The Marcus Corporation (MCS) 9 Aug 202020 Q2 Earnings call transcript

Good morning, everyone, and welcome to the Marcus Corporation Second Quarter Earnings Conference Call. My name is Crystal, and I will be your operator for today. At this time, all participants are in listen-only mode.

We will conduct a question-and-answer session towards the end of this conference [Operator Instructions] As a reminder, this conference is being recorded.

Joining us today are Greg Marcus, President and Chief Executive Officer; and Doug Neis, Executive Vice President, Chief Financial Officer and Treasurer of the Marcus Corporation. like the I'd Mr. over time, this to program turn to At for opening Neis remarks. his sir. ahead, go Please

Well, thank and XXXX you, Crystal, second our Welcome quarter fiscal to conference call. good morning, everybody.

stating Securities do Harbors established to number I from forward-looking our we liability of on Litigation by today, statements on for intend usual, As to of begin by qualify Reform making we Act. need a all which Private call the plan the Safe

use of generally anticipate, may forward-looking our we of identified Our such be believe, words by expect similar statements as import. words or

social flows, Our our uncertainties, the pandemic cash including, - existing forward-looking to our of hotels results future businesses, theater, liquidity, markets credit but our condition, statements differ are related following may level results on to to limited, the and to of adverse government requirements subject the and financial and to resorts such the relaxation effects service certain ability risks actual and requirements. of customer operations, indebtedness. distancing expected, duration COVID-XX and not of which of demand and materially the And those the from pandemic and access cause COVID-XX restrictions

COVID-XX businesses. are information, cautioned and place are manage long-term our reliance based implemented forward-looking theater based our and our about temporary pandemic. COVID-XX a forward-looking of expected on that assumption the following or hotel be to COVID-XX assumptions, permanent the not The associated Our to currently related result available closures, pandemic statements reoccur, and or with the temporary upon to availability to our as including not difficulties pandemic only layoffs are Listeners we've continued which statements. workforce closures undue restaurant assumptions upon ability to the our closures of the the our are on effects of

Forward-Looking of Risk Form XX-K impact the statements uncertainties, and fiscal press report Statements XXXX And we're section which included second under factors, fiscal XX-Q and achieve quarter Form morning annual XX-Q, XXXX issued Form heading forward-looking this on in our today. Factors our quarterly could filing the are expectations release, announcing our the reports identified we our subsequent in including the to Additional that in results. ability risks our the on

and in certainly we'd When our the be reopening future. if the certainly along properties we needed. reflect the we spend with answer of quarter properties, numbers of looking be happy that, obviously spend of plans our past such begin on post then I'll businesses back on balance our for quarter on a - I'll our All do time still our can Regulation which with sharing you access Greg, liquidity. us. who let's to briefly SEC's focus spending ahead. but With remarks pivot to more time we've you, and are the turn us, a current begun this few I where for remarks our up revisit for not prepared We'll - to rest normal www.marcuscorp.com. today reopening the a that at - as call questions, open when sheet be we as disclosures any quarter This website. once as over And I will less behind could topics will some applicable by prepared again website minutes at begin. and today also our G will will all most few questions, call his of follow-up our looking that, the Once

our businesses entire closed So with quarter. at you've seen results looking the the numbers. operating Essentially, of you're for all

followed assorted our which online popcorn, parking we operating six only beverage very XXXX, and end Grand version limited lot the and that as of hotels to opened and at Hilton but the subsequent reduced sales a basis after curbside with the in some still test hotels the other on closed cinemas, our On In quarter, revenues in new Skirvin five theater Madison resorts were the beginning and began towards the primarily that June as and and of a on pizza limited We Pfister the and side, hotels couple theaters the from operated quarter during the opened is food had opened quarter; the we well very weeks items. segment, by drive-in, three protocols; of first weeks. Hilton and of the of the Geneva, June June. they in X, occupancies significantly beginning had reopening

the associates release the to items of property in portion of non-recurring approximately payments pandemic. expenses A closures. did, laid COVID-XX related this a and the quarter $X of again, once we continuation as impact resorts directly subsequent notes, expenses million division. press of payroll with additional incurred As have the hotels closure We the reopening of and majority to and severance the expenses off our result represented made these several

of in cleaning related be of our for and results. see these also a to and also hotel our that to We net and theater protocols. non-recurring press this needs the implementing you favorable to began selected loss taxes with included In addressed. impact expenses incurring employee costs, related income training, new reported order reopening you purchases show reconciliation, We our that on operating to among items supply EBITDA a non-GAAP extensive our quarter significant had adjusted other properties the items, release reconciliation and adjustment

quarter. tax might be note larger income benefit will You that we a reported this than expected

during half In first XX.X% year. the second fact, the of from rate XX% was quarter our and income the effective tax

approximately changes was XX, $XX.X tax CARES impacted by an the from accounting benefit million, March of of Our adjustment XXXX favorably signing fiscal XXXX Act. the income method resulting several and

federal compared rate current of during federal tax the One of to including the allows the income to income CARES and was years, of taxable tax XXXX which losses XX% back XX%. be our Act fiscal statutory XXXX the provisions rate carried prior years to

