INVESTOR PRESENTATION| NOVEMBER 2021 - The Marcus ...
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I N V E S T O R P R E S E N TAT I O N | N O V E M B E R 2 0 2 1
Forward Looking Statement
Certain matters discussed in this presentation are “forward-looking statements” intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of
1995. These forward-looking statements may generally be identified as such because the context of such statements include words such as we “believe,” “anticipate,” “expect” or words of similar
import. Similarly, statements that describe our future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties
which may cause results to differ materially from those expected, including, but not limited to, the following: (1) the adverse effects of the COVID-19 pandemic on our theatre and hotels and
resorts businesses, results of operations, liquidity, cash flows, financial condition, access to credit markets and ability to service our existing and future indebtedness; (2) the duration of the
COVID-19 pandemic and related government restrictions and social distancing requirements and the level of customer demand following the relaxation of such requirements; (3) the availability,
in terms of both quantity and audience appeal, of motion pictures for our theatre division (particularly following the COVID-19 pandemic, during which the production of new movie content
temporarily ceased and release dates for motion pictures have been postponed), as well as other industry dynamics such as the maintenance of a suitable window between the date such motion
pictures are released in theatres and the date they are released to other distribution channels; (4) the effects of adverse economic conditions in our markets, including but not limited to, those
caused by the COVID-19 pandemic; (5) the effects of adverse economic conditions, including but not limited to, those caused by the COVID-19 pandemic, on our ability to obtain financing on
reasonable and acceptable terms, if at all; (6) the effects on our occupancy and room rates caused by the COVID-19 pandemic and the effects on our occupancy and room rates of the relative
industry supply of available rooms at comparable lodging facilities in our markets once hotels and resorts have more fully reopened; (7) the effects of competitive conditions in our markets; (8)
our ability to achieve expected benefits and performance from our strategic initiatives and acquisitions; (9) the effects of increasing depreciation expenses, reduced operating profits during major
property renovations, impairment losses, and preopening and start-up costs due to the capital intensive nature of our business; (10) the effects of weather conditions, particularly during the
winter in the Midwest and in our other markets; (11) our ability to identify properties to acquire, develop and/or manage and the continuing availability of funds for such development; (12) the
adverse impact on business and consumer spending on travel, leisure and entertainment resulting from terrorist attacks in the United States, other incidents of violence in public venues such as
hotels and movie theatres or epidemics (such as the COVID-19 pandemic); and (13) a disruption in our business and reputational and economic risks associated with civil securities claims
brought by shareholders. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, including developments related to the COVID-19
pandemic, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements.
Our forward-looking statements are based upon our assumptions, which are based upon currently available information, including assumptions about our ability to manage difficulties associated
with or related to the COVID-19 pandemic; the assumption that our theatre closures, hotel closures and restaurant closures are not expected to be permanent or to re-occur; the continued
availability of our workforce; and the temporary and long-term effects of the COVID-19 pandemic on our business. Shareholders, potential investors and other readers are urged to consider
these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made
herein are made only as of the date of this presentation and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.
2
Non-GAAP Financial Measures
Adjusted net earnings (loss) attributable to The Marcus Corporation, Adjusted net earnings (loss) per diluted common share attributable to The Marcus Corporation and Adjusted EBITDA
have been presented in this press release as supplemental measures of financial performance that are not required by, or presented in accordance with, GAAP. The company defines
Adjusted net earnings (loss) attributable to The Marcus Corporation as net earnings (loss) attributable to The Marcus Corporation adjusted to eliminate the impact of certain items that the
company does not consider indicative of its core operating performance and the tax effect related to those items. The company defines Adjusted net earnings (loss) per diluted common
share attributable to The Marcus Corporation as Adjusted net earnings (loss) attributable to The Marcus Corporation divided by diluted weighted average shares outstanding. The company
defines Adjusted EBITDA as net earnings (loss) attributable to The Marcus Corporation before investment income or loss, interest expense, other expense, gain or loss on disposition of
property, equipment and other assets, equity earnings or losses from unconsolidated joint ventures, net earnings or losses attributable to noncontrolling interests, income taxes and
depreciation and amortization, adjusted to eliminate the impact of certain items that the company does not consider indicative of its core operating performance. Reconciliations of these
measures to the equivalent measures under GAAP are set forth in the attached tables.
