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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 June 30, 2022
| | | | | |
o | 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 incorporation or organization) | | (I.R.S. Employer Identification No.) |
| | |
100 East Wisconsin Avenue, Suite 1900 Milwaukee ,Wisconsin | | 53202-4125 |
(Address of principal executive offices) | | (Zip Code) |
Registrant’s telephone number, including area code: (414) 905-1000
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | |
Title of each class | Trading symbol(s) | Name of each exchange on which registered |
Common Stock, $1.00 par value | MCS | New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 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.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act (Check One).
| | | | | | | | | | | |
Large accelerated filer | o | Accelerated filer | x |
Non-accelerated filer | o | Smaller reporting company | o |
| | Emerging growth company | o |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
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 AUGUST 1, 2022 – 24,395,412
CLASS B COMMON STOCK OUTSTANDING AT AUGUST 1, 2022 –7,110,875
THE MARCUS CORPORATION
INDEX
PART I – FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
THE MARCUS CORPORATION
Consolidated Balance Sheets
(in thousands, except share and per share data)
| | | | | | | | | | | |
| June 30, 2022 | | December 30, 2021 |
ASSETS | | | |
Current assets: | | | |
Cash and cash equivalents | $ | 57,741 | | | $ | 17,658 | |
Restricted cash | 5,677 | | | 6,396 | |
Accounts receivable, net of reserves of $169 and $1,001, respectively | 26,273 | | | 28,902 | |
Government grants receivable | — | | | 4,335 | |
Refundable income taxes | — | | | 22,435 | |
Assets held for sale | 521 | | | 4,856 | |
Other current assets | 19,683 | | | 15,364 | |
Total current assets | 109,895 | | | 99,946 | |
| | | |
Property and equipment: | | | |
Land and improvements | 129,802 | | | 129,642 | |
Buildings and improvements | 766,057 | | | 756,974 | |
Leasehold improvements | 167,316 | | | 166,060 | |
Furniture, fixtures and equipment | 383,997 | | | 375,650 | |
Finance lease right-of-use assets | 75,262 | | | 75,124 | |
Construction in progress | 3,652 | | | 6,000 | |
Total property and equipment | 1,526,086 | | | 1,509,450 | |
Less accumulated depreciation and amortization | 770,460 | | | 738,258 | |
Net property and equipment | 755,626 | | | 771,192 | |
| | | |
Operating lease right-of-use assets | 209,264 | | | 217,072 | |
| | | |
Other assets: | | | |
Investments in joint ventures | 2,202 | | | 2,335 | |
Goodwill | 75,052 | | | 75,095 | |
Deferred incomes taxes | 10,198 | | | 10,032 | |
Other | 12,398 | | | 12,689 | |
Total other assets | 99,850 | | | 100,151 | |
TOTAL ASSETS | $ | 1,174,635 | | | $ | 1,188,361 | |
See accompanying condensed notes to consolidated financial statements.
THE MARCUS CORPORATION
Consolidated Balance Sheets
(in thousands, except share and per share data)
| | | | | | | | | | | |
| June 30, 2022 | | December 30, 2021 |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | |
Current liabilities: | | | |
Accounts payable | $ | 38,335 | | | $ | 35,781 | |
Income taxes | 283 | | | — | |
Taxes other than income taxes | 19,219 | | | 19,566 | |
Accrued compensation | 18,879 | | | 20,474 | |
Other accrued liabilities | 59,334 | | | 59,678 | |
Short-term borrowings | 46,628 | | | 47,346 | |
Current portion of finance lease obligations | 2,489 | | | 2,561 | |
Current portion of operating lease obligations | 16,291 | | | 16,795 | |
Current maturities of long-term debt | 11,077 | | | 10,967 | |
Total current liabilities | 212,535 | | | 213,168 | |
| | | |
Finance lease obligations | 16,116 | | | 17,192 | |
| | | |
Operating lease obligations | 207,713 | | | 216,064 | |
| | | |
Long-term debt | 203,720 | | | 204,177 | |
| | | |
Deferred income taxes | 25,125 | | | 26,183 | |
| | | |
Other long-term obligations | 56,693 | | | 57,963 | |
| | | |
Equity: | | | |
Shareholders’ equity attributable to The Marcus Corporation | | | |
Preferred Stock, $1 par; authorized 1,000,000 shares; none issued | — | | | — | |
Common Stock, $1 par; authorized 50,000,000 shares; issued 24,498,243 shares at June 30, 2022 and 24,345,356 shares at December 30, 2021 | 24,498 | | | 24,345 | |
Class B Common Stock, $1 par; authorized 33,000,000 shares; issued and outstanding 7,110,875 shares at June 30, 2022 and 7,130,125 shares at December 30, 2021 | 7,111 | | | 7,130 | |
Capital in excess of par | 150,565 | | | 145,656 | |
Retained earnings | 283,364 | | | 289,306 | |
Accumulated other comprehensive loss | (10,529) | | | (11,444) | |
| 455,009 | | | 454,993 | |
Less cost of Common Stock in treasury (112,282 shares at June 30, 2022 and 48,111 shares at December 30, 2021) | (2,276) | | | (1,379) | |
Total shareholders’ equity attributable to The Marcus Corporation | 452,733 | | | 453,614 | |
Noncontrolling interest | — | | | — | |
Total equity | 452,733 | | | 453,614 | |
| | | |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 1,174,635 | | | $ | 1,188,361 | |
See accompanying condensed notes to consolidated financial statements.