in tax anticipate income remaining adjustment favorable our that this back effective range to during of to the quarters us the XX% income portion Excluding continue XX.X%. federal loss of the may of XXXX tax a will benefit, effective during our rate a income carry an XXXX be fiscal expected to for to to taxable that the rate allow XXXX We fiscal due XX% tax was to XX% rate. had that first income half fiscal loss tax years

this effective we will our rate XXXX fiscal reported result actual it net depending also believe won't just from estimated our different actual And this incur. with In the significant and benefit course, quarterly next We benefits filing operating method upon in both we're tax year. loss may be coming circumstances. our derived $XX.X or I income out facts of benefit improvement CARES reduce net and carrybacks that may and liquidity losses Act. the year changes rates claims of property, the just refund accounting qualified and that the Of QIP, tax primary came days, referenced, new for income from rules million,

earnings carryforwards fiscal a moment. used our loss when Shifting expect to fiscal just also which that prior the is tax may may a tax We future with in year approximate million portion in statement from that loss we XXXX result in tax well. apply also incurred for XXXX expect gears filed, be significant a possible income, the to in refund XXXX fiscal of may anticipated be $XX to as return our away

Movie acquisition. million cash during the cash Tavern the capital this year's the dollars fiscal total component continue on spent are $XX that to included quarter, half we last first on and we approximately the have the future theater expenditures expenditures most hold during totaled division XXXX for in Most several million capital first $XX of of the being. started Our time projects to approximately which compared of year

I sheet remind briefly on before let call entered to over you, once Now strength. position we Greg, that I'll me this the of and crisis again, a balance liquidity turn our from comment also position.

debt all Our the very ratio XX%. balance cash debt end a of XX%. capitalization than even a quarter, to second a on the still the ratio shutdown for essentially of carry, after our Net our net end was would balance low to of capitalization entire larger we modest the businesses at very what quarter, having our normally sheet was at of XXXX

monthly our could as support future peers, our significant our and keeps low be lease balance opportunities it underlying have arise. advantage periods Of screens payments. and our estate some in real and credit for provides hotels a estate majority thereby surplus company-owned payments if even fixed of XX% sheet. our real We underlying significant percentage for relatively even fixed the relative over lease our also the course, our larger of seven representing an reducing of own of This is cash we monthly our flow, our company and that monetized theaters, revenues to for

the endure the cash As to even COVID-XX to pandemic, we've been impacts the global and of previously crisis, prolonged. reported, of working we've in liquidity ensure if light sufficient preserve

As further to already issued XXXX, on support amended balance our our million loan A existing new credit April and you a agreement we senior know, XXX-day XX, term strong sheet. $XX.X

XXXX, XX, revolving our facility. a million $XXX of under had cash June million million availability of $XX approximately we of As credit and $XX balance approximately

the math. So can do you

estate may bit that and or with to a position. to adjusted possible maybe as availability, why sustain turn the plus the us remain to even EBITDA you cash we that the negative as Our sale month. fiscal call continue that that was And total combined to the a XXXX indicate that, of or about of and to Even very positions quarter closed. continue million properties number $XX $XX combined revolving Greg. a $XXX our be real little $XX we in million in With expense much the if you the our over in financing and into financing, tax refunds that add during believe scenario to a consider in continue unlikely CapEx strong even million we believe operations interest a We additional when million just income can see I'll XXXX, surplus credit of needed. additional doesn't well majority now XXXX,

Thanks Doug.

on earlier, focus we've remarks future. of my noted manage done to to to crisis today, and As Doug plans to do and are date, for through are I'm our what we the continuing where what are going some this

future like. can of a As unknowns will yet months the you look there about are imagine, what lot

as change. evolve this to will So truly situation not changed continue there changing and will the thing one that our is has unfolds. environment, rapidly unprecedented plans In not

to work organization. and of as decisions team and and experienced is well-being in the and communities. weeks for us has our everything this guided dedicated to been We've far growth throughout we've our will ahead months short and I history, our us safety believe night, in it And guide the so will a be priority, Our some leadership us in continue and developing day we well. continue make our associates, and done the tough that strong customers get as long for very throughout has thankful put had term. they strategies over position the and term. executing through continued crisis to This

harder. less cannot to our were because properties, They for and Words under people. I shifted it's bringing not we're all gratitude. proud surprisingly, people field. how associates, people have us. our as importance conditions. reopening and unprecedented. enough different we've they're working justice the I our am team - the we about As point talk I gratitude spoken, to this to back in do and the And up just They're to everyone of emphasize executive very the huge step them words before work alone at have of continue And don't to from now asking people meet challenges our

do this cannot And is not me, - so everyone you I'm this thankful for around alone.