Adjusted net earnings (loss) attributable to The Marcus Corporation, Adjusted net earnings (loss) per diluted common share attributable to The Marcus Corporation and Adjusted EBITDA
are key measures used by management and the company’s board of directors to assess the company’s financial performance and enterprise value. The company believes that Adjusted net
earnings (loss) attributable to The Marcus Corporation, Adjusted net earnings (loss) per diluted common share attributable to The Marcus Corporation and Adjusted EBITDA are useful
measures, as they eliminate certain expenses that are not indicative of the company’s core operating performance and facilitate a comparison of the company’s core operating performance
on a consistent basis from period to period. The company also uses Adjusted EBITDA as a basis to determine certain annual cash bonuses and long-term incentive awards, to supplement
GAAP measures of performance to evaluate the effectiveness of its business strategies, to make budgeting decisions, and to compare its performance against that of other peer companies
using similar measures. Adjusted net earnings, Adjusted diluted earnings per share and Adjusted EBITDA are also used by analysts, investors and other interested parties as performance
measures to evaluate industry competitors.
Adjusted net earnings (loss) attributable to The Marcus Corporation, Adjusted net earnings (loss) per diluted common share attributable to The Marcus Corporation and Adjusted EBITDA
are non-GAAP measures of the company’s financial performance and should not be considered as alternatives to net earnings (loss) or diluted earnings (loss) per share as a measure of
financial performance, or any other performance measure derived in accordance with GAAP and they should not be construed as an inference that the company’s future results will be
unaffected by unusual or non-recurring items. Additionally, Adjusted net earnings (loss) attributable to The Marcus Corporation and Adjusted EBITDA are not intended to be measures of
liquidity or free cash flow for management’s discretionary use. In addition, these non-GAAP measures exclude certain non-recurring and other charges. Each of these non-GAAP measures
has its limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of the company’s results as reported under GAAP. In evaluating Adjusted
net earnings (loss) attributable to The Marcus Corporation, Adjusted net earnings (loss) per diluted common share attributable to The Marcus Corporation and Adjusted EBITDA, you should
be aware that in the future the company will incur expenses that are the same as or similar to some of the items eliminated in the adjustments made to determine Adjusted net earnings
(loss) attributable to The Marcus Corporation, Adjusted net earnings (loss) per diluted common share attributable to The Marcus Corporation and Adjusted EBITDA, such as acquisition
expenses, preopening expenses, accelerated depreciation, impairment charges and other adjustments. The company’s presentation of Adjusted net earnings (loss) attributable to The
Marcus Corporation, Adjusted net earnings (loss) per diluted common share attributable to The Marcus Corporation and Adjusted EBITDA should not be construed to imply that the
company’s future results will be unaffected by any such adjustments. Definitions and calculations of Adjusted net earnings (loss), Adjusted diluted earnings (loss) per share and Adjusted
EBITDA differ among companies in our industries, and therefore Adjusted net earnings (loss), Adjusted diluted earnings (loss) per share and Adjusted EBITDA disclosed by the company
may not be comparable to the measures disclosed by other companies.
3
A Leader in Lodging and Entertainment
Founded in 1935 and headquartered in Milwaukee, Wisconsin
LTM by Division
6%
48% Revenues* Operating
52% Loss
• Fourth largest U.S. exhibitor
• 1,064 screens at 85 locations in 17 states 94%
Fiscal 2019 by Division(1) – Pre-Pandemic
12%
32% 22%
• Portfolio of 19 distinctive properties Revenues* Operating
Income
Adjusted
EBITDA
• Manage ~5,400 rooms in 9 states 68%
88% 78%
4 (1) As of December 26, 2019
* Revenues exclude Corporate of 0.1%
Company Overview
FY 2019 Revenues: LTM Revenues:
$820.9M $325.9M
FY 2019 Adjusted LTM Adjusted
EBITDA: EBITDA:
$155.2M(1) $(21.9)M(1)
FY 2019 Adj. LTM Adj.
