Business Wire | Aug 4, 2020 07:45AM EDT

The Marcus Corporation Reports Second Quarter Fiscal 2020 Results

Aug. 04, 2020

MILWAUKEE--(BUSINESS WIRE)--Aug. 04, 2020--The Marcus Corporation (NYSE: MCS) today reported results for the second quarter of fiscal 2020 ended June 25, 2020.

Second Quarter Fiscal 2020 Highlights

* Total revenues for the second quarter of fiscal 2020 were $7,933,000, compared to total revenues of $232,500,000 for the second quarter of fiscal 2019. * Operating loss was $53,062,000 for the second quarter of fiscal 2020, compared to operating income of $27,475,000 for the prior year quarter. * Net loss attributable to The Marcus Corporation was $27,029,000 for the second quarter of fiscal 2020, compared to net earnings attributable to The Marcus Corporation of $18,066,000 for the same period in fiscal 2019. * Net loss per diluted common share attributable to The Marcus Corporation was $0.89 for the second quarter of fiscal 2020, compared to net earnings per diluted common share attributable to The Marcus Corporation of $0.58 for the second quarter of fiscal 2019. * Adjusted net loss attributable to The Marcus Corporation was $42,525,000 for the second quarter of fiscal 2020, compared to Adjusted net earnings attributable to The Marcus Corporation of $20,169,000 for the second quarter of fiscal 2019. * Adjusted net loss per diluted common share attributable to The Marcus Corporation was $1.37 for the second quarter of fiscal 2020, compared to Adjusted net earnings per diluted common share attributable to The Marcus Corporation of $0.64 for the prior year quarter. * Adjusted EBITDA was a loss of $30,046,000 for the second quarter of fiscal 2020, compared to Adjusted EBITDA of $49,543,000 for the comparable prior year period. * 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 reflect adjustments made by the company to eliminate the impact of a favorable income tax adjustment and certain nonrecurring property closure expenses, reopening expenses and impairment charges during the second quarter of fiscal 2020, as well as certain nonrecurring acquisition and preopening expenses related to the Movie Tavern acquisition and certain nonrecurring preopening expenses related to the conversion of the former InterContinental Milwaukee hotel into Saint Kate(r) - The Arts Hotel, during the first half of fiscal 2019.

First Half Fiscal 2020 Highlights

* Total revenues for the first half of fiscal 2020 were $167,393,000, compared to total revenues of $402,539,000 for the first half of fiscal 2019. * Operating loss was $75,262,000 for the first half of fiscal 2020, compared to operating income of $32,425,000 for the first half of fiscal 2019. * Net loss attributable to The Marcus Corporation was $46,381,000 for the first half of fiscal 2020, compared to net earnings attributable to The Marcus Corporation of $19,926,000 for the first half of fiscal 2019. * Net loss per diluted common share attributable to The Marcus Corporation was $1.53 for the first half of fiscal 2020, compared to net earnings per diluted common share attributable to The Marcus Corporation of $0.64 for the first half of fiscal 2019. * Adjusted net loss attributable to The Marcus Corporation was $51,860,000 for the first half of fiscal 2020, compared to Adjusted net earnings attributable to The Marcus Corporation of $24,279,000 for the first half of fiscal 2019. * Adjusted net loss per diluted common share attributable to The Marcus Corporation was $1.67 for the first half of fiscal 2020, compared to Adjusted net earnings per diluted common share attributable to The Marcus Corporation of $0.78 for the first half of fiscal 2019. * Adjusted EBITDA was a loss of $17,996,000 for the first half of fiscal 2020, compared to Adjusted EBITDA of $74,299,000 for the first half of fiscal 2019. * 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 reflect adjustments made by the company to eliminate the impact of a favorable income tax adjustment and certain nonrecurring property closure expenses, reopening expenses and impairment charges during the first half of fiscal 2020, as well as certain nonrecurring acquisition and preopening expenses related to the Movie Tavern acquisition and certain nonrecurring preopening expenses related to the conversion of the former InterContinental Milwaukee hotel into Saint Kate(r) - The Arts Hotel, during the first half of fiscal 2019.