and And as talking a now, in the spend headed said, each our about on and all reopening where to focus hotels few we divisions. is are where I'd theaters. of like So I've we're our minutes

to So our because far. the on governmental since let's is it still not start first of reopening the requirements so. do When hotels, with so any was hotels we and process our closed

most stay were considered restaurants in close, than bars and financially themselves a businesses required under the hotels prudent us definitions. for due made significant our it hotels essential rather to within We but that closed our to were open. Our demand to hotels drop close

individual our demand increase more in As reopening once be regarding freely hotels some it being we a an begin as closed. again. and travel than The reopening, a travelers ways, will In that mathematical even closed, what means losing we result, will is if business be by just exercise. our a less decisions opened position better in to driven and resorts money believe than being

fiscal our with and on the second bars, Grand subsequent the in beginning Pfister Madison, Skirvin quarter, in restaurants by the our Spa, X, June Geneva Hotel XXXX As our Hilton noted, including several of we June. Hilton hotels, followed hotel we've late Monona and reopened and several the of weeks in Terrace Resort

the for group the And business market, significantly manage other customer have the majority expected, recently limited As we number likely drive-to-leisure air from owners hotels initial The for the reduced. of transient primary also came remains will and customers travel as hotels term. remain near opened. the of in

We are quarter monitoring of to demand, hope during hotels the remaining and currently our market reopen third fiscal we XXXX. company-owned

art the importantly, pizza weekend. including space in our expect recovery may and museum, currently felt Downtown we the time And impact up this exhibit upcoming Hotel the was it that Arts more nearly to opened reopen one not originally art spaces the the we the restaurant floor provide all of Convention rooms lobby seen Milwaukee community, have we to but reopened space. Hilton expected, and wanted we most not of get that few our the yet, an In Saint while for Democratic Milwaukee. maybe bar, notice Hotel important fact, you the essentially National our will first past in had that step activate as we to is towards That public floors Kate first We're upcoming event. booking

reopen new reopening hotels, protocols. our operating As are we we with

associates industry restaurants include cleanliness, our practices have standards CleanCare new safety. for on incorporates to introducing enhanced branded spas, operating and that elements courses CleanCare best brand resorts, an processes Pledge following golf the focus our also and protocols new addition the with introduced hotels, examples to hotels, In and and guests social required easy-to-use all hospitality of Pledge our for spaces, we that CDC and our Key own for sanitization experience, and no-contact of cleaning standards at and gloves and making public technology them and spaces available with distancing a who protocols leading into outfitting and sanitization masks create low processes all guidelines. to incorporating wear beyond masks various enhanced in are go industry to

travel limited periods, occupancy that onset Most travel, by normally travel business some rates, far near as has drive-to-leisure in the expectations organizations future pandemic since likely we thus the I strong and to Similar U.S. environment. had which exceeded most of during to of experience term. lower in while have slowly the now starting the overall in And limit initial current COVID-XX generally increased hotels. has performance our the our current Looking they implemented time Retail than our be lower despite are segment. bans also early second come essential demand the March. continues still occupancy will to allow is the quarter, from occupancy only hotel, varied will reopened you relatively pricing this would significantly held tell year, while to

remainder of bookings significant period year. hotels for the last a fiscal group to the decrease same company-owned XXXX have in Our experienced compared

room in our Democratic to is at where catering desire group in as XXXX, room to group And this fiscal as the Convention, and encouraging hotels looking were is last people ahead directly time because group report, XXXX. and National this that of find year's - for fiscal fiscal we July XXXX this for fiscal in revenue where time resorts revenue speaks XXXX. majority decline year continuing We very commonly hosting XXXX. for this bookings, bookings the the bookings currently of travel and year is however, last congregate. in date a only referred believe anticipation at last for including of we Milwaukee revenue the industry group running the As behind Banquet slightly this of pace, were our to of DNC, we

our positive to canceled development the rebooking COVID-XX future bookings is Another fact of dates. for majority the due group are

events onetime such dates, Excluding as rebook couldn't the that DNC. to connected for those future

Ryder the rescheduled XXXX, for Milwaukee it our benefit recently will that XXXX. event major in was September was Another originally scheduled hotels, but Cup September

is group to this XXXX event pace. lose XXXX, disappointing While our contributing in it to

will RevPAR Hotel statistics very as next the with to historically be Forecasting growth such difficult this domestic gross product. have months during XX is closely the tracked XX macroeconomic very time. what revenues decline at or future traditional

focus economic XXXX past we system, closely. for the relatively guests. but segment to we our will marketing very will the overall other for to components or very trends associates our industry be term, approach particularly of monitoring I revenue be expect X/XX President, financial markets. and our our industry hotels. forward hotel the to and limited our will that hotel can crisis, be supply outstanding have will division reopening such important and look our operations, Most to of beneficial track be the After health our am our steady we Evans hotels. environment be demand the confident So we than generally safety future, industry, existing economy. our which the anticipate and experts Overall, of it longer new on near team took slow. how the will of shocks and unfolds, for as hotel trends message now in Conversely, the Michael the growth to foreseeable to manage this believe that believe remaining of pace In exceed Regardless our recovery the recover respective we his effectively

cleanliness tirelessly have best still to resorts rest the highest every hotels and that Our while the so and knowing easy can offer. receiving are associates guest of standards working are enjoying service that they award-winning our

of X prioritize health operating protocols well-being the multiple of to shift associates implement safety with guidelines, theaters safety in our we reopening with accordance goal On primary and local and designed to phased testing our of our and began of to guests. opening So with a theater June let's markets and the new our XX, plan division. in