EBITDA Margin: EBITDA Margin:
18.9%(1) (6.7)%(1)
Market Cap: Since
~$616.3M 1993
(as of 11/4/2021)
(1) Adjusted EBITDA is a Non-GAAP measurement equal to operating income plus depreciation and
amortization, impairment charges, non-cash share-based compensation and certain non-recurring
5 expenses. Refer to non-GAAP reconciliation in the appendix for further information;
Diversified
business
platform
Outperform respective
markets and industries
Focused and disciplined
growth strategy
Investment Strong balance sheet
with significant
Thesis liquidity
Significant real estate
assets
Long-term track
record of
success
Consistent
shareholder returns
6
Strong, Stable Senior Management Team
Gregory S. Marcus Thomas F. Kissinger Douglas A. Neis Rolando B. Rodriguez Michael Evans Kim M. Lueck John E. Murray
President and Senior Executive Vice Executive Vice Executive Vice President, Marcus Chief Information Officer Vice President Human
Chief Executive Officer President, General President and Chief President, The Marcus Hotels & Resorts Joined in 1997 Resources
Joined March 1992 Counsel and Secretary Financial Officer Corporation and Joined January 2020 Joined in April 2016
Joined August 1993 Joined February 1986 Chairman, President More than 20 years
and CEO, Marcus industry experience
Theatres Corporation
Joined August 2013
~40 years industry
experience
7
The Marcus Corporation Returns to Profitability
in Q3 2021
Operating income of $6.3 million
Net income of $1.8 million
Adjusted EBITDA of $24.5 million
Marcus Theatres Marcus Hotels & Resorts
• Theatre revenues, as a pct. of 2019 • Hotel revenues, as a pct. of 2019
revenues, increased to ~59% revenues, increased to 88% during
during Q3 2021 Q3 2021
• Significantly improved operating • Operating income of $13.5 million
loss in third quarter of fiscal 2021 • $17 million of Adjusted EBITDA
• $11 million of Adjusted EBITDA • Second straight quarter of
8 positive Adjusted EBITDA
85-Year History of Prudent Balance Sheet
and Liquidity Management
• Approach has been and will remain thoughtful, opportunistic, and
focused long-term
• Match our debt portfolio to our asset base
• Assets primarily of fixed and long-lived assets
• Strive to have a significant portion of our debt portfolio fixed and
long
9
Entered Pandemic from Position of Strength
• Historically strong and consistent cash flow Debt Ratios
• Approx. $197 million in cash and revolving credit 50% Debt/Capitalization % Net Debt to Adjusted EBITDA Ratio 10
availability (as of 9/30/2021)
• Income tax refund of approximately $22 million 40% 40%
40% 8
expected in fourth quarter of fiscal 2021 37%
33%
• Amended Credit Agreement, extended term loan
and added convertible senior notes to capital 30% 6
26%
structure in Sept. 2020 (see appendix for details)
• Amended Credit Agreement on 7/13/2021 and
20% 4
made an early payment on term loan facility,
reducing the balance of the facility to $50 million
2.2
and extending the term loan facility’s maturity date
10% 2
to Sept. 2022 1.5 1.3
• Continue to be positioned to meet obligations as
they come due and sustain operations throughout 0% 0
2021 and 2022, even if properties continue to 12/28/2017 12/27/2018 12/26/2019 12/31/2020 9/30/2021
generate significantly reduced revenues
Note: Adjusted EBITDA is a non-GAAP measurement equal to operating income plus depreciation/amortization, impairment charges and certain nonrecurring expenses. Net debt is a non-GAAP
10 measurement equal to short-term borrowings plus long-term debt net of debt issuance costs, minus cash and cash equivalents. Refer to non-GAAP reconciliation in the appendix for further information.Unique Real Estate Ownership Profile
In addition to our owned hotels, unlike most of our peers, we own the underlying real estate for the majority of our theatres
• Real estate ownership enables us to 100%
quickly react to changing theatre trends
23%
• Reduces our monthly fixed lease 38%
payments 75%
• Provides significant underlying credit
support 91%
50%
• Surplus real estate may be monetized if 77%
opportunities arise 62%
25%
• $13.6 million of asset sales
proceeds in 2020 and 2021 YTD
9%
0%
• Possibility of $15-30 million of
Marcus Marcus Peer Group*
additional sales of surplus and
(legacy) w/ Movie Tavern
non-core real estate during next
12-15 months Owned Leased
*Represents an estimate of AMC, Regal and Cinemark combined,
based upon available public filings.