"The impact of the COVID-19 pandemic on our business, the industries in which we compete, and the global economy is truly unprecedented," said Gregory S. Marcus, president and chief executive officer of The Marcus Corporation. "Yet thanks to the resiliency of our team, our strong financial position and the proactive measures we took when the pandemic began, including reducing expenses and increasing our liquidity, we are positioned to weather this crisis. As we prudently reopen our theatres, hotels and restaurants, I have every confidence that our outstanding team has gone above and beyond to deliver an exceptional experience while protecting the health and safety of our guests and associates. We have always said our associates are our greatest asset. That has proven true time and again throughout this crisis."

Balance Sheet

The company believes it entered this crisis from a position of strength. As a result, despite all theatres and hotels being closed during most of the second quarter of fiscal 2020, the company's net-debt-to-capitalization ratio (debt, net of cash) was 32% at the end of the second quarter.

On April 29, 2020, The Marcus Corporation entered into an amendment to its credit agreement, which included a new $90.8 million term loan. This additional financing further enhanced the company's liquidity, which as of June 25, 2020 included approximately $170 million in cash and revolving credit availability.

"Maintaining a strong balance sheet has always been core to our strategy," said Marcus. "With our enhanced liquidity, we believe it positions us to continue to sustain our operations well into 2021, even in the unlikely scenario that our properties continue to be closed. It is also worth noting that in addition to our owned hotels, we own the underlying real estate for the majority of our theatres. We believe this is a significant advantage for us relative to our peers as it keeps our monthly fixed lease payments low and provides significant underlying credit support for our balance sheet."

Marcus also noted that the company expects to benefit from the Coronavirus Aid, Relief, and Economic Security Act of 2020 by realizing certain income tax benefits in fiscal 2020 and 2021.

Marcus Theatres(r)

On June 19, 2020, Marcus Theatres began to implement its phased reopening plan starting with six theatres, with the primary goal being to test new operating protocols designed to prioritize the safety and well-being of both guests and associates. The timing of additional theatre reopenings will coincide with local market demand and film studio plans to release new films to the market.

"We remain optimistic that pent up demand, increased consumer comfort and the coming release of new films will help accelerate our reopening," said Rolando Rodriguez, chairman, president and chief executive officer of Marcus Theatres. "While we were on intermission during the second quarter, we developed, tested and implemented our comprehensive 'Movie STAR' approach, featuring enhanced health and safety protocols and advanced technology so our guests can enjoy the big screen with confidence. We also offered curbside pick-up and online ordering of favorites like popcorn, pizza and other food items, and introduced five parking lot cinemas for those looking to enjoy an outdoor movie experience. Throughout this period, we remained in consistent communication with our loyal guests through our Magical Movie RewardsSM loyalty program."

As of the date of this release, the film studios have indicated that they intend to release new films later this month, beginning with Unhinged on August 21, New Mutants on August 28 and the highly anticipated Tenet on September 3. If this schedule holds, we expect to reopen the majority of our theatres in time for these new movies. Additional films expected in the second half of the year include The King's Man, Wonder Woman 1984, Death on the Nile, Black Widow, Soul, No Time to Die, Free Guy, West Side Story, Coming 2 America, Dune, and The Croods 2. "While we cannot control future film release dates, we will continue to adapt our plans as necessary and find innovative ways to stay connected to our guests as we prepare to welcome them back to a safe and comfortable environment," said Rodriguez.

Marcus(r) Hotels & Resorts

In June, Marcus Hotels & Resorts reopened four company-owned hotels. Most hotels under management have also reopened. Additional hotel reopenings are expected in the third quarter and will be evaluated as individual and business travelers begin to travel more freely.

Current demand is largely driven by the "drive-to-leisure" market, as air travel remains reduced and group business is limited. Even though Marcus Hotels & Resorts experienced a significant decrease in group bookings for the remainder of the year because of the COVID-19 pandemic, group pace for 2021 is only slightly behind the comparable period last year, which included bookings in anticipation of Milwaukee hosting the Democratic National Convention (DNC).