During released Series the Harry this for the theaters as that older been initial months during new including to library classic such of a product, prior as waited film in Potter from as phase, closing films we've films showing well been be we have older combination while films, to films released.

operate to in As Unhinged, years, the in remaining you is acknowledge and stops restrictions films may it on is the will idea will in have have it are the Warner in local governmental in finally And it vast will U.S. majority After first open release not but other the it the appears XX. now date mark likely recent industry, we is open for that good announcement this in film it much-anticipated starts, which film with film Inception platform to times markets we Mutants further common for market clearer state U.S., we've rather and we every indicated August at increasingly be overseas opens be release currently restrictions can of new when the on that allowing has call released patterns studio the theaters, it movie XX. Tenet to to day August may of different the is many the any Rather, in on Warner scheduled a been will morning, days to lifted X, was New to be. appears and news several release. Disney's return that when they this the global that this used release theaters the will the it and scheduled particularly what Brothers' markets markets in scheduled released us markets initially. plans as as together a important different in of acknowledged we not new first The speak follow as now reopen. in for seen XXXX. Tenet release open date release September more lifted. follow that is as with pre-release

late theaters current release new in expect movies. reopen the these time we majority assuming for of such, the August in As schedule holds, to our

a when requiring as use masks the are the via to high-touch to throughout our app except implementing purchase signage with worn reopening especially sanitizer Theaters STAR, contact or are in shift; is As eating as measures in within include, theater Movie will app; guests cleaning, theater; and people to part in auditoriums; distancing; areas by measurements and initially two proprietary for Marcus through seating our wellness orders XX% tickets of health by social implementing the hand of a approach, up reserve and food designated staggering Specific be proper thorough frequency of ordering food number introducing allow checks and of new in alignment during CDC between Marcus seats we've the and cleanings; allowing face checkerboard Theatres encouraging social guests, our limit shows well our guidelines. capacity their which conjunction guests in distancing incorporates guidelines; encourage reopening the auditorium's showtimes theater. accordance gloves to common introduced area that not but to they experience to: S-T-A-R, with are drinking the for seats empty conducting low we groups between pattern requiring of allow the picked as or together for theater of safety surfaces; extra and limited in theaters, the providing reducing with in website online encouraging with mask associate theaters associate with time increasing appropriate each and and proper CDC

basis. will and expect ongoing to with guidelines on We be and policies updated evolve assessed an will continue time and

consumer to have have is possible, to guests who trust build been goal positive received to Our and as share extremely coming am we our test from quickly comments as I theaters. confidence X pleased and that the

an Our protocols. team has on executing done new job excellent

impact that opening repeating may capacity different in the worth on revenues. $X translate film shifting attendance adapt potentially reduce availability new Tuesdays reduction to normal attendance upon customers major in potential and in is to but weekends to their seat capacity the in counts. past Tuesdays up experience, of impact does is And different days relatively may Something by necessarily releases, attendance opening that's we equal come an $X times unaffected not showings reduction weekends before, at other believe but given based days may be day. and of Reduced almost our

film requirements for fiscal government of gradual first XXXX. films listed distancing months were to limits, and some that include box which our In increase new originally historically to during that believe press hours, auditoriums seating for that occur slate first with COVID-XX seek including we a due optimistic the films are result as addition, capacity multiple number the exhibition released originally sheltering to released, the social well operating the are be expected The will from of those of of blockbuster strong. films consumer very number those may is has fared remaining demand during multiple recessions. anticipated A and significant indicating as We scheduled interest, the industry in public anticipate Should of films by months of comfort be togetherness reduced multiple to scheduled the larger of we now gatherings. as driven people films that to pent-up theater an half XXXX, attempt movies. subsides a the one normalcy remain industry openings rebound We There with XXXX and pandemic, return span for that release. home films year for ramp-up benefit currently social staggered to lingering scheduled also will substantial to generate return to office normalcy. a may

product manage past and need that Just in in for the deliver to adapt the will for truly prepared our and we want Normally, the as opportunities elephant our entered would Rolando talented may in COVID-XX the including Rodriguez this release future, and film his call we streaming on in end the months to that this a plans result first, be prepared I point up I room my such through adapt reopening movie-going the last the speculation or at recognize their to be may video-on-demand, I'm month, and questions. pandemic ultimately and address But weeks studios films accelerating great new that ahead. as services. in experience certain been to and we've week. channels will incredibly There's how open that challenges alternate change PVOD, some distribution team a had of us the premium guests. distribute and process prepared to remarks

Of the released they that would, speculation shrink when course, Universal window AMC the and negotiated that films report, according on week for be select significantly last announced PVOD. increased to to exponentially deal