THE MARCUS CORPORATION
Consolidated Statements of Earnings (Loss)
(in thousands, except per share data)
| | | | | | | | | | | | | | | | | | | | | | | |
| 13 Weeks Ended | | 26 Weeks Ended |
| June 30, 2022 | | July 1, 2021 | | June 30, 2022 | | July 1, 2021 |
Revenues: | | | | | | | |
Theatre admissions | $ | 63,087 | | | $ | 24,915 | | | $ | 101,504 | | | $ | 35,600 | |
Rooms | 28,865 | | | 17,332 | | | 46,295 | | | 26,376 | |
Theatre concessions | 58,147 | | | 23,061 | | | 93,611 | | | 32,980 | |
Food and beverage | 19,014 | | | 9,591 | | | 33,525 | | | 15,503 | |
Other revenues | 21,192 | | | 14,231 | | | 39,999 | | | 26,125 | |
| 190,305 | | | 89,130 | | | 314,934 | | | 136,584 | |
Cost reimbursements | 8,250 | | | 3,417 | | | 15,863 | | | 6,750 | |
Total revenues | 198,555 | | | 92,547 | | | 330,797 | | | 143,334 | |
| | | | | | | |
Costs and expenses: | | | | | | | |
Theatre operations | 61,737 | | | 28,877 | | | 106,165 | | | 47,147 | |
Rooms | 10,471 | | | 7,072 | | | 18,674 | | | 12,337 | |
Theatre concessions | 22,993 | | | 10,037 | | | 38,186 | | | 14,533 | |
Food and beverage | 15,035 | | | 7,806 | | | 27,175 | | | 13,176 | |
Advertising and marketing | 5,978 | | | 3,819 | | | 10,459 | | | 6,368 | |
Administrative | 17,627 | | | 15,963 | | | 36,708 | | | 29,279 | |
Depreciation and amortization | 16,752 | | | 18,494 | | | 33,983 | | | 36,473 | |
Rent | 6,578 | | | 6,344 | | | 12,828 | | | 12,685 | |
Property taxes | 4,980 | | | 4,468 | | | 9,725 | | | 9,207 | |
Other operating expenses | 9,261 | | | 8,628 | | | 18,935 | | | 13,418 | |
Impairment charges | — | | | 3,732 | | | — | | | 3,732 | |
Reimbursed costs | 8,250 | | | 3,417 | | | 15,863 | | | 6,750 | |
Total costs and expenses | 179,662 | | | 118,657 | | | 328,701 | | | 205,105 | |
| | | | | | | |
Operating income (loss) | 18,893 | | | (26,110) | | | 2,096 | | | (61,771) | |
| | | | | | | |
Other income (expense): | | | | | | | |
Investment income (loss) | (459) | | | 120 | | | (727) | | | 160 | |
Interest expense | (4,063) | | | (4,907) | | | (8,155) | | | (9,750) | |
Other expense | (584) | | | (628) | | | (1,161) | | | (1,256) | |
Gain (loss) on disposition of property, equipment and other assets | (69) | | | (164) | | | 355 | | | 2,040 | |
Equity earnings ( losses) from unconsolidated joint ventures | 7 | | | — | | | (134) | | | — | |
| (5,168) | | | (5,579) | | | (9,822) | | | (8,806) | |
| | | | | | | |