"Most cancelled group bookings that were not for one-time events are rebooking for future dates, including for the rescheduled Ryder Cup in September 2021," said Michael Evans, president of Marcus Hotels & Resorts. "And while the DNC will not be nearly as significant as originally anticipated due to the COVID-19 pandemic, it still is expected to benefit our Milwaukee hotels. While temporarily closing our hotels was the right thing to do, we believe our properties are uniquely positioned in their respective markets to recapture demand as travel recovers."

Reopened hotels are operating with new protocols, including our CleanCare Pledge, which feature industry best practices for cleanliness, sanitation and safety. "As we continue to reopen our hotels, resorts and restaurants, the health and safety of our guests and associates remains paramount," said Evans. "Our associates are working tirelessly so every guest can rest easy knowing they are receiving the highest standards of service and cleanliness, while still enjoying the best our award-winning properties have to offer."

Conference Call and Webcast

The Marcus Corporation management will hold a conference call today, Tuesday, August 4, 2020, at 10:00 a.m. Central/11:00 a.m. Eastern time. Interested parties may listen to the call live on the internet through the investor relations section of the company's website: www.marcuscorp.com, or by dialing 1-574-990-3059 and entering the passcode 5626098.

A telephone replay of the conference call will be available through Tuesday, August 11, 2020, by dialing 1-855-859-2056 and entering passcode 5626098. The webcast will be archived on the company's website until its next earnings release.

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.

About The Marcus Corporation

Headquartered in Milwaukee, The Marcus Corporation is a leader in the lodging and entertainment industries, with significant company-owned real estate assets. The Marcus Corporation's theatre division, Marcus Theatres(r), is the fourth largest theatre circuit in the U.S. and currently owns or operates 1,110 screens at 91 locations in 17 states under the Marcus Theatres, Movie Tavern(r) by Marcus and BistroPlex(r) brands. The company's lodging division, Marcus(r) Hotels & Resorts, owns and/or manages 18 hotels, resorts and other properties in eight states. For more information, please visit the company's website at www.marcuscorp.com.

Certain matters discussed in this press release 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 has essentially 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); (13) a disruption in our business and reputational and economic risks associated with civil securities claims brought by shareholders; (14) our ability to timely and successfully integrate the Movie Tavern operations into our own circuit; and (15) our ability to achieve the additional revenues and operating income that we anticipate from our additional week of operations in fiscal 2020. 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 press release and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

THE MARCUS CORPORATIONConsolidated Statements of Earnings (Loss)(Unaudited)(in thousands, except per share data) 13 Weeks Ended 26 Weeks Ended

June 25, June 27, June 25, June 27,

2020 2019 2020 2019

Revenues:Theatre admissions $ 154 $ 83,055 $ 55,549 $ 142,024

Rooms 857 28,194 17,846 47,132

Theatre concessions 1,104 67,920 47,034 115,075

Food and beverage 586 18,615 14,200 34,398

Other revenues 3,297 22,533 22,073 43,362

5,998 220,317 156,702 381,991

Cost reimbursements 1,935 12,183 10,691 20,548

Total revenues 7,933 232,500 167,393 402,539

Costs and expenses:Theatre operations 8,640 76,193 62,656 132,571

Rooms 1,866 10,309 11,521 19,344

Theatre concessions 831 25,049 23,042 42,318

Food and beverage 1,151 14,902 15,616 28,511

Advertising and 1,075 6,101 6,465 11,011 marketingAdministrative 11,178 18,950 28,910 36,809

Depreciation and 18,845 18,273 37,878 34,258 amortizationRent 6,328 6,878 13,282 12,281

Property taxes 6,025 5,468 12,054 10,861

Other operating 3,121 10,719 11,828 21,602 expensesImpairment charges - - 8,712 -

Reimbursed costs 1,935 12,183 10,691 20,548

Total costs and 60,995 205,025 242,655 370,114 expenses Operating income (53,062 ) 27,475 (75,262 ) 32,425 (loss) Other income(expense):Investment income 836 175 141 648

Interest expense (3,529 ) (3,093 ) (6,045 ) (6,152 )

