On this page of StockholderLetter.com we present the 3/31/2023 shareholder letter from MARCUS CORP — ticker symbol MCS. Reading current and past MCS letters to shareholders can bring important insights into the investment thesis.
A N N UAL REPORT 2022
DEAR SHAREHOLDERS, Since 1935, the growth and success of The Marcus Corporation has been driven by our founding principles of maintaining a strong financial position, owning our real estate assets, focusing on quality and value, managing for the long term and building shareholder value. While the pandemic and its lingering effects created unprecedented challenges in both our businesses, significant year-over-year improvements at Marcus Hotels & Resorts and Marcus Theatres prove that these principles withstand the tests of time and adversity. ROAD TO RECOVERY From the depths of the pandemic to where we sit today, we have consistently said that our path to full recovery is not linear. Yet in fiscal 2022, meaningful and accelerated improvements in both divisions provide our optimism for the future. Our hotels division exceeded expectations, driven by strong performance from all of our company-owned properties. By midyear, Marcus Hotels & Resorts had returned to pre-pandemic revenue levels. And for the full year, the division reported record Adjusted EBITDA. With leisure travel remaining resilient, group and business travel continued to meaningfully improve throughout fiscal 2022. Continuing our focus on driving a strategic approach to investment, we announced the sale of The Skirvin Hilton during the fourth quarter of fiscal 2022, delivering an internal rate of return of over 30% over our 16 year hold. As we look ahead, our portfolio management strategy will remain focused on value maximization as we redeploy capital into our properties and new growth opportunities. Our theatres division also made meaningful progress in fiscal 2022 but at times was held back by a limited quantity of new wide-release film offerings. What was far more encouraging, and ultimately more important, was when we did have compelling films in a wide variety of genres, including blockbusters, family films, comedies and horror movies, we once again saw that moviegoers of all ages and demographics returned to the theatres in huge numbers. We think the most telling statistic is this: In fiscal year 2022, our theatre division revenue was down approximately 27% compared to pre-pandemic levels. The number of new wide-release movies was also down approximately 27% compared to pre-pandemic levels. What this tells us is customers want to see movies on the big screen if there are great new films to enjoy. This also underscores how important an exclusive theatrical window is to the entire ecosystem of film production and distribution. Per-person revenue in both admissions and our industry-leading food and beverage continued to grow throughout the year, and our outperformance again placed Marcus Theatres as one of the topperforming theatre circuits in the United States during fiscal 2022. While there likely will be periodic unevenness in the movie release schedule during fiscal 2023, we expect another year of progress in the industry s recovery as movie production and supply continue to improve. Our theatres division is off to a good start in fiscal 2023, with new and exciting films getting added to the calendar. At the end of fiscal 2022, The Marcus Corporation had approximately $243 million in cash and revolving credit availability, with our debt-to-capitalization ratio at 28%, the lowest it has been since 2019. Our diversified business model and strategy to own a majority of our real estate accelerated our recovery coming out of the pandemic, allowing us to generate significant cash ow to pay down debt and restore our balance sheet to its pre-pandemic condition. With both divisions contributing