11
Note: Marcus percentages based upon number of screens as of 9/30/2021Marcus Theatres 12
Leading U.S. Theatre Exhibitor
Marcus Theatres by Location(1)
1,064 screens ND
Fourth
2
MN
at 85 locations in 10 WI
NY
1
largest 17 states(1)
23
IA PA
NE 4
5 OH
7 IL 2
U.S. exhibitor CO
1 MO 8 KY
VA
1
9 1
AR
1
GA
TX LA 3
3 3
36
Added Acquisition of Movie Marcus Theatres by Screen(1)
theatres, 425 Tavern on February 1, 2019
screens and 10 added 208 screens ND
24
in 9 states in the
MN
states during the 126 WI
289
NY
11
PA
past six years South/East IA
NE
62 OH 36
83 IL
Increased screen CO 130 34 VA
10 MO KY 8
127 13
count by 23% AR
11 GA
TX LA 28
33 33
13 (1) As of September 30, 2021Domestic Attendance & Box Office (Pre-Pandemic)
14 3
Box Office Revenue
12 Box office Revenue in recession years 2.5
Attendence
10
2
US Box Office ($bn)
Admissions (bn)
8
1.5
6
1
4
0.5
2
0 0
Source: National Association of Theatre Owners DVD
Internet
14 Online Video StreamingLong History of Growth and Outperformance
Our investments in amenities and implementation of innovative operating and marketing strategies
resulted in historically strong performance
Box Office Results(1) Concessions Revenue Ticket Revenue per
per person YoY person YoY Growth
10%
8.6%
Growth
8.2%
8% 6.8%
30.0% 27.6% 7.0%
6.0% 6.1%
6% 25.0% 6.0%
5.0%
4% 20.0%
1.8% 15.7% 4.0% 3.4%
2% 15.0%
3.2%
3.0% 2.6%
0% 2.0%
10.0%
-2% 2016 2017 2018 2019 6.4% 6.9% 6.8%
5.1% 1.0%
-1.0% 5.0% -0.4%
-4% -2.6%
0.0%
(2) (3) (4) (5) (5,7)
(5,6)
0.0% -1.0%
-6% -5.5%
(2) (3) (4) (5) (5,6) (5,7)
-6.0%
-8%
U.S. Marcus
(1) Represents change in admission revenues compared to prior year. (4) Excludes Movie Tavern theatres.
Source for U.S. numbers: Comscore. Comparisons data for (5) Includes Movie Tavern theatres.
U.S. market was not available for the final three quarters of 2020. (6) All theatres were closed during most of Q2 and Q3.
(2) Excludes Marcus Wehrenberg Theatres. (7) Compared to the first half of fiscal 2020; comparisons to the second quarter of
15 (3) Includes Marcus Wehrenberg Theatres fiscal 2020 are not applicable because the majority of theatres were closedCreated Industry-Leading Theatre Guest Experience
Invested ~$570 Million in New and Existing Assets Since June 2013
Recliner Food and
PLF Screens Acquisitions New Theatres
Seating Beverage
• 76% of company- • 76% of company- • 62% of first-run • ~60% of existing • BistroPlex in-theatre
owned theatres owned, first run theatres offer one or circuit via acquisitions dining concept:
• 80% of screens theatres more in-lobby dining • Movie Tavern: Greendale, Wis.
• Highest percentage • Highest among top concepts (excluding 208 Screens in nine (June 2017)
among the top chains Movie Tavern states (Feb. 2019) • New Movie Tavern by
chains • 120 PLF screens, theatres) • Wehrenberg Theatres: Marcus – Brookfield,
including proprietary • 36% offer in-theatre 197 Screens in four Wis. (Oct. 2019)
UltraScreen DLX® and dining states (Dec. 2016)
SuperScreen DLX® • 59% offer bars and
brands lounges
16 Note: Data as of September 30, 2021 unless otherwise notedActive Promotions and Loyalty Programs
Value Pricing Magical Movie Rewards Alternative Programming
4.3 Million loyalty
customers and growing (1)
17 (1) As of November 1, 2021Technology Improving Our
Business
• New point-of-sale system
• New website ticketing engine
• New Marcus Theatres App
• Handheld technology for order taking
– New: F&B ordering via App/Kiosk
• Using data from Movio to understand
customer preferences/habits and target
rewards and promotions
– Opportunities in advanced data analytics to
further transform data into information
• New labor forecasting tools
18Remaining 2021 Film Slate Appears Very Strong*
• Division experienced its best month at the box office in the COVID era in October 2021
with films like “Venom: Let There Be Carnage,” “The Addams Family 2,” “No Time To
Die,” “Halloween Kills,” and “Dune”
Remaining Q4 2021 Films
Eternals Clifford The Big Red Dog King Richard
Ghostbusters: Afterlife House of Gucci Encanto
West Side Story Spider-Man: No Way Home Sing 2
