UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March 26, 2020~~April 1, 2021


☐	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.


Yes	⌧☒		No	◻☐

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).


Yes	⌧☒		No	◻☐

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	⌧☐	Accelerated filer	☐☒
Non-accelerated filer	◻☐	Smaller reporting company	☐
		Emerging growth company	☐

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. ◻☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


Yes	☐		No	☒

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 ~~MAY 1, 2020~~APRIL 28, 2021 – ~~23,131,830~~24,085,259

CLASS B COMMON STOCK OUTSTANDING AT ~~MAY 1, 2020~~APRIL 28, 2021 – ~~7,925,254~~

7,305,639

~~EXPLANATORY NOTE~~

As previously disclosed in the Current Report on Form 8-K filed by The Marcus Corporation (the “Company”) with the Securities and Exchange Commission (the “SEC”) on May 5, 2020, the filing of the Company’s Quarterly Report on Form 10-Q for the period ended March 26, 2020 (the “Form 10-Q”), was delayed due to circumstances related to novel coronavirus outbreak (the “COVID-19 pandemic”). Due to the COVID-19 pandemic and measures taken to limit the spread of the COVID-19 pandemic, the Company’s operations and business have experienced significant disruptions. The Company has been following the recommendations of local government and health authorities to minimize exposure risk for its employees, including the temporary closure of its corporate headquarters, and having employees work remotely, which slowed the Company’s routine quarterly financial statement close process. At the same time, the COVID-19 pandemic has resulted in unprecedented operational challenges for the exhibition industry and the hospitality industry generally and the Company in particular. These operational challenges have increased the required disclosures for the Form 10-Q, which in turn increased the difficulty of the Company’s implementation of inline eXtensible Business Reporting Language requirements. The Company was therefore unable to file the Form 10-Q on its customary schedule. The Company relied on the SEC’s Order Under Section 36 of the Securities Exchange Act of 1934 Modifying Exemptions from the Reporting and Proxy Delivery Requirements for Public Companies, SEC Release No. 34-88465, dated March 25, 2020, to delay the filing of this Form 10-Q.

THE MARCUS CORPORATION

INDEX


		Page
PART I – FINANCIAL INFORMATION

Item 1.	Consolidated Financial Statements:

	Consolidated Balance Sheets (~~March 26, 2020~~April 1, 2021 and December ~~26, 2019)~~31, 2020)	43

	Consolidated Statements of Earnings (Loss) (13 weeks ended April 1, 2021 and March 26, ~~2020~~2020)	5

	Consolidated Statements of Comprehensive Income (Loss) (13 weeks ended April 1, 2021 and March ~~28, 2019)~~26, 2020)	6

	Consolidated Statements of ~~Comprehensive Income (Loss)~~Cash Flows (13 weeks ended April 1, 2021 and March 26, ~~2020 and March 28, 2019)~~2020)	7

	Consolidated Statements of Cash Flows (13 weeks ended March 26, 2020 and March 28, 2019)	8

	Condensed Notes to Consolidated Financial Statements	98

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2219

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3829

Item 4.	Controls and Procedures	3829

PART II – OTHER INFORMATION

Item 1A.	Risk Factors	3930

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4130

Item 4.	Mine Safety Disclosures	4130

Item 6.	Exhibits	4231

	Signatures	1S-1

PART I – FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

THE MARCUS CORPORATION

Consolidated Balance Sheets

March 26,

December 26,
(in thousands, except share and per share data)

2020

2019

ASSETS




Current assets:




Cash and cash equivalents

$
126,472

$
20,862
Restricted cash

4,795

4,756
Accounts receivable, net of reserves of $998 and $762, respectively

14,765

29,465
Refundable income taxes

10,438

5,916
Other current assets

16,857

18,265
Total current assets

173,327

79,264




Property and equipment:




Land and improvements

152,692

152,434
Buildings and improvements

761,991

761,511
Leasehold improvements

164,873

164,083
Furniture, fixtures and equipment

379,759

377,404
Finance lease right-of-use assets

74,382

74,357
Construction in progress

8,061

4,043
Total property and equipment

1,541,758

1,533,832
Less accumulated depreciation and amortization

629,490

610,578
Net property and equipment

912,268

923,254




Operating lease right-of-use assets

244,468

243,855




Other assets:




