-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ABR+KwgNpsCf8M2YXJP4Z9NCQY+0l8lx4eqpmtPmFfWUMqzGSflPP88QMdevHprd vqObziqYp9EiwmmwaSq6xA== 0000897069-98-000499.txt : 19981014 0000897069-98-000499.hdr.sgml : 19981014 ACCESSION NUMBER: 0000897069-98-000499 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980827 FILED AS OF DATE: 19981013 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARCUS CORP CENTRAL INDEX KEY: 0000062234 STANDARD INDUSTRIAL CLASSIFICATION: HOTELS & MOTELS [7011] IRS NUMBER: 391139844 STATE OF INCORPORATION: WI FISCAL YEAR END: 0529 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-12604 FILM NUMBER: 98724682 BUSINESS ADDRESS: STREET 1: 250 EAST WISCONSIN AVE STREET 2: SUITE 1700 CITY: MILWAUKEE STATE: WI ZIP: 53202-4220 BUSINESS PHONE: 4142726020 MAIL ADDRESS: STREET 1: 250 EAST WISCONSIN AVENUE STREET 2: STE 1700 CITY: MILWAUKEE STATE: WI ZIP: 53202-4220 10-Q 1 QUARTERLY REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended August 27, 1998 --------------- [ ] 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, Suite 1700 Milwaukee, Wisconsin 53202 - --------------------------------------------- -------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (414) 905-1000 -------------- 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 SEPTEMBER 30, 1998 - 18,520,585 CLASS B COMMON STOCK OUTSTANDING AT SEPTEMBER 30, 1998 - 12,668,928 1 THE MARCUS CORPORATION ---------------------- INDEX PART I - FINANCIAL INFORMATION Page Item 1. Consolidated Financial Statements: Balance Sheets (August 27, 1998 and May 28, 1998)............................. 3 Statements of Earnings (Thirteen weeks ended August 27, 1998, twelve weeks ended August 21, 1997 (as reported) and thirteen weeks ended August 28, 1997 (pro forma).............................. 5 Statements of Cash Flows (Thirteen weeks ended August 27, 1998 and twelve weeks ended August 21, 1997)........................................ 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 6. Exhibits and Reports on Form 8-K............................. 13 Signatures................................................... 14 2 PART I - FINANCIAL INFORMATION Item 1. Financial Statements THE MARCUS CORPORATION Consolidated Balance Sheets (Unaudited) (Audited) August 27, May 28, 1998 1998 ----------- ---------- (in thousands) ASSETS Current assets: Cash and cash equivalents $3,000 $4,678 Accounts and notes receivable 16,701 14,294 Receivables from joint ventures 1,307 1,288 Refundable income taxes - 4,385 Other current assets 2,999 3,773 ----------- ----------- Total current assets 24,007 28,418 Property and equipment: Land and improvements 84,929 85,282 Buildings and improvements 459,601 440,737 Leasehold improvements 9,378 9,355 Furniture, fixtures and equipment 190,664 187,341 Construction in progress 23,042 27,510 ----------- ----------- Total property and equipment 767,614 750,225 Less accumulated depreciation and amortization 195,351 190,229 ----------- ----------- Net property and equipment 572,263 559,996 Other assets: Investments in joint ventures 1,761 1,496 Other 18,566 18,594 ----------- ----------- Total other assets 20,327 20,090 ----------- ----------- TOTAL ASSETS $616,597 $608,504 =========== =========== See accompanying notes to consolidated financial statements. 3 THE MARCUS CORPORATION Consolidated Balance Sheets (Unaudited) (Audited) August 27, May 28, 1998 1998 (in thousands) LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Notes payable $5,218 $5,255 Accounts payable 18,133 26,385 Income taxes 3,360 - Taxes other than income taxes 11,725 11,404 Accrued compensation 4,264 2,643 Other accrued liabilities 15,479 10,072 Current maturities on long-term debt 10,411 10,277 ------- -------- Total current liabilities 68,590 66,036 Long-term debt 200,582 205,632 Deferred income taxes 27,380 26,479 Deferred compensation and other 8,528 7,826 Shareholders' equity: Preferred Stock, $1 par; authorized 1,000,000 shares; none issued Common Stock, $1 par; authorized 50,000,000 shares; issued 18,519,345 shares at August 27, 1998, 18,511,866 shares at May 28, 1998 18,520 18,512 Class B Common Stock, $1 par; authorized 33,000,000 shares; issued and outstanding 12,670,168 at August 27, 1998, 12,677,656 at May 28, 1998 12,670 12,678 Capital in excess of par 40,387 40,265 Retained earnings 248,072 235,708 -------- -------- 319,649 307,163 Less cost of Common Stock in treasury (1,128,405 shares at August 27, 1998 and 944,544 shares at May 28, 1998) 8,132 4,632 ------- ------- Total shareholders' equity 311,517 302,531 ------- ------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $616,597 $608,504 ========= ========= See accompanying notes to consolidated financial statements. 