The King’s Man The Matrix Resurrections A Journal For Jordan
19 * Film slate subject to changeEncouraging 2022 Film Slate*
2022 Films
Fantastic Beasts: The
The 355 Ambulance Lightyear Halloween Ends
Secrets of Dumbledore
Doctor Strange In The Transformers: Rise of the
Scream The Batman The Flash
Multiverse Of Madness Beasts
Black Panther: Wakanda
Morbius Turning Red DC Super Pets Minions: The Rise of Gru
Forever
Moonfall Downton Abbey: A New Era Legally Blonde 3 Thor: Love and Thunder Creed III
The Black Phone The Lost City John Wick: Chapter 4 Black Adam Avatar 2
Death on the Nile Sonic The Hedgehog 2 Top Gun Maverick Mission Impossible 7 Aquaman 2
Spider-Man: Into the Spider-
Uncharted Bullet Train Jurassic World: Dominion Mario
Verse Sequel
20 * Film slate subject to changeFirst Three Quarters of 2021 Results • Outperformed the industry by 6 percentage points during the first three quarters of fiscal 2021 and market share increased from 3.1% in 2019 to 3.6% in 2021 YTD; believe this made Marcus Theatres one of the top performing theatre circuits during the quarter compared to the top 10 circuits in the U.S. • Average admission price increased 6.1% and average concession revenues per person increased by 15.7% during the first three quarters 21
Outlook • Increased vaccination rates and declining Covid cases has contributed to improved consumer confidence • Film slate for remainder of 2021 and 2022 is expected to be very strong • Expect distributing films in a movie theatre to remain an important component of studios’ business model • Pent-up demand and vaccination rates bodes well for continued long-term recovery 22
Marcus Hotels & Resorts 23
Diverse Portfolio
8 company majority-owned properties; manage 11 properties for other owners
Grand Geneva Resort, Skirvin Hilton, AC Hotel Chicago Downtown, Saint Kate – The Arts Hotel,
Lake Geneva, WI Oklahoma City, OK Chicago, IL Milwaukee, WI
Lincoln Marriott Cornhusker, Hilton Milwaukee City Center, The Pfister Hotel, Hilton Madison Monona Terrace,
Lincoln, NE Milwaukee, WI Milwaukee, WI Madison, WI
24Added New Management Contract
• Assumed management of The Coralville Hotel
& Conference Center in Coralville, Iowa,
effective 8/18/2021
• Hotel has been rebranded to Hyatt Regency
Coralville Hotel & Conference Center
• Features 286 guest rooms, 57,588 square feet
of meeting and convention space and a full
dining experience
• Property will undergo a phased renovation
following the brand transition focused on the
The Coralville Hotel & Conference Center,
guest rooms and hotel restaurant Coralville, IA
• Expands company’s footprint into Iowa and a
third “Big Ten” market
25A Formidable Footprint
Marcus Hotels Locations
• Branded and independent
first-class hotels
• Nearly 60 years of hotel
management experience
• 5,400 Rooms Managed
• 200+ Meeting & Event Rooms
• 40+ Restaurants & Lounges
• 19 Managed Properties
• 3 Luxurious Spas
• 2 World Class Golf Courses
• 1 Ski Hill
• 1 Airport
• 1 Escape Room Experience
26A Leader in Our Markets and Industry
• Consistently outperforming our
competitive sets Marcus Owned Market Share(1)
• Expertise in management,
140.0
development, historic 135.9
135.0
renovations, asset
130.0
repositioning and F&B 125.0
• Operational excellence – 120.0
122.1
consistently earn industry 115.0 111.6 110.4 113.5
110.0
108.1 107.7
awards 110.0
110.8 111.3
105.0 107.9 108.5
106.2
105.4
100.0
101.9 100.7 101.8 101.7
95.0
(2)
2016 2017 2018 2019 2020 2021
RevPAR ADR Occupancy Fair Market Share
(1) Index value of 100.0 indicates fair market share. Value greater than 100.0 suggests greater than fair share of market.
27 (2) Excludes Saint Kate – The Arts Hotel, which was closed for five months during the year.Industry Performance
(1) (1)
(1)
(2)
28 (1)
(2)
Revenue per available room (“RevPAR”) represents the total room revenue divided by the total number of available rooms
Occupancy represents the percentage of available rooms sold during a specified time period. Occupancy is calculated by dividing the number of rooms sold by rooms available.