Investments in joint ventures

3,538

3,595
Goodwill

75,258

75,282
Other

32,527

33,936
Total other assets

111,323

112,813




TOTAL ASSETS

$
1,441,386

$
1,359,186


	April 1,		December 31,
(in thousands, except share and per share data)	2021		2020

ASSETS
Current assets:
Cash and cash equivalents	$	6,013	$	6,745
Restricted cash		6,890		7,343
Accounts receivable, net of reserves of $1,196 and $1,284, respectively		6,572		6,359
Government grants receivable		—		4,913
Refundable income taxes		24,867		27,934
Assets held for sale		8,658		4,117
Other current assets		10,654		10,406
Total current assets		63,654		67,817

Property and equipment:
Land and improvements		140,302		145,671
Buildings and improvements		759,852		759,421
Leasehold improvements		164,000		163,879
Furniture, fixtures and equipment		374,734		374,253
Finance lease right-of-use assets		75,338		75,322
Construction in progress		5,460		3,360
Total property and equipment		1,519,686		1,521,906
Less accumulated depreciation and amortization		691,446		673,578
Net property and equipment		828,240		848,328

Operating lease right-of-use assets		227,899		229,660

Other assets:
Investments in joint ventures		—		2,084
Goodwill		75,165		75,188
Other		30,871		31,101
Total other assets		106,036		108,373
TOTAL ASSETS	$	1,225,829	$	1,254,178

See accompanying condensed notes to consolidated financial statements.

THE MARCUS CORPORATION

Consolidated Balance Sheets

March 26,

December 26,
(in thousands, except share and per share data)

2020

2019

LIABILITIES AND SHAREHOLDERS' EQUITY




Current liabilities:




Accounts payable

$
27,178

$
49,370
Taxes other than income taxes

15,844

20,613
Accrued compensation

17,098

18,055
Other accrued liabilities

50,507

61,134
Current portion of finance lease obligations

2,438

2,571
Current portion of operating lease obligations

15,386

13,335
Current maturities of long-term debt

9,977

9,910
Total current liabilities

138,428

174,988




Finance lease obligations

20,302

20,802




Operating lease obligations

238,010

232,111




Long-term debt

345,206

206,432



Deferred income taxes

45,771

48,262




Deferred compensation and other

55,281

55,133




Equity:




Shareholders’ equity attributable to The Marcus Corporation

Preferred Stock, $1 par; authorized 1,000,000 shares; NaN issued

─

─
Common Stock, $1 par; authorized 50,000,000 shares; issued 23,264,259 shares at March 26, 2020 and 23,253,744 shares at December 26, 2019

23,264

23,254
Class B Common Stock, $1 par; authorized 33,000,000 shares; issued and outstanding 7,925,254 shares at March 26, 2020 and 7,935,769 shares at December 26, 2019

7,926

7,936
Capital in excess of par

146,694

145,549
Retained earnings

437,387

461,884
Accumulated other comprehensive loss

(13,195)

(12,648)

602,076

625,975
Less cost of Common Stock in treasury (133,363 shares at March 26, 2020 and 242,853 shares at December 26, 2019)

(3,563)

(4,540)
Total shareholders' equity attributable to The Marcus Corporation

598,513

621,435
Noncontrolling interest

(125)

23
Total equity

598,388

621,458




TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$
1,441,386

$
1,359,186


	April 1,		December 31,
(in thousands, except share and per share data)	2021		2020

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	13,277	$	13,158
Taxes other than income taxes		16,765		18,308
Accrued compensation		7,916		7,633
Other accrued liabilities		56,344		58,154
Short-term borrowings		83,259		87,194
Current portion of finance lease obligations		2,731		2,783
Current portion of operating lease obligations		18,914		19,614
Current maturities of long-term debt		11,361		10,548
Total current liabilities		210,567		217,392

