INVESTING for GROWTH The Marcus Corporation Gabelli & Company Inaugural Movie Conference March 12, 2009
Forward-Looking Statement Certain matters discussed in this presentation are forward-looking statements intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements may generally be identified as such because the context of such statements include words such as we believe, anticipate, expect or words of similar import. Similarly, statements that describe our future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties which may cause results to differ materially from those expected, including, but not limited to, the following: (1) the availability, in terms of both quantity and audience appeal, of motion pictures for our theatre division, as well as other industry dynamics such as the maintenance of a suitable window between the date such motion pictures are released in theatres and the date they are released to other distribution channels; (2) the effects of increasing depreciation expenses, reduced operating profits during major property renovations, and preopening and start-up costs due to the capital intensive nature of our businesses; (3) the effects of adverse economic conditions in our markets, particularly with respect to our hotels and resorts division; (4) the effects of adverse weather conditions, particularly during the winter in the Midwest and in our other markets; (5) the effects on our occupancy and room rates from the relative industry supply of available rooms at comparable lodging facilities in our markets; (6) the effects of competitive conditions in our markets; (7) our ability to identify properties to acquire, develop and/or manage and continuing availability of funds for such development; and (8) the adverse impact on business and consumer spending on travel, leisure and entertainment resulting from terrorist attacks in the United States, the United States responses thereto and subsequent hostilities. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are made only as of the date of this presentation and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances. 2
Why Invest in The Marcus Corporation? 3
The Marcus Corporation 4
Two Divisions 5
Results by Division (1) Revenues Operating Income (2) 51.7% 47.9% 66.8% 33.2%.4% Marcus Theatres Marcus Hotels and Resorts Corporate Items Marcus Theatres Marcus Hotels and Resorts (1) Trailing 12 months through November 27, 2008 (2) Excludes corporate items 6
Business Overview Real-estate intensive operating businesses Strong, well-respected operators Conservative capitalization Diversity adds overall stability 7
Significant Assets Own underlying real estate for 7 of 8 company-owned hotels and 85% of movie screens 8
Significant Assets Strategic advantage, particularly for the movie business Purchase land and hold it, sometimes for many years Opportunities for gains on sale of properties Flexibility to add screens, upgrade theatres and introduce new features 9
Stadium Seating Significant competitive advantage in our markets 10
11
Our Portfolio Eight company-owned and operated properties Manage 12 properties Three managed properties under development 5,200 rooms in 10 states 12
Our Portfolio Pfister Hotel, Milwaukee, Wis. Hilton Madison at Monona Terrace, Madison, Wis. 13
Our Portfolio Grand Geneva Resort & Spa, Lake Geneva, Wis. Hilton Milwaukee City Center, Wis. WELL Spa, The Pfister, Milwaukee, Wis. 14
Leading Hotel Brands 15
Growth Strategies Grow primarily through management contracts May make equity investments in managed properties Willing to pursue full ownership when a project has good long-term potential 16
Management Contracts Enable us to take on more projects Grow at a faster pace Maintain a strong financial position Westin Columbus, Columbus, Ohio Xona Resort Suites, Scottsdale, AZ Platinum Hotel & Spa, Las Vegas 17
Competitive Advantages Successful branded concepts Expertise in renovating and repositioning properties Established operations infrastructure 18
Enhancing Our Assets Continually renovating and updating our properties The Pfister, Milwaukee, Wis. Skirvin Hilton, Oklahoma City, Okla. InterContinental Milwaukee, Wis. 19
Enhancing Our Assets Two renovation projects totaling $30 million Grand Geneva Resort & Spa Hilton Milwaukee City Center 20
21
Who We Are Campus Theatre, Ripon, Wis. 1935 22
Who We Are Seventh largest circuit in the U.S. with 675 screens at 55 locations 12.1 screens per location Increased screen count nearly 35% over the past two years 23