So I about suspect might wonder you that. think what we

So to this. me begin let say with,

Our studios are very the relationship with us. to film important

to move while in an investment recover economic fact, from content worldwide. closed, theatrical It's that. investment without We than over until a been there's film exhibition distribution. of months, that In the in film revenue, the the films continued confirmation derive have an of release have $XX to into theatrical the the Thus, new past believe studios industry to acknowledge an theaters vast their theaters direct no delay billion of that industry model our majority to billion rather the size actions believe an $XX and is are U.S. partners theatrical exhibition in $XX part appropriate customers. home studios and window big and return We significant we is interest both their experience the interest. to theatric of established their integral the billion of on studios theatrical preserve an aligned for a aligned value are reopen portion in

negotiations never will Second, start say I intend our with don't we upfront public, have conducted in now. studios that and to the we

models, windows, our et to as to should always we about have, financial cetera, private as terms, studio talk partners continue will it be. but in We

financial While distribution model speaking specifically business. to and in PVOD, of our what I'm about changes to to say our next any the applies

change any needs for like any studios, negotiation, successful Our customer. existing the in position exhibitor been and to the has win-win-win the be always model that a in the

perspective. put be I to grow in talk the Our of this also size common important goal should the all think it's to pie. PVOD

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business entertainment. the of in are We out-of-home

I mentioned that and as to innate of out seek get beings firmly interact want the and an experiences. Just desire earlier congregate. hotel house that in We travel my people have We we social with remarks to human believe people. believe

this In it fact, or be characteristic safe. human smart way, pandemic, argue being this same near continues for in vaccine improved everyone to that during treatments, it always is a just challenges whether underlying could reason very and is the face country our the you this an term, and won't

will get they significantly we consumers side of always seek to to similar the that of hose out-of-home other And of out already will them home, decide they've available in out than past. days, they a same signs to those We're entertainment other lower countries. in sought believe the to options We this, to at point when experiences pre-pandemic other a stay continue seeing have price fire and $XX.

for company future. this we both situation we can rapidly plans to healthy the in that of reviewing we've for their experience to model, our are none continually passionate continued changing theaters loyal about We've like tell, and business. we warranted. environment, last our continue component films conclusion, business this. forward over in in We theater in the is them an as we the distributing will with X relationship our that a to is rest customers. and a make changes important In investments exhibition challenging a made in believe theater movie of terms built look can significant built the to entertainment and circuit you As assured The our times second believe the I'm businesses, be in you will years,

team, stepped managers leadership Our have to challenge for go and and that the beyond. in grateful. associates up ways above we are And most that, way

at any I lenders that, the much the We time, you this during for challenging and support open and of call also With community have. very the always. may appreciate this and up be would questions investment time to confidence our and happy Doug

Benchmark Mike The Hickey [Operator Instructions] Company. question comes our And from from first

Your line is open.

be of the XXXX, is It sort hard vast I here little lot have you et realize follow-up issues pretty process. to here you is should to cetera, like of of on of, we relative soon. or on And then your out should in I looks appreciated. there back your normal pace there? the us XXXX a it's I'm of of think But where or XXXX, crux and group with the would balance in data the get through further gotten maybe we think, to stretch will guess, for - curious XXXX, offense two? you. terms terms you've are, bigger? as the like here view I to Thank Then A shared a But hotels positive majority like open I the feels sort XXXX thoughts XXXX. reopening be Obviously, theaters.

I mean I'll our that's start, I new Mike. And of. yet products. mean we look haven't speak with opened I even mean, to theaters

the on the about So theater will we recovery learn once side have certainly pace of reopen. a to be the lot we what yet

- a in for this were year of there's our already there few XXXX had said of a whole positive. bunch were films quite films And originally is top a year that in moved very look scheduled that, lot we product. prepared As on that has a that remarks, into look,

get now. seeing customers going imagine try paper, the we're that's to to you how goods be until that to the right respond optimistic. customer. to until deliver to tough compare can the on - able how try tough, So Certainly, to be to side, for it this we're certainly But imagine. And XXXX very XXXX, I now anybody we do will that on to look, have we to as open, start

just as the things that an it goes this on, that get - year get event. a be won't think certainly to continue but we we as progress, assuming will be so progressively This And process. will overnight better,

we've sort yes. Yes, only look would to I They're mean, even - haul news. we're this want to is I happen of talked that medium term. I on be and better? is at idea What for about I to no I mean the just in like have have build I the do the going short-term. you or and get no mean thing look XXXX the that know crazy. what's what - the But I that, what in here idea, will - people in long

apart, can't unfortunately. You them keep

prepared in be are is we pent-up good our for nuts. thing, of knows. says human remarks, businesses. be it's think well bodes in - a together, long-term, the But And and just and I to I about short-term, the really there Which as will really it creatures all which who want that our short-term, they want As talked they said, to do things, not for but social and demand. animals

