 dividend payments.
The actual timing and extent of the implementation of the
Company's current expansion plans will depend in large part on continuing
favorable industry and general economic conditions, the competitive
environment, evolving customer needs and trends and the availability of
attractive opportunities. It is likely that the Company's current
expansion goals will continue to evolve and change in response to these
and other factors.
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Company's 1996 annual meeting of shareholders was held on
Thursday, September 26, 1996 ("Annual Meeting"). At the Annual Meeting,
the following matters were voted on in person or by proxy, and approved by
the Company's shareholders:
1. The shareholders voted to elect Ben Marcus, Stephen H. Marcus,
Diane Marcus Gershowitz, George R. Slater, Lee Sherman Dreyfus,
John L. Murray, Daniel F. McKeithan, Jr., Allan H. Selig and
Timothy E. Hoeksema to the Company's Board of Directors for one-
year terms to expire at the Company's 1997 annual meeting of
shareholders and until their successors are duly qualified and
elected.
As of the August 9, 1996 record date for the Annual Meeting ("Record
Date"), 10,816,145 shares of Common Stock and 8,856,405 shares of Class B
Common Stock were outstanding and eligible to vote, with the Common Stock
entitled to one vote per share and the Class B Common Stock entitled to
ten votes per share. Following are the final votes on the matters
presented for shareholder approval at the Annual Meeting:
Election of Directors
For Withheld
Percentage Percentage
Name Votes (1) Votes (1)
Lee Sherman Dreyfus 89,858,718 99.98% 17,632 0.02%
Diane Marcus Gershowitz 89,862,807 99.98% 13,543 0.02%
Timothy E. Hoeksema 89,861,864 99.98% 14,486 0.02%
Stephen H. Marcus 89,862,888 99.99% 13,462 0.01%
Daniel F. McKeithan,
Jr. 89,862,914 99.99% 13,436 0.01%
John L. Murray 89,858,830 99.98% 17,520 0.02%
Bruce J. Olson 89,863,230 99.99% 13,120 0.01%
Allan H. Selig 89,855,182 99.98% 21,168 0.02%
George R. Slater 89,858,830 99.98% 17,520 0.02%
____________
(1) Based on a total of 89,876,350 votes represented by shares of Common
Stock and Class B Common Stock actually voted in person or by proxy
at the Annual Meeting.
No other matters were brought before the Annual Meeting for a shareholder
vote.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
Exhibit 4.1. The Marcus Corporation Note Purchase
Agreement, dated October 25, 1996.
Exhibit 27. Financial Data Schedule
b. Reports on Form 8-K
None.
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
(Registrant)
DATE: December 23, 1996 By: \s\ Stephen H. Marcus
Stephen H. Marcus,
Chairman of the Board, President and
Chief Executive Officer
DATE: December 23, 1996 By: \s\ Douglas A. Neis
Douglas A. Neis
Chief Financial Officer and Treasurer
THE MARCUS CORPORATION
FORM 10-Q
FOR THE
24 - WEEKS ENDED NOVEMBER 14, 1996
EXHIBIT INDEX
Exhibit Description
4.1 The Marcus Corporation Note Purchase Agreement, dated
October 25, 1996.
27 Financial Data Schedule