4 THE MARCUS CORPORATION Consolidated Statements of Earnings (Unaudited) (As reported) (Pro forma)(1) 13 Weeks Ended 12 Weeks Ended 13 Weeks Ended Aug. 27, 1998 Aug. 21, 1997 Aug. 28, 1997 ------------- ------------- ------------- (in thousands, except per share data) Revenues: Rooms and telephone $52,049 $47,048 $50,421 Theatre operations 33,179 23,580 24,705 Food and beverage 13,870 12,546 13,513 Other income 8,262 6,879 7,472 --------- ---------- ----------- Total revenues 107,360 90,053 96,111 Costs and expenses: Rooms and telephone 18,650 15,741 17,179 Theatre operations 19,374 14,283 15,002 Food and beverage 9,269 8,380 9,009 Advertising and marketing 6,515 5,415 5,891 Administrative 9,753 7,836 8,414 Depreciation and amortization 9,245 7,226 7,882 Rent 1,038 1,069 1,103 Property taxes 3,474 2,713 2,868 Other operating expenses 3,944 3,185 3,319 --------- --------- ---------- Total costs and expenses 81,262 65,848 70,667 --------- --------- ---------- Operating income 26,098 24,205 25,444 Other income (expense): Investment income 176 349 388 Interest expense (4,016) (2,765) (3,037) Gain on disposition of property and equipment 1,387 (1) 1 -------- ---------- ---------- (2,453) (2,417) (2,648) -------- ---------- ---------- Earnings before income taxes 23,645 21,788 22,796 Income taxes 9,454 8,723 9,127 ======== ========== ========== Net earnings $14,191 $13,065 $13,669 ======== ========== ========== Net earnings per share(2): Basic $0.47 $0.44 $0.46 Diluted $0.47 $0.44 $0.46 Weighted Average Shares Outstanding(2): Basic 30,201 29,601 29,603 Diluted 30,362 29,840 29,842 (1) Pro forma information is presented as if the prior year had been reported on the new 13-week basis. (2) All per share and shares outstanding data have been adjusted to reflect the 50% stock dividend distributed on December 5, 1997. See accompanying notes to consolidated financial statements. 5 THE MARCUS CORPORATION Consolidated Statements of Cash Flows (Unaudited) 13 Weeks 12 Weeks Ended Ended Aug. 27, 1998 Aug. 21, 1997 ------------- ------------- (in thousands) OPERATING ACTIVITIES: Net earnings $14,191 $13,065 Adjustments to reconcile net earnings to net cash provided by operating activities: Earnings on investments in joint ventures, net of distributions (265) 9 (Gain) loss on disposition of property and equipment (1,387) 1 Depreciation and amortization 9,245 7,226 Deferred income taxes 901 250 Deferred compensation and other 702 1,283 Changes in assets and liabilities: Accounts and notes receivable (2,407) (4,478 Other current assets 774 (125 Accounts payable (8,252) 6,537 Income taxes 7,745 6,898 Taxes other than income taxes 321 1,434 Accrued compensation 1,621 1,739 Other accrued liabilities 5,407 1,949 ------- ------ Total adjustments 14,405 22,723 ------- ------ Net cash provided by operating activities 28,596 35,788 INVESTING ACTIVITIES: Capital expenditures (21,762) (18,266 Net proceeds from disposals of property, equipment and other assets 1,760 - (Increase) decrease in other assets (317) 721 Cash received from (advanced to) joint ventures (19) 29 --------- ------- Net cash used in investing activities (20,338) (17,516) FINANCING ACTIVITIES: Debt transactions: Net proceeds from issuance of notes payable and long-term debt 576 - Principal payments on notes payable and long-term debt (5,529) (3,136) Equity transactions: Treasury stock transactions, except for stock options (3,805) (88 Exercise of stock options 425 384 Dividends paid (1,603) (1,516) --------- -------- Net cash used in financing activities (9,936) (4,356) --------- -------- Net increase (decrease) in cash and cash equivalents (1,678) 13,916 Cash and cash equivalents at beginning of year 4,678 7,991 --------- ------- Cash and cash equivalents at end of period $3,000 $21,907 ========= ======= See accompanying notes to consolidated financial statements. 