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General (Policies) | 6 Months Ended
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Jun. 30, 2022
Accounting Policies [Abstract] |
Basis of Presentation | 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.
Noncontrolling Interests | 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 - 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 | 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 | 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 | 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 | 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.
Fair Value Measurements | 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 30, 2022 and December 30, 2021, respectively, the Company’s $44,990 and $5,000 of investments in money market accounts were valued using Level 1 pricing inputs and were included in cash and cash equivalents. Level 2 - Assets or liabilities for which fair value is based on pricing inputs that were either directly or indirectly observable as of the reporting date. At June 30, 2022 and December 30, 2021, respectively, the Company’s $34 asset and $689 liability related to the Company’s interest rate swap contract was valued using Level 2 pricing inputs. Level 3 - Assets or liabilities for which fair value is based on valuation models with significant unobservable pricing inputs and which result in the use of management estimates. At June 30, 2022 and December 30, 2021, none of the Company’s recorded assets or liabilities that are measured on a recurring basis at fair market value were valued using Level 3 pricing inputs. Assets and liabilities that were measured on a non-recurring basis are discussed in Note 3.
Defined Benefit Plan | Defined Benefit Plan - The components of the net periodic pension cost of the Company’s unfunded nonqualified, defined-benefit plan are as follows:
| 13 Weeks Ended |  | 26 Weeks Ended
| June 30, 2022 |  | July 1, 2021 |  | June 30, 2022 |  | July 1, 2021
Service cost | $ | 264 |  |  | $ | 280 |  |  | $ | 528 |  |  | $ | 561 |
Interest cost | 335 |  |  | 301 |  |  | 670 |  |  | 601 |
Net amortization of prior service cost and actuarial loss | 257 |  |  | 327 |  |  | 514 |  |  | 655 |
Net periodic pension cost | $ | 856 |  |  | $ | 908 |  |  | $ | 1,712 |  |  | $ | 1,817 |
Service cost is included in Administrative expense while all other components are recorded within Other expense outside of operating income in the consolidated statements of earnings.
Revenue Recognition | Revenue Recognition – The disaggregation of revenues by business segment for the 13 and 26 weeks ended June 30, 2022 is as follows:
| 13 Weeks Ended June 30, 2022
| Theatres |  | Hotels/Resorts |  | Corporate |  | Total
Theatre admissions | $ | 63,087 |  |  | $ | — |  |  | $ | — |  |  | $ | 63,087 |
Rooms | — |  |  | 28,865 |  |  | — |  |  | 28,865 |
Theatre concessions | 58,147 |  |  | — |  |  | — |  |  | 58,147 |
Food and beverage | — |  |  | 19,014 |  |  | — |  |  | 19,014 |
Other revenues(1) | 8,203 |  |  | 12,872 |  |  | 117 |  |  | 21,192 |
Cost reimbursements | — |  |  | 8,250 |  |  | — |  |  | 8,250 |
Total revenues | $ | 129,437 |  |  | $ | 69,001 |  |  | $ | 117 |  |  | $ | 198,555 |
| 26 Weeks Ended June 30, 2022
| Theatres |  | Hotels/Resorts |  | Corporate |  | Total
Theatre admissions | $ | 101,504 |  |  | $ | — |  |  | $ | — |  |  | $ | 101,504 |
Rooms | — |  |  | 46,295 |  |  | — |  |  | 46,295 |
Theatre concessions | 93,611 |  |  | — |  |  | — |  |  | 93,611 |
Food and beverage | — |  |  | 33,525 |  |  | — |  |  | 33,525 |
Other revenues(1) | 13,813 |  |  | 25,975 |  |  | 211 |  |  | 39,999 |
Cost reimbursements | — |  |  | 15,863 |  |  | — |  |  | 15,863 |
Total revenues | $ | 208,928 |  |  | $ | 121,658 |  |  | $ | 211 |  |  | $ | 330,797 |
(1)Included in other revenues is an immaterial amount related to rental income that is not considered revenue from contracts with customers. The disaggregation of revenues by business segment for the 13 and 26 weeks ended July 1, 2021 is as follows:
| 13 Weeks Ended July 1, 2021