Finance lease obligations		19,166		19,744

Operating lease obligations		228,493		230,550

Long-term debt		227,770		193,036

Deferred income taxes		20,131		33,429

Other long-term obligations		61,847		61,304

Equity:
Shareholders’ equity attributable to The Marcus Corporation
Preferred Stock, $1 par; authorized 1,000,000 shares; NaN issued		—		—
Common Stock, $1 par; authorized 50,000,000 shares; issued 24,048,531 shares at April 1, 2021 and 23,264,259 shares at December 31, 2020		24,049		23,264
Class B Common Stock, $1 par; authorized 33,000,000 shares; issued and outstanding 7,405,639 shares at April 1, 2021 and 7,925,254 shares at December 31, 2020		7,406		7,926
Capital in excess of par		138,446		153,529
Retained earnings		304,468		331,897
Accumulated other comprehensive loss		(14,481)		(14,933)
		459,888		501,683
Less cost of Common Stock in treasury (63,087 shares at April 1, 2021 and 124,758 shares at December 31, 2020)		(2,033)		(2,960)
Total shareholders’ equity attributable to The Marcus Corporation		457,855		498,723
Noncontrolling interest		—		—
Total equity		457,855		498,723

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,225,829	$	1,254,178

See accompanying condensed notes to consolidated financial statements.

THE MARCUS CORPORATION

Consolidated Statements of Earnings (Loss)

13 Weeks Ended
(in thousands, except per share data)

March 26, 2020

March 28, 2019

Revenues:


Theatre admissions

$
55,395

$
58,969
Rooms

16,989

18,938
Theatre concessions

45,930

47,155
Food and beverage

13,614

15,783
Other revenues

18,776

20,829

150,704

161,674
Cost reimbursements

8,756

8,365
Total revenues

159,460

170,039




Costs and expenses:




Theatre operations

54,016

56,378
Rooms

9,655

9,035
Theatre concessions

22,211

17,269
Food and beverage

14,465

13,609
Advertising and marketing

5,390

4,910
Administrative

17,732

17,859
Depreciation and amortization

19,033

15,985
Rent

6,954

5,403
Property taxes

6,029

5,393
Other operating expenses

8,707

10,883
Impairment charges

8,712

—
Reimbursed costs

8,756

8,365
Total costs and expenses

181,660

165,089




Operating income (loss)

(22,200)

4,950




Other income (expense):




Investment income (loss)

(695)

473
Interest expense

(2,516)

(3,059)
Other expense

(590)

(480)
Gain (loss) on disposition of property, equipment and other assets

(12)

7
Equity losses from unconsolidated joint ventures, net

(57)

(84)

(3,870)

(3,143)



Earnings (loss) before income taxes

(26,070)

1,807
Income taxes

(6,570)

13
Net earnings (loss)

(19,500)

1,794
Net loss attributable to noncontrolling interests

(148)

(66)
Net earnings (loss) attributable to The Marcus Corporation

$
(19,352)

$
1,860




Net earnings (loss) per share - basic:




Common Stock

$
(0.64)

$
0.06
Class B Common Stock

$
(0.58)

$
0.06




Net earnings (loss) per share - diluted:




Common Stock

$
(0.64)

$
0.06
Class B Common Stock

$
(0.58)

$
0.06


	13 Weeks Ended
	April 1,			March 26,
(in thousands, except per share data)	2021			2020

Revenues:
Theatre admissions	$	10,685		$	55,395
Rooms		9,044			16,989
Theatre concessions		9,919			45,930
Food and beverage		5,912			13,614
Other revenues		11,894			18,776
		47,454			150,704
Cost reimbursements		3,333			8,756
Total revenues		50,787			159,460

Costs and expenses:
Theatre operations		18,270			54,016
Rooms		5,265			9,655
Theatre concessions		4,496			22,211
Food and beverage		5,370			14,465
Advertising and marketing		2,549			5,390
Administrative		13,316			17,732
Depreciation and amortization		17,979			19,033
Rent		6,341			6,954
Property taxes		4,739			6,029
Other operating expenses		4,790			8,707
Impairment charges		—			8,712
Reimbursed costs		3,333			8,756
Total costs and expenses		86,448			181,660