New Screens Acquired 11 theatre locations with 122 screens from CEC in April 2007 Acquired 7 theatre locations with 83 screens from Douglas Theatres in April 2008 Continue to pursue additional acquisitions if the opportunities arise 24
Leader in Our Markets 100% market share in over 80% of the communities we serve Overall box office market share approaches 80% 25
Leader in in Our Industry Highest % Stadium Seating Highest % Stadium Seating 100 96% 100 80 96% 81% 78% 75% % 90 % 80 60 40 81% 78% 75% 70 20 60 0 Source: Most recent 10-K filing 26
Leader in Our Industry Concession revenues as a percent of box office receipts were 49.6% for fiscal 2008 best in industry Industry-leading EBITDA margins of nearly 28% 27
Concession Revenues/ Person % Change 7 6 Percent Change 5 4.6% CAGR 4 3 3.0% CPI 2 1 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008* *Excludes recently acquired theatres Fiscal Year 28
Signature UltraScreens 13 th UltraScreen currently under construction 29
Signature UltraScreens Higher per-screen revenues Reserved seating in our newest UltraScreens 30
New Revenue Sources Food and beverage concepts 31
The Marcus Majestic Cinema 32
Majestic Cinema 33
Majestic Cinema CineDine auditorium 34
New Revenue Sources Introducing stand-alone restaurants at two theatre locations Zaffiro s Pizzeria Ristorante, North Shore Cinema, Mequon, Wis. 35
New Revenue Sources Pre-show and lobby advertising, sponsorships, business meetings and film booking services 36
New Revenue Sources Purchased a portion of a film buying and booking company Booking films for a total of 858 theatre screens 675 screens owned or operated by Marcus Theatres 183 screens operated by other owners 37
New Audiences Digital 3D and alternate programming Expanding digital 3D technology to 27 theatres 38
New Audiences Digital 3D in over 50% of our firstrun theatre locations Approximately 90% of the communities we serve within a 30- minute drive from a Marcus digital 3D location 39
New Audiences Up to 12-14 3D releases per year Promising 3D films include: Ice Age: Dawn of the Dinosaurs A Christmas Carol Avatar 40
New Audiences Digital network at 23 locations 41
Big D Broader rollout of digital cinema Testing various systems while the industry works to develop a viable financial model Continue to explore options 42
Summary A growing circuit: Market leader Industry leader Strong performer 43
Marcus Theatres Good movies Latest technology and amenities Blockbuster Combination! 44
First Half Fiscal 2009 Results 45
Revenues First Half (in millions) $240 $200 $195.6 $208.3 +6.5% $160 $120 $80 $40 $0 2008 2009 Fiscal Years 46
Operating Income First Half (in millions) $40 $30 $32.2 $32.3 +2% +0.4% $20 $10 $0 2008 2009 Fiscal Years 47
Earnings Per Share First Half $0.60 $0.48 $0.45 $0.40 +11% $0.20 $0.00 2008 2009 Fiscal Years 48
Capital Expenditures (in millions) $200 $186.8 $160 $120 $80 $50.9 $63.4 $75.5 $64.9 $40 $0 2004 2005 2006 2007 2008 Fiscal Years 49
Debt to Total Capitalization 50% 45% 47% 45% 40% 37% 37% 30% 28% 20% 10% 0% 2004 2005 2006 2007 2008 Q2 2009 Fiscal Years 50
Credit Facilities Completed private placement of $60 million of senior notes Extended existing credit facility for another five years and increased capacity to $175 million $114 million of unused credit lines available at the end of November 51
Dividends Per Share $8.00 $7.26 $6.00 $4.00 $2.00 $0.00 $0.22 $0.22 $0.32 $0.34 2004 2005 2006 2007 2008 Fiscal Years 52
Dividends Paid $7.00 per share special cash dividend in February 2006 Returned a portion of the proceeds from the sale of the limited-service lodging division 53
Marcus Theatres - Outlook Theatre business has historically performed well during challenging economic times Potentially strong films in the pipeline Cautiously optimistic 54
Marcus Hotels and Resorts - Outlook Near-term outlook has worsened Visibility into the future is limited Great deal of uncertainty in the lodging environment 55
Marcus Hotels and Resorts - Outlook Group business impacts some properties more than others Our markets tend to be less volatile than major destination markets Closely watching operating costs and adjusting as needed 56
Defining Strengths Manage for the long term Significant real estate assets Maintain and enhance existing assets Strong balance sheet Continually adapt to change Focus on quality and value Experienced management team 57
Why Invest in The Marcus Corporation? Strong Business Models +Significant Assets +Defined Growth Strategies +Strong Balance Sheet = Investing for Growth 58