Source: Smith Travel ResearchGrowth Opportunities
Opportunistically Adding New Enhancing Value Strong Food
Investing in New Management of Owned & Beverage
Hotels Contracts Properties Revenues
• MCS Capital, wholly owned • Sought after property manager • Maintain and enhance the • F&B represented nearly 28% and
investment entity value of our existing 33% of total division revenues for
• Comprehensive portfolio
• Serves as investment fund properties through thoughtful FY 2020 and FY 2019, respectively
of services hotel owners and
sponsor, JV partner or sole investments and renovations (excluding cost reimbursements)
developers need
investor • Saint Kate – The Arts Hotel • Developed and acquired
• Assumed management of opened in June 2019. successful restaurant brands
• Able to make small equity
Coralville Hotel & Conference Innovative experiential arts
investments in managed
Center in Coralville, Iowa on hotel in downtown Milwaukee,
properties
August 18, 2021 Completely reimagined former
• Current environment may create
company-owned branded
opportunities
hotel. Recipient of numerous
national awards
Coralville Hotel & Conference
Center
Lincoln Marriott
Cornhusker Hotel Hilton Madison
Monona Terrace
Hyatt Regency Saint Kate
Omaha Marriott Schaumburg, IL
Downtown Milwaukee
29First Three Quarters of 2021 Results • Outperformed comparable hotels by approximately 11 percentage points for the first three quarters of fiscal 2021 • Returned to profitability during the third quarter and first three quarters of fiscal 2021; all company-owned hotels and resorts contributed to the improved operating results during fiscal 2021 30
Outlook
• Economic environment will impact future
RevPAR trends; hotel revenues have
historically tracked closely with GDP
• History (9/11, financial crisis) suggests
business and group travel might take
longer to recover
• Drive-to leisure demand expected to
remain strong; Increase in vaccination
rates may help future bookings
• Hotel supply growth will likely be limited
– favorable for existing hotels
• Several hotels scheduled for
reinvestment in next two to three years
31 The Garland, Los Angeles, CAShareholder Value Creation
Disciplined Historical Capital Allocation Strategy
• Opportunistically allocated over $925 million in capital from June 2013 to December 2019
2% 2%
3%
12% 9%
22%
M&A
Operations Theatre Cap Ex
9% 12% Hotel Cap Ex
Asset Sales
Net Debt Proceeds
Capital Capital Net Debt Repayments
Dividends
Stock Issuance 3% Sources Uses
Other Share Repurchases
Other
15%
73%
38%
33History of Returning Capital to Shareholders
• Annual cash dividend was $0.68 prior to
suspension on 4/29/20 (3-year average yield of Annual Cash Dividends
1.7%)
$0.7
• 45 years of consecutive dividends pre-COVID $0.64
$0.60
$0.6
• Special dividends in 2006 ($7.00) and 2012
($1.00) $0.50
$0.5
$0.45
• Repurchased over 3.9 million shares between
$0.39
2012 and 2016 at an average price of $0.4
$0.35
approximately $12
$0.3
• Amended credit agreement allows reduced
dividends and/or share repurchases beginning $0.2
in the first quarter of 2022 and all restrictions
on capital returns to shareholders are removed $0.1
entirely after the term loan is repaid and the
company is in compliance with prior $0.0
covenants 2014 2015 2016 2017 2018 2019
34Long-Term Value Maximization
Theatre Expansion Hotel Expansion Reinvesting in Existing Assets
• Acquisitions • Joint Ventures • Hotel & Theatre Renovations
• New Builds • Management Contracts • New Amenities & Features
• Creation of a Fund • F&B Innovations
• DreamLoungers, UltraScreen
DLX, SuperScreen DLX
Divestitures of Assets Operating Strategies Capital Structure Strategies
• Sale of Selected Hotels • Revenue Enhancements • Share Repurchases
(may retain management) • Cost Rationalization • Dividend Policy
• Selected Theatre • Management • Balance Sheet Management
Replacement
Focused on Long-Term Shareholder Value
35Financial Performance 36
Historical Financial Performance
Revenues Operating Income Adjusted EBITDA
(4)
(in millions) (in millions)
(in millions)
Operating Income % of Revenues Adjusted EBITDA Adjusted EBITDA Margin %
$900
$820.9 $100 $83.2 25% $200 30%
$77.3 $83.2
$800 68.2
$707.1
$160 $149.4 $155.2
$700 $653.6 $50 11.8%
11.8% 11.8% 8.3% 0% $132.7
$600 $653.6 $117.2 25%
$120
$0
$500 (1) (2)
-25%
2016 2017 2018 2019 2020 LTM $80
$400 -$50 21.1% 20%
$325.9
$40 20.4% 20.3%
$300 $237.7 -50%
18.9%
-$100
$200 (3) $0
$(110.7) 15%
$100 -75% 2016 2017 2018 2019 2020 LTM
-$150 -$40 $(21.9)
$0
2016 2017 2018 2019 2020 LTM -$200 $(178.4) -100% -$80 10%
$(71.6)
(1) Includes $2.2M of nonrecurring acquisition and preopening expenses and $3.7M of nonrecurring depreciation.
(2) Includes impairment charge of $1.9 million and $9.3M of nonrecurring acquisition, preopening and initial startup losses.