Earnings (loss) before income taxes | 13,725 | | | (31,689) | | | (7,726) | | | (70,577) | |
Income tax expense ( benefit) | 4,765 | | | (8,323) | | | (1,784) | | | (19,081) | |
Net earnings (loss) | 8,960 | | | (23,366) | | | (5,942) | | | (51,496) | |
Net earnings (loss) attributable to noncontrolling interests | — | | | — | | | — | | | — | |
Net earnings (loss) attributable to The Marcus Corporation | $ | 8,960 | | | (23,366) | | | $ | (5,942) | | | $ | (51,496) | |
| | | | | | | |
Net earnings (loss) per share - basic: | | | | | | | |
Common Stock | $ | 0.29 | | | $ | (0.76) | | | $ | (0.19) | | | $ | (1.71) | |
Class B Common Stock | $ | 0.26 | | | $ | (0.68) | | | $ | (0.18) | | | $ | (1.44) | |
| | | | | | | |
Net earnings (loss) per share - diluted: | | | | | | | |
Common Stock | $ | 0.24 | | | $ | (0.76) | | | $ | (0.19) | | | $ | (1.71) | |
Class B Common Stock | $ | 0.23 | | | $ | (0.68) | | | $ | (0.18) | | | $ | (1.44) | |
See accompanying condensed notes to consolidated financial statements.
THE MARCUS CORPORATION
Consolidated Statements of Comprehensive Income (Loss)
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | |
| 13 Weeks Ended | | 26 Weeks Ended |
| June 30, 2022 | | July 1, 2021 | | June 30, 2022 | | July 1, 2021 |
| | | | | | | |
Net earnings (loss) | $ | 8,960 | | | $ | (23,366) | | | $ | (5,942) | | | $ | (51,496) | |
Other comprehensive income (loss), net of tax: | | | | | | | |
Amortization of the net actuarial loss and prior service credit related to the pension, net of tax effect of $67, $86, $134 and $172 , respectively | 190 | | | 242 | | | 380 | | | 484 | |
Fair market value adjustment of interest rate swap, net of tax effect (benefit) of $37, $(2), $116 and $4, respectively | 106 | | | (7) | | | 329 | | | 10 | |
Reclassification adjustment on interest rate swap included in interest expense, net of tax effect of $31, $43, $72 and $111, respectively | 88 | | | 121 | | | 206 | | | 314 | |
Other comprehensive income | 384 | | | 356 | | | 915 | | | 808 | |
Comprehensive income (loss) | 9,344 | | | (23,010) | | | (5,027) | | | (50,688) | |
Comprehensive earnings (loss) attributable to noncontrolling interests | — | | | — | | | — | | | — | |
Comprehensive income (loss) attributable to The Marcus Corporation | $ | 9,344 | | | $ | (23,010) | | | $ | (5,027) | | | $ | (50,688) | |
See accompanying condensed notes to consolidated financial statements.