6 THE MARCUS CORPORATION CONDENSED NOTES TO FINANCIAL STATEMENTS FOR THE THIRTEEN WEEKS ENDED AUGUST 27, 1998 (Unaudited) A. Refer to the Company's audited financial statements (including footnotes) for the fiscal year ended May 28, 1998, contained in the Company's Form 10-K Annual Report for such fiscal year, for a description of the Company's accounting policies. B. Beginning in fiscal 1999, the Company is dividing its fiscal year into three 13-week quarters and a final quarter consisting of 13 or 14 weeks. Previously, the Company's fiscal year consisted of three 12-week quarters and a fourth quarter of 16 or 17 weeks. Comparative results for the first quarter of fiscal 1998 are presented on a pro forma basis, as if the quarter had been reported on the new basis. C. The consolidated financial statements for the thirteen weeks ended August 27, 1998, twelve weeks ended August 21, 1997 and pro forma thirteen weeks ended August 28, 1997 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 August 27, 1998, and for all periods presented, have been made. 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 December 5, 1997, to all holders of Common Stock and Class B Common Stock. All per share and weighted average shares outstanding data prior to December 5, 1997, have been adjusted to reflect this dividend. 7 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," Aexpects@ 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 may 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 Marcus Corporation and its four divisions report their consolidated and individual segment results of operations on a 52-or 53-week fiscal year ending on the last Thursday in May. Fiscal 1999 will be a 52-week year for the Company and each of its divisions. Fiscal 1998 was a 53-week fiscal year for the Company's restaurant division, while the Company and its other remaining divisions reported a 52-week year in fiscal 1998. Historically, the Company's fiscal year has been divided into three 12-week quarters and a final quarter consisting of 16 or 17 weeks. Beginning in fiscal 1999, the Company will divide its fiscal year into three 13-week quarters and a final quarter consisting of 13 or 14 weeks. The Company has made this change in order to simplify its reporting process and provide greater consistency between quarters. To facilitate comparisons with fiscal 1999 quarterly results, comparative results for the first quarter of fiscal 1998 are presented on a pro forma basis, as if the quarter had been reported on the new basis. Revenues for the first quarter of fiscal 1999 ended August 27, 1998, totaled $107.4 million, an increase of $11.2 million, or 11.7%, from pro forma revenues of $96.1 million for the first quarter of fiscal 1997. Revenues reported for the 12-week quarter ended August 21, 1997 totaled $90.1 million. All four operating segments contributed to the increase in revenues this past quarter, with the theatre division contributing the largest increase over the prior year. 8 Net earnings for the first quarter of fiscal 1999 were $14.2 million, or $.47 per share, up 3.8% and 2.2%, respectively, from pro forma net earnings of $13.7 million, or $.46 per share, for the same quarter during the prior year. Net earnings reported for the 12-week quarter ended August 21, 1997 were $13.1 million, or $.44 per share. All earnings per share data have been adjusted to reflect the three-for-two stock split effected in the form of a 50% stock dividend on December 5, 1997. The Company adopted SFAS No. 128, "Earnings Per Share," in fiscal 1998. Prior period amounts have been restated under the new standard. All per share data presented herein is on a diluted basis. Operating income (earnings before other income/expense and income taxes) totaled $26.1 million during the first quarter of fiscal 1999, an increase of $650,000, or 2.6%, compared to the pro forma prior year same period. The Company's interest expense, net of investment income, totaled $3.8 million for the first quarter of fiscal 1999, compared to $2.4 million during the same period last year on a pro forma basis. This increase was the result of increased long-term debt levels necessary to help finance the Company's capital program, combined with reduced investment income and capitalized interest. The Company is conducting a review of its computer systems to identify those areas that may be affected by the Year 2000 issue and is developing an implementation plan to resolve the issue. The Company expects the project to be substantially complete by early 1999 and does not, at this time, expect this project to have a significant effect on the business, results of operations or financial condition of the Company. The Company began converting critical