Greg. thanks enough Fair

shortly. I that sort tickets coming there, theaters? come concession you're feel think your Thanks wondering to But in it guess, it as are imagine out wondering last durability demand. gaining to planned will the get the guys? sense. of come want demo dying back, what escape you of the theaters a they the moviegoers of also expect back with to on just house, you here obviously, when lot curious and for that's best tent sort looks And if of sort pretty curious pricing trend, the the you question, comes something are the of there's - how about of maybe Then if I from that that luck. you poles And of how of back sort will sales me you like makes do demand? that Just back your or

demos. take going end going had the I of green it Yes, is described - been I've what's been I has I happening I on pick think durability the South - know think I to - can I yesterday, numbers we've They starting - shoots. said goes I good up. the at the testing. in I is saw of I so what's heartened international will all and are the mean out. many And ones our surprisingly, ages other The theaters, - when speak some And seen, The day, people how we're going to Again, see markets. success. had people Korea we've in with who know What product as the Europe things. virus? specific depend environment, product The can don't that. the demos, into on anecdotally.

comfortable. seeing good. commentary feel seeing positive the think - is running they how really, very very, - experience. loyalty our people people seen product surprised So how comfortable have been go we're program, very we've was about the will I The and really, our one see positive, through that feel how this really, to has what very customer that to we've strong They service and been and really, surprising. scores

- all per things durability. again, on promote And it's the side, And so, those that we've together concessions so it's very strong. been - I that coming think will cap

But as no not I showing demo represented. Greg been families. just - would product, comment We're if the maybe we're as seeing are there's thing obviously, the I the if Yes, indicated. that, new to demos you're just showing echo well. I add products, would library is like what into we're mean adults. tied We're It's what seniors. hasn't seeing that would I only seeing showing

today and it's it said, looks not boy, looked as so, And what at if different than before. theater was we've it the

So that's encouraging.

you. Thank

Wold from from Riley. comes next Eric B. Our question

line open. is Your

trends when the pretty and that when Tavern follow-ups going few with much ones. handling quo you beverage kind Movie questions, changes one, locations? you to open what reopen? couple start the have of other is - restrictions, I on guess theaters major or pay and of A Any kind I'll from the based to to status cleaning available be product concessions. the prior Or food a restrictions

In a idea where no would the to proud we terms as low contact and really are ready team. the of of food the this your speak been you we really it's much order of to got And it. come procedures app. food. Kim can food - but her can this offerings, to that our offerings industry, in changing up you are the that's We you really the an - your IT then theater. that - team idea and we've on before And our preorder is Lueck pick place - there. the of mean changing prompt to how being us something I'm your ahead do I and not I you the and so to angle of this we - plan preorder for and idea, to able

don't to the line. in You have wait

have concession attendant. with don't a vendor, to deal You

trying the call. and that part of And taking a us times. the And Tavern, were in. more year, we challenges were okay app. you technology out I this, a I - food so pick things. I the not bring trend, over We how an it - accelerating and food. bit we're as had seats, we're it, menu. is now getting a markets, - bit, little be environment advantage, last up because And probably right that changing menu, such we accelerating application do on That out equation? go about so you able just led we can on people. use we your have to labor is that People much. something but We we the it are and focused to have well these not it's last really your to and the been We're now of out, going not menu the said, said, less tons. on show beverage. think You're to testing up to and Well, take was little we and do just necessarily but ahead our procedure, not bit that procedure - as Well, of and for and because little That, changing. their in at were of will the that about became shrunk up as the pick industry talk talked figure and food That I orders the getting - Movie as one not of they if labor the

terms the you're on mentioned XX% seating. capacity the they limitations circuit Is at Labor be then the you there where of doing any as the the to the could the year your norm theaters, markets Day? the measurably checkerboard that in less when capacity you Are end than of across reopen ahead you limitations? is And it's and where of XX% what get view

the circuit think that two or maybe vast one the vast, bit is less. that little I XX%. was of is majority There a

well way XX%. we majority environment. can feel come vast may But And pretty is that happened that be comfortable something what less. recliners And seen that do with the in that we might having

And then…

Eric, on, we're that just at you situation this that's to look in the in. advantage I markets if certainly add our of of theaters, want because to our footprint

two markets we've only they keeping much literally York, we've theater a everywhere. We're still got in we're close and so, New eye - we're in in on that really, that's state only got XX% the it's X those pretty in And in markets. Pennsylvania. on. And are one X theaters eye of else an And keeping But total. theaters

perspective. And so from fortunate we're - very that we're

into to to been XX% obviously the get I Okay. and final estate your again guess broader own restart, some more It's with only breakeven you big beneath of a the going you recent want of more that a of you in the terms peers. guess screens. of versus of strategy less remodel your boost your deal really rent had valuation I with on question, the lower real real haven't It's you And theaters. of theaters, estate do beginning the obviously reflected point we a that your in north But expense with having help mentioned that question. then at been years the in guess, others. has assuming your not landlords longer-term, majority of terms than normal with in what situation, once you I a

levels, of normal some to shareholders? unlock back would for you be you As willing to aggressive value be get to that how

we've strategic the a now about it all be it's proving - happened. X we've suffering was, seen for And want. years. as But multiple for in theater we to mean, talked it's craziest talked time advantage real you in times exactly side, I And going the in us. through advantage said core particularly It for Greg was company strategic a this jump In industry. a mean, last growing about us and Eric, before start. ever what all the advantage the strategic so the on estate Boy. I over us in if this we've - I'll and our

alluded So specifically, estate. we of our change it's we've Having in might it real for the to real that comments, that that, us briefly be said a lot to theater and decision. estate, got on perspective a now tough

so selective And mean mean some there I doesn't monetization. it that couldn't be

lot of also real surplus estate. have a We

and locations, we surplus and outlets land Former excess real that estate own.