Other expense (591 ) (480 ) (1,181 ) (960 )

Loss on disposition of (36 ) (147 ) (48 ) (140 )property, equipmentand other assetsEquity losses from (428 ) (84 ) (485 ) (168 )unconsolidated jointventures (3,748 ) (3,629 ) (7,618 ) (6,772 )

Earnings (loss) before (56,810 ) 23,846 (82,880 ) 25,653 income taxesIncome taxes (benefit) (29,906 ) 5,609 (36,476 ) 5,622

Net earnings (loss) (26,904 ) 18,237 (46,404 ) 20,031

Net (earnings) lossattributable to 125 171 (23 ) 105 noncontrollinginterestsNet earnings (loss) $ (27,029 ) $ 18,066 $ (46,381 ) $ 19,926 attributable to TheMarcus Corporation Net earnings (loss)per common share $ (0.89 ) $ 0.58 $ (1.53 ) $ 0.64 attributable to TheMarcus Corporation -diluted

THE MARCUS CORPORATIONCondensed Consolidated Balance Sheets(In thousands) (Unaudited) (Audited)

June 25, December 26,

2020 2019

Assets: Cash and cash equivalents $ 79,596 $ 20,862

Restricted cash 8,385 4,756

Accounts receivable 7,312 29,465

Refundable income taxes 51,580 5,916

Other current assets 11,117 18,265

Property and equipment, net 895,469 923,254

Operating lease right-of-use assets 240,790 243,855

Other assets 111,148 112,813

Total Assets $ 1,405,397 $ 1,359,186

Liabilities and Shareholders' Equity: Accounts payable $ 11,585 $ 49,370

Taxes other than income taxes 16,864 20,613

Other current liabilities 62,251 79,189

Short-term borrowings 90,218 -

Current portion of finance lease obligations 2,809 2,571

Current portion of operating lease obligations 18,971 13,335

Current maturities of long-term debt 2,312 9,910

Finance lease obligations 19,877 20,802

Operating lease obligations 235,291 232,111

Long-term debt 257,409 206,432

Deferred income taxes 57,109 48,262

Deferred compensation and other 57,721 55,133

Equity 572,980 621,458

Total Liabilities and Shareholders' Equity $ 1,405,397 $ 1,359,186

THE MARCUS CORPORATIONBusiness Segment Information(Unaudited)(In thousands) Theatres Hotels/ Corporate Total Resorts Items13 Weeks Ended June 25, 2020Revenues $ 1,849 $ 5,915 $ 169 $ 7,933

Operating income (loss) (34,531 ) (14,681 ) (3,850 ) (53,062 )

Depreciation and 13,382 5,333 130 18,845 amortization 13 Weeks Ended June 27, 2019Revenues $ 162,387 $ 69,971 $ 142 $ 232,500

Operating income (loss) 28,219 4,016 (4,760 ) 27,475

Depreciation and 13,353 4,832 88 18,273 amortization 26 Weeks Ended June 25, 2020Revenues $ 111,060 $ 56,075 $ 258 $ 167,393

Operating income (loss) (41,614 ) (25,534 ) (8,114 ) (75,262 )

Depreciation and 26,892 10,745 241 37,878 amortization 26 Weeks Ended June 27, 2019Revenues $ 277,272 $ 125,032 $ 235 $ 402,539

Operating income (loss) 40,813 863 (9,251 ) 32,425

Depreciation and 24,480 9,599 179 34,258 amortization

Corporate items include amounts not allocable to the business segments.Corporate revenues consist principally of rent and the corporate operating lossincludes general corporate expenses. Corporate information technology costs andaccounting shared services costs are allocated to the business segments basedupon several factors, including actual usage and segment revenues.