THE MARCUS CORPORATION
Consolidated Statements of Cash Flows
(in thousands)
| | | | | | | | | | | |
| 26 Weeks Ended |
| June 30, 2022 | | July 1, 2021 |
| | | |
OPERATING ACTIVITIES: | | | |
Net loss | $ | (5,942) | | | $ | (51,496) | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | | | |
Losses on investments in joint ventures | 134 | | | — | |
Gain on disposition of property, equipment and other assets | (355) | | | (2,040) | |
Impairment charges | — | | | 3,732 | |
Depreciation and amortization | 33,983 | | | 36,473 | |
Amortization of debt issuance costs | 826 | | | 1,244 | |
Share-based compensation | 4,572 | | | 4,152 | |
Deferred income taxes | (1,505) | | | (19,181) | |
Other long-term obligations | (49) | | | 1,180 | |
Contribution of the Company’s stock to savings and profit-sharing plan | 956 | | | 1,012 | |
Changes in operating assets and liabilities: | | | |
Accounts receivable | 2,629 | | | (4,944) | |
Government grants receivable | 4,335 | | | 4,913 | |
Other assets | (4,294) | | | (1,712) | |
Operating leases | (1,047) | | | (2,484) | |
Accounts payable | 551 | | | 6,369 | |
Income taxes | 22,720 | | | 6,003 | |
Taxes other than income taxes | (347) | | | (654) | |
Accrued compensation | (1,595) | | | 6,650 | |
Other accrued liabilities | (344) | | | 1,102 | |
Total adjustments | 61,170 | | | 41,815 | |
Net cash provided by (used in) operating activities | 55,228 | | | (9,681) | |
| | | |
INVESTING ACTIVITIES: | | | |
Capital expenditures | (16,341) | | | (6,195) | |
Proceeds from disposals of property, equipment and other assets | 4,821 | | | 4,297 | |
| | | |
| | | |
Purchase of trading securities | — | | | (1,906) | |
| | | |
Other investing activities | 45 | | | 59 | |
Net cash used in investing activities | (11,475) | | | (3,745) | |
| | | |
FINANCING ACTIVITIES: | | | |
Debt transactions: | | | |
Proceeds from borrowings on revolving credit facility | 22,000 | | | 66,500 | |
Repayment of borrowings on revolving credit facility | (22,000) | | | (46,500) | |
| | | |
Repayments on short-term borrowings | (820) | | | (4,150) | |
Principal payments on long-term debt | (851) | | | (187) | |
| | | |
Debt issuance costs | — | | | (4) | |
Principal payments on finance lease obligations | (1,336) | | | (1,329) | |
Equity transactions: | | | |
Treasury stock transactions, except for stock options | (1,461) | | | (1,236) | |
Exercise of stock options | 79 | | | 1,374 | |
| | | |
Net cash (used in) provided by financing activities | (4,389) | | | 14,468 | |
Net increase in cash, cash equivalents and restricted cash | 39,364 | | | 1,042 | |
Cash, cash equivalents and restricted cash at beginning of period | 24,054 | | | 14,088 | |
Cash, cash equivalents and restricted cash at end of period | $ | 63,418 | | | $ | 15,130 | |
| | | |
Supplemental Information: | | | |
Interest paid, net of amounts capitalized | $ | 7,054 | | | $ | 7,719 | |
Income taxes refunded, including interest earned | 22,998 | | | 5,910 | |
Change in accounts payable for additions to property, equipment and other assets | 2,003 | | | 400 | |
See accompanying condensed notes to consolidated financial statements.
THE MARCUS CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE 13 AND 26 WEEKS ENDED JUNE 30, 2022
(in thousands, except share and per share data)
1. General
Basis of Presentation - The unaudited consolidated financial statements for the 13 and 26 weeks ended June 30, 2022 and July 1, 2021 have been prepared by the Company. In the opinion of management, all adjustments, consisting of normal recurring adjustments necessary to present fairly the unaudited interim financial information at June 30, 2022, and for all periods presented, have been made. The results of operations during the interim periods are not necessarily indicative of the results of operations for the entire year or other interim periods. However, the unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 30, 2021.
Accounting Policies - Refer to the Company’s audited consolidated financial statements (including footnotes) for the fiscal year ended December 30, 2021, contained in the Company’s Annual Report on Form 10-K for such year, for a description of the Company’s accounting policies.
Noncontrolling Interests - The Company has an ownership interest greater than 50% in one joint venture that is considered a Variable Interest Entity (VIE) that is included in the accounts of the Company. The Company is the primary beneficiary of the VIE and the Company’s interest is considered a majority voting interest. The equity interest of outside owners in consolidated entities is recorded as noncontrolling interests in the consolidated balance sheets, and their share of earnings is recorded as net earnings (loss) attributable to noncontrolling interests in the consolidated statements of earnings (loss) in accordance with the partnership agreement. Due to the cumulative losses of the entity, the noncontrolling interest balance is $0 as of June 30, 2022 and December 30, 2021. The Company will not record earnings or losses from noncontrolling interest until the entity returns to profitability.
Depreciation and Amortization - Depreciation and amortization of property and equipment are provided using the straight-line method over the shorter of the estimated useful lives of the assets or any related lease terms. Depreciation expense totaled $16,744 and $33,967 for the 13 and 26 weeks ended June 30, 2022, respectively, and $18,475 and $36,433 for the 13 and 26 weeks ended July 1, 2021, respectively.