Operating loss		(35,661)			(22,200)

Other income (expense):
Investment income (loss)		40			(695)
Interest expense		(4,843)			(2,516)
Other expense		(628)			(590)
Gain (loss) on disposition of property, equipment and other assets		2,204			(12)
Equity losses from unconsolidated joint ventures, net		—			(57)
		(3,227)			(3,870)

Net loss before income taxes		(38,888)			(26,070)
Income tax benefit		(10,758)			(6,570)
Net loss		(28,130)			(19,500)
Net loss attributable to noncontrolling interests		—			(148)
Net loss attributable to The Marcus Corporation	$	(28,130)		$	(19,352)

Net loss per share - basic:
Common Stock	$	(0.93)		$	(0.64)
Class B Common Stock	$	(0.80)		$	(0.58)

Net loss per share - diluted:			��
Common Stock	$	(0.93)		$	(0.64)
Class B Common Stock	$	(0.80)		$	(0.58)

See accompanying condensed notes to consolidated financial statements.

THE MARCUS CORPORATION

Consolidated Statements of Comprehensive Income (Loss)

13 Weeks Ended
(in thousands)

March 26, 2020

March 28, 2019

Net earnings (loss)

$
(19,500)

$
1,794




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 $65 and $30, respectively

183

79




Fair market value adjustment of interest rate swaps, net of tax benefit of $288 and $142, respectively

(814)

(386)




Reclassification adjustment on interest rate swaps included in interest expense, net of tax effect of $31 and $4, respectively

84

10




Other comprehensive loss

(547)

(297)




Comprehensive income (loss)

(20,047)

1,497



Comprehensive loss attributable to noncontrolling interests

(148)

(66)



Comprehensive income (loss) attributable to The Marcus Corporation

$
(19,899)

$
1,563


	13 Weeks Ended
	April 1,		March 26,
(in thousands)	2020		2020

Net loss	$	(28,130)	$	(19,500)

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 $86 and $65, respectively		242		183

Fair market value adjustment of interest rate swaps, net of tax effect (benefit) of $6 and $(288), respectively		17		(814)

Reclassification adjustment on interest rate swaps included in interest expense, net of tax effect of $68 and $31, respectively		193		84

Other comprehensive income (loss)		452		(547)

Comprehensive loss		(27,678)		(20,047)

Comprehensive loss attributable to noncontrolling interests		—		(148)

Comprehensive loss attributable to The Marcus Corporation	$	(27,678)	$	(19,899)

See accompanying condensed notes to consolidated financial statements.

THE MARCUS CORPORATION

Consolidated Statements of Cash Flows


	13 Weeks Ended				13 Weeks Ended
(in thousands)	March 26, 2020		March 28, 2019		April 1, 2021		March 26, 2020

OPERATING ACTIVITIES:
Net earnings (loss)	$	(19,500)	$	1,794
Adjustments to reconcile net earnings to net cash provided by operating activities:
Net loss					$	(28,130)	$	(19,500)
Adjustments to reconcile net loss to net cash used in operating activities:
Losses on investments in joint ventures		57		84		—		57
Distributions from joint ventures		—		200
(Gain) loss on disposition of property, equipment and other assets		12		(7)		(2,204)		12
Impairment charges		8,712		—		—		8,712
Depreciation and amortization		19,033		15,985		17,979		19,033
Amortization of debt issuance costs		49		71		623		49
Share-based compensation		988		777		1,484		988
Deferred income taxes		(2,275)		(1)		(10,794)		(2,275)
Deferred compensation and other		(348)		(16)
Other long-term liabilities						1,164		(348)
Contribution of the Company’s stock to savings and profit-sharing plan		1,315		1,181		1,012		1,315
Changes in operating assets and liabilities:
Accounts receivable		14,700		5,355		(213)		14,700
Government grant receivable						4,913		—
Other assets		1,408		(970)		23		1,408
Operating leases		2,342		(281)		(996)		2,342
Accounts payable		(22,047)		(3,354)		(800)		(22,047)
Income taxes		(4,522)		101		6,010		(4,522)
Taxes other than income taxes		(4,769)		(1,703)		(1,543)		(4,769)
Accrued compensation		(957)		(2,816)		283		(957)
Other accrued liabilities		(10,816)		(8,380)		(1,794)		(10,816)
Total adjustments		2,882		6,226		15,147		2,882
Net cash provided by (used in) operating activities		(16,618)		8,020
Net cash used in operating activities						(12,983)		(16,618)