accounting and data processing systems in fiscal 1998 in the normal course of business and expects that the new systems will provide business benefits in addition to being ready for the Year 2000. The Company is also assessing the impact of this issue with its key vendors and suppliers. Limited-Service Lodging Total revenues for the first quarter of fiscal 1999 for the limited-service lodging division were $41.9 million, an increase of $200,000, or 0.6%, compared to pro forma revenues of $41.7 million during the same period in fiscal 1998. The limited-service lodging division's operating income for the fiscal 1999 first quarter totaled $12.8 million, a decrease of $1.0 million, or 7.2%, from pro forma operating income of $13.8 million during the same period of fiscal 1998. The division reported revenues of $38.7 million and operating income of $13.0 million for the 12-week quarter ended August 21, 1997. Compared to the end of the first quarter of fiscal 1998, one new Company-owned or operated and 15 new franchised Budgetel/Baymont Inns were in operation at the end of the fiscal 1999 first quarter. The Company's newly opened Budgetel Inns contributed additional revenues of $700,000 to the division's fiscal 1999 first quarter revenues. The Company experienced lower occupancy rates and higher average daily room rates for comparable Budgetel Inns during the first quarter of fiscal 1999, compared to the same quarter last year. The result of the occupancy decline and average daily rate increases was a 0.9% increase in the division's revenue per available room, or RevPAR, for comparable Budgetel Inns during the fiscal 1999 first quarter. 9 The limited-service lodging division's results continue to be impacted by the increased limited service segment room supply, resulting in minimal RevPAR growth and pressure on the division's operating margin. Reduced occupancy percentages, combined with increased payroll costs in a tight labor market and increased administrative costs associated with the Company's recent expansion program, have contributed to the lower operating margins. The Company expects these trends to continue during the fiscal 1999 second quarter. During the first quarter of fiscal 1999, the Company continued to prepare for its previously announced name change of its Budgetel Inns to Baymont Inns and Baymont Inns & Suites. Completion of the repositioning to Baymont has been extended to January 1999 in response to previously unanticipated delays in completing the necessary signage for all properties and to ensure that the quality and consistency of new features and amenities will be uniform throughout the chain when the name change becomes effective. At the end of the fiscal 1999 first quarter, the Company owned or operated 106 Budgetel/Baymont Inns and franchised an additional 55 Inns, bringing the total number of Budgetel/Baymont Inns in operation to 161. In addition, there are currently 22 franchised locations under construction or in development, all of which are scheduled to open in fiscal 1999 or shortly thereafter. The Company also owns and operates five Woodfield Suites all-suite motels. Two company-owned Woodfield Suites are currently under construction. Theatres The theatre division's fiscal 1999 first quarter revenues were $33.3 million, an increase of $8.5 million, or 34.1%, over pro forma revenues of $24.8 million during the same fiscal 1998 period. Operating income for the first quarter of fiscal 1999 totaled $8.1 million, an increase of $2.5 million, or 44.8%, over pro forma operating income of $5.6 million during the same period last year. The division reported revenues of $23.7 million and operating income of $5.5 million for the 12-week quarter ended August 21, 1997. Total box office receipts for the fiscal 1999 first quarter were $22.4 million, an increase of $5.8 million, or 34.9%, over pro forma box office receipts of $16.6 million during the same period last year. The increase in box office receipts for the first quarter of fiscal 1999 compared to the same period during the prior year was due to 77 additional screens, a strong summer season of movies and continued popularity of stadium seating, together with a 3.4% increase in average ticket prices. Vending revenues for the fiscal 1999 first quarter totaled $10.2 million, an increase of $2.8 million, or 37.0%, over pro forma vending revenues of $7.4 million during the same quarter last year. The increase in