Assets Held for Sale – Long-lived assets that are expected to be sold within the next 12 months and meet the other relevant held-for-sale criteria are classified as assets held for sale and included within current assets on the consolidated balance sheet. Assets held for sale are measured at the lower of their carrying value or their fair value less costs to sell the asset. As of June 30, 2022, assets held for sale consists primarily of excess land.
Long-Lived Assets – The Company periodically considers whether indicators of impairment of long-lived assets held for use are present. This includes quantitative and qualitative factors, including evaluating the historical actual operating performance of the long-lived assets and assessing the potential impact of recent events and transactions impacting the long-lived assets. If such indicators are present, the Company determines if the long-lived assets are recoverable by assessing whether the sum of the estimated undiscounted future cash flows attributable to such assets is less than their carrying amounts. If the long-lived assets are not recoverable, the Company recognizes any impairment losses based on the excess of the carrying amount of the assets over their fair value. There were no indicators of impairment identified during the 26 weeks ended June 30, 2022.
Goodwill – The Company reviews goodwill for impairment annually or more frequently if certain indicators arise. The Company performs its annual impairment test on the first day of the fiscal fourth quarter. There were no indicators of impairment identified during the 26 weeks ended June 30, 2022 or July 1, 2021.
Earnings (Loss) Per Share - Net earnings (loss) per share (EPS) of Common Stock and Class B Common Stock is computed using the two class method. Basic net earnings (loss) per share is computed by dividing net earnings (loss) by the weighted-average number of common shares outstanding. Diluted net earnings (loss) per share is computed by dividing net earnings (loss) by the weighted-average number of common shares outstanding, adjusted for the effect of dilutive stock options and convertible debt instruments using the if-converted method. Convertible Class B Common Stock and convertible debt instruments are reflected on an if-converted basis when dilutive to Common Stock. The computation of the
diluted net earnings (loss) per share of Common Stock assumes the conversion of Class B Common Stock in periods that have net earnings since it would be dilutive to Common Stock earnings per share, while the diluted net earnings (loss) per share of Class B Common Stock does not assume the conversion of those shares.
Holders of Common Stock are entitled to cash dividends per share equal to 110% of all dividends declared and paid on each share of Class B Common Stock. As such, the undistributed earnings (losses) for each period are allocated based on the proportionate share of entitled cash dividends.
The following table illustrates the computation of Common Stock basic and diluted net earnings (loss) per share and provides a reconciliation of the number of weighted-average basic and diluted shares outstanding:
| | | | | | | | | | | | | | | | | | | | | | | |
| 13 Weeks Ended | | 26 Weeks Ended |
| June 30, 2022 | | July 1, 2021 | | June 30, 2022 | | July 1, 2021 |
| |
Numerator: | | | | | | | |
Net earnings (loss) attributable to The Marcus Corporation | $ | 8,960 | | | $ | (23,366) | | | $ | (5,942) | | | $ | (51,496) | |
Denominator: | | | | | | | |
Denominator for basic EPS | 31,492 | | | 31,404 | | | 31,469 | | | 31,300 | |
Effect of dilutive employee stock options | 40 | | | — | | | — | | | — | |
Effect of convertible notes | 9,085 | | | — | | | — | | | — | |
Denominator for diluted EPS | 40,617 | | | 31,404 | | | 31,469 | | | 31,300 | |
Net earnings (loss) per share - basic: | | | | | | | |
Common Stock | $ | 0.29 | | | $ | (0.76) | | | $ | (0.19) | | | $ | (1.71) | |
Class B Common Stock | $ | 0.26 | | | $ | (0.68) | | | $ | (0.18) | | | $ | (1.44) | |
Net earnings (loss) per share - diluted: | | | | | | | |
Common Stock | $ | 0.24 | | | $ | (0.76) | | | $ | (0.19) | | | $ | (1.71) | |
Class B Common Stock | $ | 0.23 | | | $ | (0.68) | | | $ | (0.18) | | | $ | (1.44) | |
For the periods when the Company reports a net loss, common stock equivalents are excluded from the computation of diluted loss per share as their inclusion would have an antidilutive effect. During the 26 weeks ended June 30, 2022, and the 13 and 26 weeks ended July 1, 2021, approximately 61,791, 165,439 and 142,746 common stock equivalents, respectively, were excluded from the computation of diluted loss per share due to the Company’s net loss. During the 26 weeks ended June 30, 2022, and the 13 and 26 weeks ended July 1, 2021, 9,084,924 shares related to the convertible notes were excluded from the computation of diluted loss per share as the effect would have been anti-dilutive.