INVESTING ACTIVITIES:
Capital expenditures		(9,978)		(13,724)		(1,525)		(9,978)
Purchase of theatres, net of cash acquired and working capital assumed		—		(29,626)
Proceeds from disposals of property, equipment and other assets		3		9		4,308		3
Other investing activities		(206)		(2,745)		(231)		(206)
Net cash used in investing activities		(10,181)		(46,086)
Net cash provided by (used in) investing activities						2,552		(10,181)

FINANCING ACTIVITIES:
Debt transactions:
Proceeds from borrowings on revolving credit facility		188,000		73,000		36,000		188,000
Repayment of borrowings on revolving credit facility		(49,000)		(38,000)		(22,000)		(49,000)
Repayment on short-term borrowings						(4,150)		—
Principal payments on long-term debt		(177)		(217)		(93)		(177)
Debt issuance costs		(414)		—		(4)		(414)
Principal payments on finance lease obligations		(635)		(587)		(630)		(635)
Equity transactions:
Treasury stock transactions, except for stock options		(226)		(381)		(1,169)		(226)
Exercise of stock options		45		454		1,292		45
Dividends paid		(5,145)		(4,816)		—		(5,145)
Distributions to noncontrolling interest		—		(60)
Net cash provided by financing activities		132,448		29,393		9,246		132,448

Net increase (decrease) in cash, cash equivalents and restricted cash		105,649		(8,673)		(1,185)		105,649
Cash, cash equivalents and restricted cash at beginning of period		25,618		21,927		14,088		25,618
Cash, cash equivalents and restricted cash at end of period	$	131,267	$	13,254	$	12,903	$	131,267

Supplemental Information:
Interest paid, net of amounts capitalized	$	2,970	$	3,754	$	5,952	$	2,970
Income taxes (paid) refunded		(226)		88		5,974		(226)
Change in accounts payable for additions to property, equipment and other assets		(145)		1,165		919		(145)

See accompanying condensed notes to consolidated financial statements.

THE MARCUS CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE 13 WEEKS ENDED ~~MARCH 26, 2020~~APRIL 1, 2021

1. General

Basis of Presentation - The unaudited consolidated financial statements for the 13 weeks ended April 1, 2021 and March 26, 2020 ~~and March 28, 2019~~ 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 ~~March 26, 2020,~~April 1, 2021, 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 ~~26, 2019.~~31, 2020.

Accounting Policies - Refer to the Company’s audited consolidated financial statements (including footnotes) for the fiscal year ended December ~~26, 2019,~~31, 2020, contained in the Company’s Annual Report on Form 10-K for such year, for a description of the Company’s accounting policies.

During the 13 weeks ended April 1, 2021, there were no significant changes made to the Company’s significant accounting policies other than the changes attributable to the adoption of Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The convertible debt policy updates are applied prospectively in the Company’s financial statements from January 1, 2021 forward. Reported financial information for the historical comparable period was not revised and continues to be reported under the accounting standards in effect during the historical period. See Note 4 for further discussion.

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 ~~$19,034,000~~$17,958,000 and ~~$15,955,000~~$19,034,000 for the 13 weeks ended April 1, 2021 and March 26, 2020, respectively.

Assets Held for Sale – Long-lived assets that are expected to be sold within the next 12 months and ~~March 28, 2019, respectively.~~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 April 1, 2021 and December 31, 2020, 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. During the 13 weeks ended March 26, 2020, the Company determined that indicators of impairment were present. As such, the Company evaluated the value of its property and equipment and the value of its operating lease right-of-use assets and recorded an impairment charge as discussed in Note 3. There were no indicators of impairment identified during the 13 weeks ended April 1, 2021.