| Theatres |  | Hotels/Resorts |  | Corporate |  | Total
Theatre admissions | $ | 24,915 |  |  | $ | — |  |  | $ | — |  |  | $ | 24,915 |
Rooms | — |  |  | 17,332 |  |  | — |  |  | 17,332 |
Theatre concessions | 23,061 |  |  | — |  |  | — |  |  | 23,061 |
Food and beverage | — |  |  | 9,591 |  |  | — |  |  | 9,591 |
Other revenues(1) | 4,281 |  |  | 9,855 |  |  | 95 |  |  | 14,231 |
Cost reimbursements | 44 |  |  | 3,373 |  |  | — |  |  | 3,417 |
Total revenues | $ | 52,301 |  |  | $ | 40,151 |  |  | $ | 95 |  |  | $ | 92,547 |
| 26 Weeks Ended July 1, 2021
| Theatres |  | Hotels/Resorts |  | Corporate |  | Total
Theatre admissions | $ | 35,600 |  |  | $ | — |  |  | $ | — |  |  | $ | 35,600 |
Rooms | — |  |  | 26,376 |  |  | — |  |  | 26,376 |
Theatre concessions | 32,980 |  |  | — |  |  | — |  |  | 32,980 |
Food and beverage | — |  |  | 15,503 |  |  | — |  |  | 15,503 |
Other revenues(1) | 6,196 |  |  | 19,734 |  |  | 195 |  |  | 26,125 |
Cost reimbursements | 87 |  |  | 6,663 |  |  | — |  |  | 6,750 |
Total revenues | $ | 74,863 |  |  | $ | 68,276 |  |  | $ | 195 |  |  | $ | 143,334 |
(1)Included in other revenues is an immaterial amount related to rental income that is not considered revenue from contracts with customers. The Company had deferred revenue from contracts with customers of $39,355 and $39,144 as of June 30, 2022 and December 30, 2021, respectively. The Company had no contract assets as of June 30, 2022 and December 30, 2021. During the 26 weeks ended June 30, 2022, the Company recognized revenue of $9,448 that was included in deferred revenues as of December 30, 2021. During the 26 weeks ended July 1, 2021, the Company recognized revenue of $4,115 that was included in deferred revenues as of December 31, 2020. The majority of the Company’s deferred revenue relates to non-redeemed gift cards, advanced ticket sales and the Company’s loyalty program. As of June 30, 2022, the amount of transaction price allocated to the remaining performance obligations under the Company’s advanced ticket sales was $3,228 and is reflected in the Company’s consolidated balance sheet as part of deferred revenues, which is included in other accrued liabilities. The Company recognizes revenue as the tickets are redeemed, which is expected to occur within the next two years. As of June 30, 2022, the amount of transaction price allocated to the remaining performance obligations related to the amount of Hotels and Resorts non-redeemed gift cards was $3,559 and is reflected in the Company’s consolidated balance sheet as part of deferred revenues. The Company recognizes revenue as the gift cards are redeemed, which is expected to occur within the next two years. The majority of the Company’s revenue is recognized in less than one year from the original contract.
New Accounting Pronouncements | New Accounting Pronouncements – During the first quarter of fiscal 2022, the Company adopted Accounting Standards Update (ASU) No. 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance. The amendments in this update provide increased transparency of government assistance including the requirement of certain disclosures in a company’s notes to the consolidated financial statements about transactions with a government. The adoption of the new standard did not have a material effect on the Company’s consolidated financial statements. In March 2020, the Financial Accounting Standards Board issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in this update provide optional expedients and exceptions to the existing guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from the London Interbank Offered Rate (LIBOR), or other interbank offered rates, to alternative reference rates such as the Secured Overnight Financing Rate (SOFR). ASU No. 2020-14 is optional, effective immediately, and may be elected over time as reference rate reform activities occur, generally through December 31, 2022. The Company will evaluate the effect the new standard will have on its consolidated financial statements when a replacement rate is chosen.

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