vending revenues was due to increased theatre attendance and a 4.8% increase in average concession sales per person compared to the same quarter last year. Total theatre attendance increased 30.5% over pro forma total attendance during the same quarter last year. Attendance at the Company's comparable locations increased 8.7% during the fiscal 1999 first quarter, compared to the prior year same quarter. Revenues for the theatre business and the motion picture industry in general are heavily dependent upon the general audience appeal of available films, together with studio marketing, advertising and support campaigns, factors over which the Company has no control. 10 The Company opened 16 new screens at existing theatres and closed three screens in the first quarter of fiscal 1999, ending the first quarter with a total of 374 total screens in 45 theatres compared to 297 screens in 40 theatres at the end of the same period last year. Early in the second quarter of fiscal 1999, the Company closed three more screens and opened a new 17-screen ultraplex, including its first IMAX(R) theatre, in suburban Columbus, Ohio. The Company currently has 38 additional screens either under construction or about to go under construction this fall, including a new 15-screen ultraplex in the Minneapolis metropolitan area. During the first quarter of fiscal 1999, the Company also continued to retrofit existing theatres with stadium seating. The Company's goal is to add stadium seating to a majority of its existing screens by the end of fiscal 2000. The Company expects to begin construction shortly on its second IMAX(R) theatre at the 20-screen Marcus Cinemas of Addison, Illinois and expects to commence construction on up to 23 additional screens by the end of the fiscal year. The Company is also pursuing additional acquisition opportunities. Hotels and Resorts Total revenues from the hotels and resorts division during the first quarter of fiscal 1999 increased by $2.4 million, or 10.8%, to $24.2 million, compared to pro forma revenues of $21.8 million in the previous year's comparable period. Operating income decreased by $1.1 million, or 16.3%, to $5.3 million during the fiscal 1999 first quarter, compared to pro forma operating income of $6.4 million during the first quarter of fiscal 1998. The division reported revenues of $20.3 million and operating income of $6.0 million for the 12-week quarter ended August 21, 1997. Revenues from the Company's new Miramonte Resort in Indian Wells, California and improved RevPAR at all three of the Company's comparable owned hotels contributed to the revenue increases in the fiscal 1999 period compared to the prior year's period. The division's total RevPAR for comparable properties increased 9.0% during fiscal 1999's first quarter compared to the same quarter last year. Operating income increased at all three comparable owned properties as well. Total division operating income was negatively impacted in the first quarter of fiscal 1999 by approximately $300,000 of pre-opening cost amortization and anticipated start-up operating losses at the Miramonte during the traditionally slow summer season in the Palm Springs desert area. The Company expects the Miramonte to continue to have a negative impact on division operating income during the second and third quarters of fiscal 1999 until pre-opening costs are fully amortized and the property operates its first complete peak season. The Company began construction early in the second quarter of fiscal 1999 on a 250-room expansion of the Milwaukee Hilton, which will be connected to Milwaukee's newly opened Midwest Express Convention Center and will create the largest hotel in Wisconsin. The addition is currently scheduled to open in 2000. Madison's City Council recently approved the development agreement for the division's new Company-owned Monona Terrace Hilton in Madison, Wisconsin. Projected completion of the property, which will be connected to the city's new Monona Terrace Convention Center, is in the fall of 2000. 