(3) Includes impairment charges of $18.9 million and net nonrecurring COVID-related favorable adjustments of $10.7 million.
(4) Non-GAAP measurement equal to operating income plus depreciation and amortization, impairment charges, non-cash share-based compensation and certain non-recurring expenses. Refer to the non-GAAP
reconciliation in the appendix for further information.
37Historical Results by Segment (in millions)
Revenues (1) (in millions) Operating Income (in millions)
2016-19
$800 CAGR $125 $13 $12
$15 $10
$227 1.8% $89
$600 $25 $72 $80 $77
$221 $227
$400 $215 $(89)
19.2% -$75 $(121)
$556 $156
$200 $401 $446 $105 $(6)
$328 $(44)
$133 $169 -$175
$0
2016 2017 2018 2019 2020 LTM 2016 2017 2018 2019 2020 LTM
Theatres Hotels & Resorts Theatres Hotels & Resorts
Adjusted EBITDA (in millions)
Capital Expenditures (in millions)
& Adjusted EBITDA Margin 2016-19
CAGR
$175 30.0% 28.6% 29.0% 35.0% $120
$35 $37 5.8% $21
$125 $31 23.8% $100
$32 25.0%
$80 $15
$75 14.6% 14.2% 15.5% 16.4%
15.0% $60
$25 10.4% $94 $15 $32
$98 $115 $129 $132 $14 $40
5.0% $69
-$25 $(43) $(23) $20 $44 $5 $5
$32
$(17) $0 $16 $7
-$75 -5.0% (2) (2)
2016 2017 2018 2019 2020 LTM 2016 2017 2018 2019 2020 LTM
Theatres Hotels & Resorts Theatre Hotel Theatres Hotels & Resorts
Note: Above charts do not include corporate segment. Adjusted EBITDA is a non-GAAP
(1) Excludes cost reimbursements measurement equal to operating income plus depreciation/amortization, impairment charges and
38 (2) Excludes Wehrenberg and Movie Tavern acquisitions. nonrecurring acquisition, preopening expenses and initial startup losses. Refer to non-GAAP
reconciliation in the appendix for further information.APPENDIX
Credit Agreement Amendment and Convertible Debt
Issuance
• Amended bank agreements, extended term loan by 5 months and adjusted
covenants to provide for near- and medium-term uncertainly
• Key component of amended bank agreements was opportunistically raising attractive
capital that could ultimately replace the short-term term loan
• September 2020 issuance of 5% convertible unsecured notes due September
2025 has the following advantages:
• Effectively replaces short-term borrowings with 5-year junior capital
• Cash interest payments will be significantly lower than other long-term options
• Able to size the issuance appropriately, particularly for a company our size
• Purchased a capped call in conjunction with our issuance to effectively increase the strike
price of the convertible from 22.5% of our closing stock price to 100% of our closing stock
price, significantly reducing any dilution concerns
• Option to settle these notes at maturity with cash, equity or a combination thereof,
40 providing further ability to reduce any actual dilution at maturityFuture Dilution Minimized by Capped Call and Repayment Options 41
First Three Quarters of Fiscal 2021
Financial Highlights
First Three Quarters of Fiscal 2021 Financial Highlights
(In thousands, except per share data)
13 Weeks Ended 39 Weeks Ended
Sept. 30, Sept. 24, Sept. 30, Sept. 24,
2021 2020 2021 2020
Total revenues $ 145,862 $ 33,591 $ 289,196 $ 200,984
Operating income (loss) 6,273 (47,987) (55,498) (123,249)
Net earnings (loss) 1,759 (39,440) (49,737) (85,821)
Net earnings (loss) per share 0.06 (1.30) (1.66) (2.84)
Adjusted net earnings (loss)(1) 275 (36,992) (49,403) (88,688)
(1)
Adjusted net earnings (loss) per share 0.01 (1.22) (1.64) (2.93)
Adjusted EBITDA(1) 24,515 (25,808) 5,830 (43,804)
(1) Adjusted loss attributable to The Marcus Corporation, Adjusted loss per diluted common share attributable to The Marcus Corporation and Adjusted EBITDA reflect adjustments made by the company to eliminate
42 the favorable impact of government grants received and the impact of impairment charges during the fiscal 2021 periods, as well as the impact of a favorable income tax adjustment and certain nonrecurring property
closure expenses, reopening expenses and impairment charges during the fiscal 2020 periods.First Three Quarters of 2021 Financial Highlights
Reconciliation of Adjusted net earnings (loss) and Adjusted net earnings (loss) per diluted common share
(Unaudited)
(In thousands, except per share data)
13 Weeks Ended 39 Weeks Ended