to our positive operating performance and liquidity, our Board of Directors reinstated the quarterly dividend in the third quarter of fiscal 2022. We are grateful for the support of our shareholders over our many years as a public company. Returning capital to our owners remains a key priority for the future. TEAM OVER TURBULENCE The foundation upon which this Company was built was put in place at our inception over 87 years ago by our founder, Ben Marcus. Ben always said people are our most important asset. That lesson remains relevant today. Whenever we experienced turbulence over the past few years, we were ready, thanks to an incredible team of associates that is grounded in our founding principles. While pandemics, government mandates and film production schedules are outside of our control, there is power in our strong foundation and our people. Our diversified business model, significant real estate ownership, high quality assets, solid balance sheet, experienced team and rewarding guest experiences are all competitive differentiators that sustain us during times of challenge and propel us during opportunities for growth. DECADES OF LEADERSHIP In 2022, we both celebrated meaningful anniversaries with The Marcus Corporation (60 years for Steve, 30 years for Greg). We both like to say we grew up with the Company, with our father and grandfather Ben Marcus paving the way for generations of success. Our business started in the heart of the Depression with just one movie theatre. Today, we are the fourth largest theatre circuit in the United States, and we own or manage 16 hotels, resorts or other properties, operating in nineteen states between our two businesses. While so much has changed since 1935, what has not changed is our commitment to our associates, our guests and our communities. To us, this team is family. And because we are clear about who we are and our purpose ahead, we are built for growing success now and in the years ahead. Gregory S. Marcus President and CEO March 31, 2023 Stephen H. Marcus Chairman
BOARD OF DIRECTORS Stephen H. Marcus (d) Chairman, The Marcus Corporation Allan H. (Bud) Selig (b)* (d) Commissioner Emeritus of Major League Baseball Gregory S. Marcus (d) President and Chief Executive Officer, The Marcus Corporation Bruce J. Olson Retired Senior Vice President, The Marcus Corporation and Retired President, Marcus Theatres Corporation Philip L. Milstein, Lead Director (b) (c)* (d) Principal, Ogden CAP Properties, LLC Brian J. Stark (a)* (b) (d) Former Founding Principal, Chief Executive Officer and Chief Investment Officer, Stark Investments Diane Marcus Gershowitz Real Estate Management and Investments Timothy E. Hoeksema (a) (c) Retired Chairman, President and Chief Executive Officer, Midwest Air Group, Inc. Katherine M. Gehl (a) (c) Former President and Chief Executive Officer, Gehl Foods, Inc. Austin M. Ramirez Chief Executive Officer, Husco COMMITTEES OF THE BOARD: (a) Audit | (b) Compensation | (c) Corporate Governance and Nominating | (d) Finance *Denotes chairman OFFICERS AND EXECUTIVE MANAGEMENT Gregory S. Marcus President and Chief Executive Officer Michael R. Evans President, Marcus Hotels & Resorts Thomas F. Kissinger Senior Executive Vice President, General Counsel and Secretary Kim M. Lueck Chief Information Officer Chad M. Paris Chief Financial Officer and Treasurer Mark A. Gramz President, Marcus Theatres Corporation Steven V. Martin Chief Human Resources Officer
 • shareholder letter icon 3/31/2023 Letter Continued (Full PDF)
 • stockholder letter icon 4/12/2024 MCS Stockholder Letter
 • stockholder letter icon 3/26/2025 MCS Stockholder Letter
 • stockholder letter icon 4/6/2026 MCS Stockholder Letter
 • stockholder letter icon More "Entertainment" Category Stockholder Letters
 • Benford's Law Stocks icon MCS Benford's Law Stock Score = 67