Goodwill – The Company reviews goodwill for impairment annually or more frequently if certain indicators arise. The Company performs its annual impairment test on the last day of its fiscal year. Goodwill is tested for impairment at a reporting unit level, determined to be at an operating segment level. When reviewing goodwill for impairment, the Company considers the amount of excess fair value over the carrying value of the reporting unit, the period of time since its last quantitative test, and other factors to determine whether or not to first perform a qualitative test. When performing a qualitative test, the Company assesses numerous factors to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying value. Examples of qualitative factors that the Company assesses include its share price, its financial performance, market and competitive factors in its industry, and other events specific to the reporting unit. If the Company concludes that it is more likely than not that the fair value of its reporting unit is less than it carrying value, the Company performs a quantitative impairment test by comparing the carrying value of the reporting unit to the estimated fair value.

During the 13 weeks ended March 26, 2020 the Company determined that indicators of impairment were present and performed a quantitative test. In order to determine fair value, the Company used assumptions based on information available to it as of ~~March 26, 2020,~~the date of the quantitative test, including both market data and forecasted future cash ~~flows.~~flows (Level 3 pricing inputs). The Company then used this information to determine fair value. ~~The~~During the 13 weeks ended March 26, 2020, the Company determined that the fair value of ~~the Company's~~its goodwill was greater than ~~its~~it carrying ~~value. As such,~~value and no impairment was ~~identified.~~required. There were no indicators of impairment identified during the 13 weeks ended April 1, 2021.

Trade Name Intangible Asset – The Company recorded a trade name intangible asset in conjunction with the Movie Tavern acquisition ~~(See Note 4)~~ that was determined to have an indefinite life. The Company reviews its trade name intangible asset for impairment at least annually or whenever events or changes in circumstances indicate the carrying value may not be ~~fully~~ recoverable. During the 13 weeks ended March 26, 2020, the Company determined that indicators of impairment were ~~present and~~present. As such, the Company evaluated the value of its trade name intangible asset and recorded an impairment charge of $2,200,000 (see Note 3 for further ~~detail)~~review). There were no indicators of impairment identified during the 13 weeks ended April 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 treasury method. Convertible Class B Common Stock is reflected on an if-converted ~~basis.~~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 computation of diluted net earnings (loss) per share of Common Stock assumes the conversion of Class B Common Stock and, as such, the undistributed earnings (losses) are equal to net earnings (loss) for that computation.

The following table illustrates the computation of Common Stock and Class B Common Stock basic and diluted net earnings (loss) per share for net earnings (loss) and provides a reconciliation of the number of weighted-average basic and diluted shares outstanding:


	13 Weeks Ended				13 Weeks Ended
	March 26, 2020		March 28, 2019		April 1, 2021		March 26, 2020

	(in thousands, except per share data)				(in thousands, except per share data)
Numerator:
Net earnings (loss) attributable to The Marcus Corporation	$	(19,352)	$	1,860
Net loss attributable to The Marcus Corporation					$	(28,130)	$	(19,352)
Denominator:
Denominator for basic EPS		30,975		29,883		31,196		30,975
Effect of dilutive employee stock options		—		616		—		—
Denominator for diluted EPS		30,975		30,499		31,196		30,975
Net earnings (loss) per share - basic:
Net loss per share - basic:
Common Stock	$	(0.64)	$	0.06	$	(0.93)	$	(0.64)
Class B Common Stock	$	(0.58)	$	0.06	$	(0.80)	$	(0.58)
Net earnings (loss) per share - diluted:
Net loss per share - diluted:
Common Stock	$	(0.64)	$	0.06	$	(0.93)	$	(0.64)
Class B Common Stock	$	(0.58)	$	0.06	$	(0.80)	$	(0.58)

For the periods when the Company reports a net loss, common stock equivalents are excluded from the computation of diluted loss per share ~~equals the computation of basic loss per share since common stock equivalents are dilutive due to the net loss.~~as their inclusion would have an antidilutive effect.