Sept. 30, Sept. 24, Sept. 30, Sept. 24,
2021 2020 2021 2020
Net earnings (loss) attributable to The Marcus Corporation $ 1,759 $ (39,440) $ (49,737) $ (85,821)
Add (deduct):
Adjustment to income taxes (a) 168 (17,420)
Property closure/reopening expenses - theatres (b) - 1,173 - 4,630
Property closure/reopening expenses - hotels (c) - 443 - 5,484
Impairment charges (d) - 765 3,732 9,477
Joint venture impairment charge (e) 811 811
Government grants (f) (2,009) - (3,280) -
Tax impact of adjustments to net earnings (g) 525 (912) (118) (5,849)
Adjusted net earnings (loss) attributable to The Marcus Corporation $ 275 $ (36,992) $ (49,403) $ (88,688)
Weighted average shares outstanding - diluted 31,469 31,064 31,340 31,033
Net earnings (loss) per diluted common share attributable to The Marcus Corporation $ 0.06 $ (1.30) $ (1.66) $ (2.84)
Adjusted net earnings (loss) per diluted common share attributable to
The Marcus Corporation $ 0.01 $ (1.22) $ (1.64) $ (2.93)
a) Reflects a nonrecurring adjustment to income taxes related to several accounting method changes and the impact of the CARES Act, which allows net operating loss carrybacks to a higher federal income tax rate year.
b) Reflects nonrecurring costs related to the required closure of all of the company's movie theatres due to the COVID-19 pandemic, plus subsequent nonrecurring costs related to reopening theatres.
c) Reflects nonrecurring costs related to the closure of the company's hotels and resorts due to reduced occupancy as a result of the COVID-19 pandemic, plus subsequent nonrecurring costs related to reopening hotels.
d) Impairment charges related to surplus theatre real estate for the fiscal 2021 periods and intangible assets (trade name) and several theatre locations for the fiscal 2020 periods.
e) Impairment charge related to an investment in a joint venture.
43 f) Reflects a nonrecurring state government grant awarded to our theatres and hotels for COVID-19 relief.
g) Represents the tax effect related to adjustments (b), (c), (d), (e) and (f) to net earnings (loss), calculated using a statutory tax rate of 26.1% for the fiscal 2021 periods and 28.7% for the fiscal 2020 periods.First Three Quarters of 2021 Financial Highlights
Reconciliation of Net earnings (loss) to Adjusted EBITDA
(Unaudited)
(In thousands)
13 Weeks Ended 39 Weeks Ended
Sept. 30, Sept. 24, Sept. 30, Sept. 24,
2021 2020 2021 2020
Net earnings (loss) attributable to The Marcus Corporation $ 1,759 $ (39,440) $ (49,737) $ (85,821)
Add (deduct):
Investment income 7 (66) (153) (207)
Interest expense 4,600 4,132 14,350 10,177
Other expense 625 590 1,881 1,771
(Gain) loss on disposition of property, equipment and other assets (868) 251 (2,908) 299
Equity losses from unconsolidated joint ventures - 1,054 - 1,539
Net loss attributable to noncontrolling interests - 0 0 (23)
Income tax expense (benefit) 150 (14,508) (18,931) (50,984)
Depreciation and amortization 17,730 18,690 54,203 56,568
Share-based compensation expenses (a) 2,521 1,108 6,673 3,286
Property closure/reopening expenses - theatres (b) - 1,173 - 4,630
Property closure/reopening expenses - hotels (c) - 443 - 5,484
Impairment charges (d) - 765 3,732 9,477
Government grants (e) (2,009) - (3,280) -
Adjusted EBITDA $ 24,515 $ (25,808) $ 5,830 $ (43,804)
a) Non-cash charges related to share-based compensation programs.
b) Reflects nonrecurring costs (primarily payroll) related to the required closure of all of the company's movie theatres due to the COVID-19 pandemic, plus subsequent nonrecurring costs related to reopening theatres.
c) Reflects nonrecurring costs related to the closure of the company's hotels and resorts due to reduced occupancy as a result of the COVID-19 pandemic, plus subsequent nonrecurring costs related to reopening hotels.
44 d) Impairment charges related to surplus theatre real estate for the fiscal 2021 periods and intangible assets (trade name) and several theatre locations for the fiscal 2020 periods.
e) Reflects a nonrecurring state government grant awarded to our theatres and hotels for COVID-19 relief.I N V E S T O R P R E S E N TAT I O N | N O V E M B E R 2 0 2 1
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