THE MARCUS CORPORATION 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 26 Weeks Ended

June 25, June 27, June 25, June 27,

2020 2019 2020 2019

Net earnings (loss) $ (27,029 ) $ 18,066 $ (46,381 ) $ 19,926 attributable to The MarcusCorporationAdd (deduct):Adjustment to income taxes (17,588 ) - (17,588 ) - (a)Acquisition/preopening - 167 - 1,976 expenses - theatres (b)Preopening expenses - - 2,679 - 3,914 hotels (c)Property closure/reopening 670 - 3,457 - expenses - theatres (d)Property closure/reopening 2,311 - 5,041 - expenses - hotels (e)Impairment charges (f) - - 8,712 -

Tax impact of adjustments (889 ) (743 ) (5,101 ) (1,537 )to net earnings (g)Adjusted net earnings $ (42,525 ) $ 20,169 $ (51,860 ) $ 24,279 (loss) attributable to TheMarcus Corporation Net earnings (loss) perdiluted common share $ (0.89 ) $ 0.58 $ (1.53 ) $ 0.64 attributable to The MarcusCorporationAdjusted net earnings(loss) per diluted common $ (1.40 ) $ 0.64 $ (1.71 ) $ 0.78 share attributable to TheMarcus Corporation

Reflects a nonrecurring adjustment to income taxes related to several(a) 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) Acquisition and preopening costs incurred related to the Movie Tavern acquisition.(c) Preopening costs incurred related to the conversion of the InterContinental Milwaukee into Saint Kate(r) - The Arts Hotel. Reflects nonrecurring costs related to the required closure of all of the(d) company's movie theatres due to the COVID-19 pandemic, plus subsequent nonrecurring costs related to reopening theatres. Reflects nonrecurring costs related to the closure of the company's hotels(e) and resorts due to reduced occupancy as a result of the COVID-19 pandemic, plus subsequent nonrecurring costs related to reopening hotels.(f) Impairment charges related to intangible assets (trade name) and several theatre locations. Represents the tax effect related to adjustments (b), (c), (d), (e) and (f)(g) to net earnings (loss), calculated using statutory tax rates of 29.6% for the fiscal 2020 periods and 26.1% for the fiscal 2019 periods.

Reconciliation of Net earnings (loss) to Adjusted EBITDA(Unaudited)(In thousands) 13 Weeks Ended 26 Weeks Ended June 25, June 27, June 25, June 27,

2020 2019 2020 2019

Net earnings (loss) $ (27,029 ) $ 18,066 $ (46,381 ) $ 19,926 attributable to The MarcusCorporationAdd (deduct):Investment income (836 ) (175 ) (141 ) (648 )

Interest expense 3,529 3,093 6,045 6,152

Other expense 591 480 1,181 960

Loss on disposition of 36 147 48 140 property, equipment andother assetsEquity losses from 428 84 485 168 unconsolidated jointventuresNet (earnings) loss 125 171 (23 ) 105 attributable tononcontrolling interestsIncome tax expense (29,906 ) 5,609 (36,476 ) 5,622 (benefit)Depreciation and 18,845 18,273 37,878 34,258 amortizationShare-based compensation 1,190 949 2,178 1,726 expenses (a)Acquisition/preopening - 167 - 1,976 expenses - theatres (b)Preopening expenses - - 2,679 - 3,914 hotels (c)Property closure/reopening 670 - 3,457 - expenses - theatres (d)Property closure/reopening 2,311 - 5,041 - expenses - hotels (e)Impairment charges (f) - - 8,712 -

Adjusted EBITDA $ (30,046 ) $ 49,543 $ (17,996 ) $ 74,299

(a) Non-cash charges related to share-based compensation programs.

Acquisition and preopening costs incurred related to the Movie Tavern(b) acquisition.

Preopening costs incurred related to the conversion of the InterContinental(c) Milwaukee into Saint Kate(r) - The Arts Hotel.

Reflects nonrecurring costs related to the required closure of all of the(d) company's movie theatres due to the COVID-19 pandemic, plus subsequent nonrecurring costs related to reopening theatres.

Reflects nonrecurring costs related to the closure of the company's hotels(e) and resorts due to reduced occupancy as a result of the COVID-19 pandemic, plus subsequent nonrecurring costs related to reopening hotels.

Impairment charges related to intangible assets (trade name) and several(f) theatre locations.

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CONTACT: For additional information, contact: Douglas A. Neis (414) 905-1100