Shareholders’ Equity - Activity impacting total shareholders’ equity attributable to The Marcus Corporation and noncontrolling interest for the 13 and 26 weeks ended June 30, 2022 and July 1, 2021 was as follows:
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| Common Stock | | Class B Common Stock | | Capital in Excess of Par | | Retained Earnings | | Accumulated Other Comprehensive Income (Loss) | | Treasury Stock | | Shareholders’ Equity Attributable to The Marcus Corporation | | Non- controlling Interest | | Total Equity |
BALANCES AT DECEMBER 30, 2021 | $ | 24,345 | | | $ | 7,130 | | | $ | 145,656 | | | $ | 289,306 | | | $ | (11,444) | | | $ | (1,379) | | | $ | 453,614 | | | $ | — | | | $ | 453,614 | |
Exercise of stock options | — | | | — | | | (5) | | | — | | | — | | | 31 | | | 26 | | | — | | | 26 | |
Purchase of treasury stock | — | | | — | | | — | | | — | | | — | | | (1,373) | | | (1,373) | | | — | | | (1,373) | |
Savings and profit-sharing contribution | 56 | | | — | | | 900 | | | — | | | — | | | — | | | 956 | | | — | | | 956 | |
Reissuance of treasury stock | — | | | — | | | 1 | | | — | | | — | | | 8 | | | 9 | | | — | | | 9 | |
Issuance of non-vested stock | 78 | | | — | | | (236) | | | — | | | — | | | 158 | | | — | | | — | | | — | |
Shared-based compensation | — | | | — | | | 2,917 | | | — | | | — | | | — | | | 2,917 | | | — | | | 2,917 | |
Other | — | | | — | | | 1 | | | (1) | | | — | | | — | | | — | | | — | | | — | |
Conversions of Class B Common Stock | 19 | | | (19) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Comprehensive income (loss) | — | | | — | | | — | | | (14,902) | | | 531 | | | — | | | (14,371) | | | — | | | (14,371) | |
BALANCES AT MARCH 31, 2022 | $ | 24,498 | | | $ | 7,111 | | | $ | 149,234 | | | $ | 274,403 | | | $ | (10,913) | | | $ | (2,555) | | | $ | 441,778 | | | $ | — | | | $ | 441,778 | |
Exercise of stock options | — | | | — | | | (16) | | | — | | | — | | | 69 | | | 53 | | | — | | | 53 | |
Purchase of treasury stock | — | | | — | | | — | | | — | | | — | | | (104) | | | (104) | | | — | | | (104) | |
Reissuance of treasury stock | — | | | — | | | (2) | | | — | | | — | | | 9 | | | 7 | | | — | | | 7 | |
Issuance of non-vested stock | — | | | — | | | (305) | | | — | | | — | | | 305 | | | — | | | — | | | — | |
Shared-based compensation | — | | | — | | | 1,655 | | | — | | | — | | | — | | | 1,655 | | | — | | | 1,655 | |
Other | — | | | — | | | (1) | | | 1 | | | — | | | — | | | — | | | — | | | — | |
Comprehensive income | — | | | — | | | — | | | 8,960 | | | 384 | | | — | | | 9,344 | | | — | | | 9,344 | |
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BALANCES AT JUNE 30, 2022 | $ | 24,498 | | | $ | 7,111 | | | $ | 150,565 | | | $ | 283,364 | | | $ | (10,529) | | | $ | (2,276) | | | $ | 452,733 | | | $ | — | | | $ | 452,733 | |
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| Common Stock | | Class B Common Stock | | Capital in Excess of Par | | Retained Earnings | | Accumulated Other Comprehensive Income (Loss) | | Treasury Stock | | Shareholders’ Equity Attributable to The Marcus Corporation | | Non- controlling Interest | | Total Equity |
BALANCES AT DECEMBER 31, 2020 | $ | 23,264 | | | $ | 7,926 | | | $ | 153,529 | | | $ | 331,897 | | | $ | (14,933) | | | $ | (2,960) | | | $ | 498,723 | | | $ | — | | | $ | 498,723 | |
Adoption of ASU No. 2020-06 | — | | | — | | | (16,511) | | | 702 | | | — | | | — | | | (15,809) | | | — | | | (15,809) | |