MCS 3/31/2023 Shareholder/Stockholder Letter Transcript:

A N N UAL
REPORT
2022


DEAR SHAREHOLDERS,
Since 1935, the growth and success of The Marcus Corporation has
been driven by our founding principles of maintaining a strong
financial position, owning our real estate assets, focusing on quality
and value, managing for the long term and building shareholder
value. While the pandemic and its lingering effects created
unprecedented challenges in both our businesses, significant
year-over-year improvements at Marcus   Hotels & Resorts and
Marcus Theatres   prove that these principles withstand the tests
of time and adversity.
ROAD TO RECOVERY
From the depths of the pandemic to where we sit today, we have
consistently said that our path to full recovery is not linear. Yet in
fiscal 2022, meaningful and accelerated improvements in both
divisions provide our optimism for the future.
Our hotels division exceeded expectations, driven by strong
performance from all of our company-owned properties. By
midyear, Marcus Hotels & Resorts had returned to pre-pandemic
revenue levels. And for the full year, the division reported record
Adjusted EBITDA. With leisure travel remaining resilient, group
and business travel continued to meaningfully improve
throughout fiscal 2022.
Continuing our focus on driving a strategic approach to investment,
we announced the sale of The Skirvin Hilton during the fourth
quarter of fiscal 2022, delivering an internal rate of return of over 30%
over our 16 year hold. As we look ahead, our portfolio management
strategy will remain focused on value maximization as we redeploy
capital into our properties and new growth opportunities.
Our theatres division also made meaningful progress in fiscal 2022
but at times was held back by a limited quantity of new wide-release
film offerings. What was far more encouraging, and ultimately
more important, was when we did have compelling films in a wide
variety of genres, including blockbusters, family films, comedies and
horror movies, we once again saw that moviegoers of all ages and
demographics returned to the theatres in huge numbers.
We think the most telling statistic is this: In fiscal year 2022, our
theatre division revenue was down approximately 27% compared to
pre-pandemic levels. The number of new wide-release movies was
also down approximately 27% compared to pre-pandemic levels.
What this tells us is customers want to see movies on the big screen
if there are great new films to enjoy. This also underscores how
important an exclusive theatrical window is to the entire ecosystem
of film production and distribution.
Per-person revenue in both admissions and our industry-leading
food and beverage continued to grow throughout the year, and our
outperformance again placed Marcus Theatres as one of the topperforming theatre circuits in the United States during fiscal 2022.
While there likely will be periodic unevenness in the movie release
schedule during fiscal 2023, we expect another year of progress in
the industry   s recovery as movie production and supply continue
to improve. Our theatres division is off to a good start in fiscal 2023,
with new and exciting films getting added to the calendar.
At the end of fiscal 2022, The Marcus Corporation had
approximately $243 million in cash and revolving credit availability,
with our debt-to-capitalization ratio at 28%, the lowest it has
been since 2019. Our diversified business model and strategy to
own a majority of our real estate accelerated our recovery coming
out of the pandemic, allowing us to generate significant cash    ow
to pay down debt and restore our balance sheet to its
pre-pandemic condition.
With both divisions contributing to our positive operating
performance and liquidity, our Board of Directors reinstated the
quarterly dividend in the third quarter of fiscal 2022. We are grateful
for the support of our shareholders over our many years as a public
company. Returning capital to our owners remains a key priority
for the future.
TEAM OVER TURBULENCE
The foundation upon which this Company was built was put
in place at our inception over 87 years ago by our founder, Ben
Marcus. Ben always said    people are our most important asset.   
That lesson remains relevant today. Whenever we experienced
turbulence over the past few years, we were ready, thanks to an
incredible team of associates that is grounded in our founding
principles. While pandemics, government mandates and film
production schedules are outside of our control, there is power in
our strong foundation and our people. Our diversified business
model, significant real estate ownership, high quality assets, solid
balance sheet, experienced team and rewarding guest experiences
are all competitive differentiators that sustain us during times of
challenge and propel us during opportunities for growth.
DECADES OF LEADERSHIP
In 2022, we both celebrated meaningful anniversaries with The
Marcus Corporation (60 years for Steve, 30 years for Greg). We both
like to say we grew up with the Company, with our father and
grandfather Ben Marcus paving the way for generations of success.
Our business started in the heart of the Depression with just one
movie theatre. Today, we are the fourth largest theatre circuit in
the United States, and we own or manage 16 hotels, resorts or
other properties, operating in nineteen states between our two
businesses. While so much has changed since 1935, what has not
changed is our commitment to our associates, our guests and our
communities. To us, this team is family. And because we are clear
about who we are and our purpose ahead, we are built for growing
success now and in the years ahead.
Gregory S. Marcus
President and CEO
March 31, 2023
Stephen H. Marcus
Chairman

BOARD OF DIRECTORS
Stephen H. Marcus (d)
Chairman, The Marcus Corporation
Allan H. (Bud) Selig (b)* (d)
Commissioner Emeritus of Major League Baseball
Gregory S. Marcus (d)
President and Chief Executive Officer,
The Marcus Corporation
Bruce J. Olson
Retired Senior Vice President, The Marcus Corporation and
Retired President, Marcus Theatres Corporation
Philip L. Milstein, Lead Director (b) (c)* (d)
Principal, Ogden CAP Properties, LLC
Brian J. Stark (a)* (b) (d)
Former Founding Principal, Chief Executive Officer and
Chief Investment Officer, Stark Investments
Diane Marcus Gershowitz
Real Estate Management and Investments
Timothy E. Hoeksema (a) (c)
Retired Chairman, President and Chief Executive Officer,
Midwest Air Group, Inc.
Katherine M. Gehl (a) (c)
Former President and Chief Executive Officer,
Gehl Foods, Inc.
Austin M. Ramirez
Chief Executive Officer, Husco
COMMITTEES OF THE BOARD: (a) Audit | (b) Compensation | (c) Corporate Governance and Nominating | (d) Finance
*Denotes chairman
OFFICERS AND EXECUTIVE MANAGEMENT
Gregory S. Marcus
President and Chief Executive Officer
Michael R. Evans
President, Marcus Hotels & Resorts
Thomas F. Kissinger
Senior Executive Vice President,
General Counsel and Secretary
Kim M. Lueck
Chief Information Officer
Chad M. Paris
Chief Financial Officer and Treasurer
Mark A. Gramz
President, Marcus Theatres Corporation
Steven V. Martin
Chief Human Resources Officer


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