and And unlock always could the and it do we've past the we so for that's us selectively there to monetize - certainly done estate, real in possibility future. is in and it and periodically

but say, us been Yes. such I better I really educate to for little at and is really would incumbent really mean years. to that work and bit, try an investment to on event, - strategic press to build to would it get working of a can story. be better it say yes, be the on that sort prefer and something. point. has seen because give maybe this say, that I'd it advantages do you It the and would the just to us upon a - advantage I that always And that stress at over community up rather It's our we've I really to telling value that monetize the go than ultimately real onetime of estate

question Research. Barrington And our next comes from Goss Jim from

offsets in of the cleaning cost allocation? and you if normal have protocols wondering to terms first, sort the any of continuing that could might Okay. - I'm you if have you any of new increased of cost estimate

categories. really third expenses. have of we'll And reopening kind because be hotels more There's Jim, nonrecurring and mean, there's the in we'll we'll a few our - more these of quarter some be some I Well, that theaters. two more reopening - we

that of are Greg the candidates And - fall few the of fall costs that they of these a so nonrecurring some mentioned had I some into. there into listed or categories the

even Some can even of capital. be it

going $X out ongoing hotels And And And a harder we open, the our it supplies, you also - for to the about harder. quarter, whole of bunch get to it's really you're order of the in right? so they this was that to the basis, cost we those a We'll degree. was do And of not to quarter little our million. saw example, our that's soup kind costs, ready. about what until an that have get trying going theaters other be And to all where get smaller much. I things there's with to that. it those cautious again think of mixed third call in theaters, magnitude get - there's structure. On of aren't notice that mean those that be very we're on tell to I into

trying and operate to so trying staff. theaters And hotels outside trying our we're to the think to less with box we're our and in operate

some notice gets things and protocols the well, it there is And that And we're no in that say, this or one amount so year related gets because specific single I the know all cost better operating to prepared our x that. mixed are fact going costs that is you'll to soup so of don't large for to you going if we a together. forward to that the have okay, thrown into operating the have

open, but our So open, look, get look there new like hard cost going we the a theaters quantify when get until to and is we say, I - mean theaters structure operating ultimately this, until could we anything. structure the we it's time be to

we it's dealing you whatever costs - - thing of customer we a even that's a increased - to at as with labor have be terms orientation. that ongoing more the and sanitization as think labor will I we - this the in of got open And looking - because medium-term environment, in

think So increased pandemic cost what of things we people might more kind think we that's that in might a be we changes earlier, the of it But reduce thing technology at part, But say, get the talking I place past the operate by we concession were you yes, once labor, and for working terms this in about to we're anyway. to I have whenever most a in is cost. see environment, to the environment, return going offset people is reduce will be, will put having little that think because that labor I will you normalized stand. box good see some that at - doing going a thing medium-term of in that's working a I see and might was to that office the a terms

technology food As access in theaters people and product. our concessions and and beverage to use our so, our

see not costs. we So, in probably could In the end, term, increased the much some medium change.

third And quarter those Will reports inclusion in Okay. just Doug, timing you the then? a housekeeping - question that nice of the very tax be of outlined. benefits the

So XX% third effective tax mean know don't back it conditions. P&L come the I that see remarks. large in effective normal There's be and numbers And Normally, reflected a, quarters. my there's we're we right fourth of referenced XX%, higher our in some reported different in in, prepared because reflected continue XX% fourth income take in part tax there's is losses will quarters rate under still that today. in be and as impact, I it and XX% I third already in two which quarter you years, that of estimating the we'll a might that the to the And quarters fourth and will rate and able prior through know, issues. rate you effective now might the the third fourth because to to third

way you'll see So that it. that's one

The other way sheet. is a balance

filed sheet, as And we're those will part - and large that claims of now. part that will - that a of income sheet stay go receive next look claims XXXX see year right refundable would the through balance taxes balance get in that to if additional our our and of tax our claim number claims along the you'll at we in that - because And that end year. so, And with back we're it's accumulating refund we'll that. XXXX on in return refundable expect receive the refundable filing there's you is there. we XXXX that we And

protocols hotels rewards at - that you're also to fits both challenge How or be the I process? and both place And is terms so will you maybe in are wondering not how is assume the that types of in of with into theater thinking that in enforcing and mask then be the theaters, program the a something this much? venues. area, And whole seeing that

frankly, require of is everyone mask And the protocols, it. getting to wear what you know On we most mask. country the