Exercise of stock options | — | | | — | | | (659) | | | — | | | — | | | 1,951 | | | 1,292 | | | — | | | 1,292 | |
Purchase of treasury stock | — | | | — | | | — | | | — | | | — | | | (1,181) | | | (1,181) | | | — | | | (1,181) | |
Savings and profit-sharing contribution | 44 | | | — | | | 968 | | | — | | | — | | | — | | | 1,012 | | | — | | | 1,012 | |
Reissuance of treasury stock | — | | | — | | | 2 | | | — | | | — | | | 10 | | | 12 | | | — | | | 12 | |
Issuance of non-vested stock | 221 | | | — | | | (367) | | | — | | | — | | | 146 | | | — | | | — | | | — | |
Shared-based compensation | — | | | — | | | 1,484 | | | — | | | — | | | — | | | 1,484 | | | — | | | 1,484 | |
Other | — | | | — | | | — | | | (1) | | | — | | | 1 | | | — | | | — | | | — | |
Conversions of Class B Common Stock | 520 | | | (520) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Comprehensive income (loss) | — | | | — | | | — | | | (28,130) | | | 452 | | | — | | | (27,678) | | | — | | | (27,678) | |
BALANCES AT APRIL 1, 2021 | $ | 24,049 | | | $ | 7,406 | | | $ | 138,446 | | | $ | 304,468 | | | $ | (14,481) | | | $ | (2,033) | | | $ | 457,855 | | | $ | — | | | $ | 457,855 | |
Exercise of stock options | — | | | — | | | (40) | | | — | | | — | | | 122 | | | 82 | | | — | | | 82 | |
Purchase of treasury stock | — | | | — | | | — | | | — | | | — | | | (73) | | | (73) | | | — | | | (73) | |
Reissuance of treasury stock | — | | | — | | | (1) | | | — | | | — | | | 7 | | | 6 | | | — | | | 6 | |
Issuance of non-vested stock | 18 | | | — | | | (157) | | | — | | | — | | | 139 | | | — | | | — | | | — | |
Shared-based compensation | — | | | — | | | 2,668 | | | — | | | — | | | — | | | 2,668 | | | — | | | 2,668 | |
Conversions of Class B Common Stock | 275 | | | (275) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Comprehensive income (loss) | — | | | — | | | — | | | (23,366) | | | 356 | | | — | | | (23,010) | | | — | | | (23,010) | |
BALANCES AT JULY 1, 2021 | $ | 24,342 | | | $ | 7,131 | | | $ | 140,916 | | | $ | 281,102 | | | $ | (14,125) | | | $ | (1,838) | | | $ | 437,528 | | | $ | — | | | $ | 437,528 | |
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Accumulated Other Comprehensive Loss – Accumulated other comprehensive loss presented in the accompanying consolidated balance sheets consists of the following, all presented net of tax:
| | | | | | | | | | | |
| June 30, 2022 | | December 30, 2021 |
| |
Unrecognized gain (loss) on interest rate swap agreements | $ | 26 | | | $ | (509) | |
Net unrecognized actuarial loss for pension obligation | (10,555) | | | $ | (10,935) | |
| $ | (10,529) | | | $ | (11,444) | |
Fair Value Measurements - Certain financial assets and liabilities are recorded at fair value in the consolidated financial statements. Some are measured on a recurring basis while others are measured on a non-recurring basis. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. A fair value measurement assumes that a transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability.
The Company’s assets and liabilities measured at fair value are classified in one of the following categories:
Level 1 - Assets or liabilities for which fair value is based on quoted prices in active markets for identical instruments as of the reporting date. At June 30, 2022 and December 30, 2021, respectively, the Company’s $3,789 and $4,617 of debt and equity securities classified as trading were valued using Level 1 pricing inputs and were included in other current assets. At June