Shareholders’ Equity - Activity impacting total shareholders’ equity attributable to The Marcus Corporation and noncontrolling interests for the 13 weeks ended April 1, 2021 and March 26, 2020 ~~and March 28, 2019~~ was as follows (in thousands, except per share data):


													Shareholders’																		Shareholders’
													Equity																		Equity
									Accumulated				Attributable														Accumulated				Attributable
			Class B		Capital				Other				to The		Non-						Class B		Capital				Other				to The		Non-
	Common		Common		in Excess		Retained		Comprehensive		Treasury		Marcus		controlling		Total		Common		Common		in Excess		Retained		Comprehensive		Treasury		Marcus		controlling		Total
	Stock		Stock		of Par		Earnings		Loss		Stock		Corporation		Interests		Equity		Stock		Stock		of Par		Earnings		Loss		Stock		Corporation		Interests		Equity
BALANCES AT DECEMBER 26, 2019	$	23,254	$	7,936	$	145,549	$	461,884	$	(12,648)	$	(4,540)	$	621,435	$	23	$	621,458
Cash Dividends:
$.15 Class B Common Stock		—		—		—		(1,224)		—		—		(1,224)		—		(1,224)
$.17 Common Stock		—		—		—		(3,921)		—		—		(3,921)		—		(3,921)
BALANCES AT DECEMBER 31, 2020																			$	23,264	$	7,926	$	153,529	$	331,897	$	(14,933)	$	(2,960)	$	498,723	$	0	$	498,723
Adoption of ASU No. 2020-06 (see Note 4)																				—		—		(16,511)		702		—		—		(15,809)		—		(15,809)
Exercise of stock options		—		—		5		—		—		40		45		—		45		—		—		(659)		—		—		1,951		1,292		—		1,292
Purchase of treasury stock		—		—		—		—		—		(274)		(274)		—		(274)		—		—		—		—		—		(1,181)		(1,181)		—		(1,181)
Savings and profit-sharing contribution		—		—		299		—		—		1,016		1,315		—		1,315		44		—		968		—		—		—		1,012		—		1,012
Reissuance of treasury stock		—		—		2		—		—		46		48		—		48		—		—		2		—		—		10		12		—		12
Issuance of non-vested stock		—		—		(149)		—		—		149		—		—		—		221		—		(367)		—		—		146		—		—		—
Shared-based compensation		—		—		988		—		—		—		988		—		988		—		—		1,484		—		—		—		1,484		—		1,484
Other																				—		—		—		(1)		—		1		—		—		—
Conversions of Class B Common Stock		10		(10)		—		—		—		—		—		—		—		520		(520)		—		—		—		—		—		—		—
Comprehensive loss		—		—		—		(19,352)		(547)		—		(19,899)		(148)		(20,047)
BALANCES AT MARCH 26, 2020	$	23,264	$	7,926	$	146,694	$	437,387	$	(13,195)	$	(3,563)	$	598,513	$	(125)	$	598,388
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	$	0	$	457,855