11 Restaurants Restaurant division revenues totaled $7.8 million for the first quarter of fiscal 1999, an increase of $100,000, or 1.4%, over fiscal 1998 pro forma first quarter revenues of $7.7 million. The division's operating income for the fiscal 1999 first quarter totaled $1.0 million, a decrease of $100,000, or 11.9%, from pro forma operating income of $1.1 million during the first quarter of fiscal 1998. The division reported revenues of $7.3 million and operating income of $1.0 million for the 12-week quarter ended August 21, 1997. Total division operating income declined slightly during the fiscal 1999 first quarter compared to the prior year's same period due to a one-time insurance adjustment from a prior claim that was settled during the quarter. Excluding the insurance adjustment, the Company's KFC restaurants reported increases in revenue and operating income due in part to expanded lunch and snack business and the continuing success of the division's first 2-in-1 KFC/Taco Bell restaurant in Milwaukee. Two additional 2-in-1 combination restaurant conversions are under development and are expected to open late in the third quarter of fiscal 1999. 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 $37 million of unused credit lines at the end of the first quarter, should be adequate to support the ongoing operational liquidity needs of the Company's businesses. Net cash provided by operating activities decreased by $7.2 million during the 13-week first quarter of fiscal 1999 to $28.6 million, compared to $35.8 million during the prior year's 12-week first quarter. The decrease compared to the same period last year was primarily the result of timing differences in payments of accounts payable, offset by increased net earnings and depreciation/amortization. Net cash used in investing activities during the fiscal 1999 first quarter totaled $20.3 million, compared to $17.5 million during the fiscal 1998 12-week first quarter. Capital expenditures to support the Company's continuing expansion program totaled $21.8 million during the first quarter of fiscal 1999 compared to $18.3 million during the prior year's reported first quarter. The majority of the capital expenditures during the fiscal 1999 first quarter were incurred in the theatre division to fund new theatres, screen additions to existing theatres, stadium seating retrofits and construction of the Company's first IMAX(R) theatre. Cash used in financing activities during the fiscal 1999 first quarter totaled $9.9 million, compared to $4.4 million during the 12-week first quarter of fiscal 1998. During the fiscal 1999 first quarter, the Company repurchased 241,000 of its common shares in the open market pursuant to its long-standing existing repurchase program, resulting in the increased cash used in financing activities. An additional 98,000 common shares were repurchased early in the fiscal 1999 second quarter. The Company announced in the second quarter of fiscal 1999 that its Board of Directors had authorized the repurchase of up to 1 million additional shares of the Company's outstanding common stock. The repurchases are expected to be executed on the open market or in privately negotiated transactions depending upon a number of factors, including prevailing market conditions. 12 The Company's long-term debt decreased slightly during the first quarter of fiscal 1999. The Company expects to issue additional long-term debt to help fund the Company's ongoing expansion plans in fiscal 1999. The Company has the ability to issue up to $85 million of additional senior notes under a private placement program through February 1999. 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. Item 6. Exhibits and Reports on Form 8-K a. Exhibits Exhibit 27. Financial Data Schedule b. Reports on Form 8-K No Form 8-K was filed by the Company during the quarter to which this Form 10-Q relates. 13 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: October 12, 1998 By: /s/ Stephen H. Marcus ------------------------------------------------- Stephen H. Marcus, Chairman of the Board, President and Chief Executive Officer DATE: October 12, 1998 By: /s/ Douglas A. Neis ------------------------------------------------- Douglas A. Neis Chief Financial Officer and Treasurer 14 THE MARCUS CORPORATION FORM 10-Q FOR 13 WEEKS ENDED AUGUST 27, 1998 EXHIBIT INDEX Exhibit Description 27 Financial Data Schedule EX-27 2 ARTICLE 5 OF REG. S-X
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MARCUS CORPORATION'S FINANCIAL STATMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS MAY-27-1999 MAY-29-1998 AUG-27-1998 3,000 0 18,008 0 0 24,007 767,614 195,351 616,597 68,590 200,582 0 0 31,190 280,327 616,597 99,098 107,360 47,293 81,262 0 0 4,016 23,645 9,454 14,191 0 0 0 14,191 .47 .47
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