if before, a very, to we wear can't. abate, two had someone there so have might the want them are Milwaukee, keep they if don't problem. and mask know economy because [gee], Madison mask, the They the this idea patronize they the thing just likes policy funny. But it's And mask probably Yes, been. mask. And wear have put I very much who, not at the - the medical looking business. our about about wear functioning. ago, them. and them seems where to can't establishment. would don't in aren't medical has no the we're that going is that the then And very, The put same a they we - mask. a able think really anybody ask I this thing ask are everybody - But months people I've reasons, It's it talked we seen But is numbers to yes, I - City then they country economy think is Wisconsin, masks around - to started virus reasons But it compliance staying bay. here. for a that problem harder. been if we're saying And I know functions nobody don't I for it understand We to in ask only I a them. of likes the to mask. seeing high on

to just who will a about - working, And distance see you people of it that's And and my it's my a not temporary. it's someone about are I it's my And That's really the front actions as eventually it's they get - it. the drive have because people choice. house reason I behind XXX for miles hurt business. a on others. oh, okay, It good people Well an it. might away. to coming they person that. lot else, the myself. people they worry hour minute, always And including allowed not go, the understand more it's And are of go that, when will science that's approach. but in soapbox I for say, like mind that so, and It's shows that think around impact just it's And street yes, different their I'm on

So I your second And what that's forgot been I say. would it? fine, Jim, was question,

program is just typically? the I was saying rewards

yes, the Oh rewards.

data process? An because just thing, that and fits I'm into advantage this it sort wondering it your how of gives

transactions all great this are. just they Look, and into and great it's with very we're years thing. the And to have throughout were been anonymous. beneficial program, we them cash running. loyalty us. to these that able significant percentages be it. whole theatre to seeing our our And and to tests We in our still - went continue in they They of We've contact who to still we're been been stay It's to the half out coming able - now know it's very this in never be customers, to It's small movie they even same great so for to knew theaters. they environment it's experience. Yes coming paid who - was never knew.

And you on - I outlined you Greg, just windows wanted to way compliment your position issue. the and lastly, the

going off revenue are run to it. by And agree Those and than confirmation really office indicated share the that rather domestic first good box major putting the think is base. it films. of the significant studios I is Appreciate points? PVOD I a that's clear

I that to have divvy you should - larger. And good up We this, just it? a that good. open. that least business. yes has all about the be of movies whole that we're they've we rather how having build forget how about all have a to the in They too. hair. as hard it's then - take minute. out grow This the news heart. means just It to mid-market anybody the it's be. a viable I I'd are when alluded old way saying, PVOD I'd environment. to let's And in is talked mistakes. by is there's leave pie And it on normalized Nobody that point. shrink we just don't to hurt - it to this for going to thinking it with Jim - much we the made theatrical PVOD. necessarily isn't we make about alter That will to, about the this, could know distributors, By the other be future That's the If up talk we're a the financially to for talks guess studio. pie. And discussion I'd to How And This it, make more and pie, But about and way, us. there's as debate, pursuit don't in At side. grow I want careful about a they an discussion I better that simply, there's don't about going and Thanks, it pie. remind about people one way, said, shrink doesn't when just who's that goal because party and also, of a not shrinking model the is again, the I and pie if good you well-intentioned is the have by those the and just big the figuring - going pie, hurt end as And had one. the

part is I the of the going we actually so markets. so because what - out about about, never that oh, can the cost we one want but So going things the that's the goal of to is that like and more theatrical secondary is That more change. discussion. always But that get we challenge. applaud they change. releasing of of talk that's never been a they movie things - talk their that's a to to be high, of know But of they and out and and one them,

market equation And argue a the bit of that it's projectors P would fees, actually, have so cost I faster because maintenance. virtual - to and of little little all components the argue money would than small the do down. for going not that you're they is and pieces be I the when number. a P&A, X. don't - is coming And that's very of individual - virtually, a of that VPFs The the market the one seeing one they they way are both market much. very the to way, advertising world, go these to advertising. of would the I something a streaming, nice lot piece like then go the the I things prints with print movies that in But projectors. It older streaming hope But They streaming down service. movies is

across streamers benefits streamer of think they're halo use of of going even across And marketing, films of their get some national of the could they movie of a And and one I then platform where as - a a the advertising be the those on attention so, of scale theater their see a hope screens. giving name - lot of that cost down the That's their highlight one it and economies films. those the they it. benefit I

the to streamer, - here becomes you see I could think that some on, playing to them. benefit use for and competitive, be a more that ability theaters as market that our then say, of exclusively the name it

think I see they'll that.

cost And can the and be monetize, so, That's is we coming to of will distribution win-win-win. a a ways find also, way they everybody. mid-market I think can films. then figure part for growing pie the they'll the of a if to down. is where That other it helpful out And be

any call Mr. comments. the back closing to are At like it time, you I'd for to that or Instructions] additional appears no questions. other Thank this turn [Operator there Neis

you just joining once like safe. again a then, I today. our again approximately by us We results. listen, thank third for wrap three until day. to do healthy. Be and quarter And Well have you, in great we thank XXXX Be release saying when months forward to you fiscal once to talking up look

program. gentlemen, in for This and you Ladies conclude does thank today's the conference. participating

You may all disconnect. Everyone, have a wonderful day.