													Shareholders’																		Shareholders’
													Equity																		Equity
									Accumulated				Attributable														Accumulated				Attributable
			Class B		Capital				Other				to The		Non-						Class B		Capital				Other				to The		Non-
	Common		Common		in Excess		Retained		Comprehensive		Treasury		Marcus		controlling		Total		Common		Common		in Excess		Retained		Comprehensive		Treasury		Marcus		controlling		Total
	Stock		Stock		of Par		Earnings		Loss		Stock		Corporation		Interests		Equity		Stock		Stock		of Par		Earnings		Loss		Stock		Corporation		Interests		Equity
BALANCES AT DECEMBER 27, 2018	$	22,843	$	8,347	$	63,830	$	439,178	$	(6,758)	$	(37,431)	$	490,009	$	110	$	490,119
BALANCES AT DECEMBER 26, 2019																			$	23,254	$	7,936	$	145,549	$	461,884	$	(12,648)	$	(4,540)	$	621,435	$	23	$	621,458
Cash Dividends:
$.15 Class B Common Stock		—		—		—		(1,183)		—		—		(1,183)		—		(1,183)		—		—		—		(1,224)		—		—		(1,224)		—		(1,224)
$.16 Common Stock		—		—		—		(3,633)		—		—		(3,633)		—		(3,633)		—		—		—		(3,921)		—		—		(3,921)		—		(3,921)
Exercise of stock options		—		—		(78)		—		—		532		454		—		454		—		—		5		—		—		40		45		—		45
Purchase of treasury stock		—		—		—		—		—		(428)		(428)		—		(428)		—		—		—		—		—		(274)		(274)		—		(274)
Savings and profit-sharing contribution		—		—		810		—		—		371		1,181		—		1,181		—		—		299		—		—		1,016		1,315		—		1,315
Reissuance of treasury stock		—		—		31		—		—		16		47		—		47		—		—		2		—		—		46		48		—		48
Issuance of non-vested stock		—		—		(127)		—		—		127		—		—		—		—		—		(149)		—		—		149		—		—		—
Shared-based compensation		—		—		777		—		—		—		777		—		777		—		—		988		—		—		—		988		—		988
Reissuance of treasury stock-acquisition		—		—		77,960		—		—		31,237		109,197		—		109,197
Other		—		—		(109)		—		—		—		(109)		—		(109)
Conversions of Class B Common Stock		411		(411)		—		—		—		—		—		—		—		10		(10)		—		—		—		—		—		—		—
Distributions to noncontrolling interest		—		—		—		—		—		—		—		(60)		(60)
Comprehensive income (loss)		—		—		—		1,860		(297)		—		1,563		(66)		1,497
BALANCES AT MARCH 28, 2019	$	23,254	$	7,936	$	143,094	$	436,222	$	(7,055)	$	(5,576)	$	597,875	$	(16)	$	597,859
Comprehensive loss																				—		—		—		(19,352)		(547)		—		(19,899)		(148)		(20,047)
BALANCES AT MARCH 26, 2020																			$	23,264	$	7,926	$	146,694	$	437,387	$	(13,195)	$	(3,563)	$	598,513	$	(125)	$	598,388

Accumulated Other Comprehensive Loss – Accumulated other comprehensive loss presented in the accompanying consolidated balance sheets consists of the following, all presented net of tax:


	March 26,		December 26,		April 1,		December 31,
	2020		2019		2021		2020

	(in thousands)				(in thousands)
Unrecognized loss on interest rate swap agreements	$	(1,612)	$	(882)	$	(876)	$	(1,086)
Net unrecognized actuarial loss for pension obligation		(11,583)		(11,766)		(13,605)		(13,847)
	$	(13,195)	$	(12,648)	$	(14,481)	$	(14,933)

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 ~~March 26, 2020~~April 1, 2021 and December ~~26, 2019,~~31, 2020, respectively, the Company’s ~~$5,168,000~~$1,715,000 and ~~$5,825,000~~$1,415,000 of debt and equity securities classified as trading were valued using Level 1 pricing inputs and were included in other current assets.

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 ~~March 26, 2020~~April 1, 2021 and December ~~26, 2019,~~31, 2020, respectively, the Company’s ~~$2,181,000~~$1,186,000 and ~~$1,194,000~~$1,470,000 liability related to the Company’s interest rate swap contracts 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 March 26, 2020 and December 26, 2019, 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 are measured on a non-recurring basis are discussed in Note 3 and Note 4.

~~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

March 26, 2020

March 28, 2019

(in thousands)
Service cost

$
274

$
209
Interest cost

342

371
Net amortization of prior service cost and actuarial loss

248

109
Net periodic pension cost

$
864

$
689

~~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.~~

1210

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 April 1, 2021 and December 31, 2020, 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 are measured on a non-recurring basis are discussed in Note 3.

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		13 Weeks
	Ended		Ended
	April 1, 2021		March 26, 2020

	(in thousands)
Service cost	$	281	$	274
Interest cost		300		342
Net amortization of prior service cost and actuarial loss		328		248
Net periodic pension cost	$	909	$	864

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 – The disaggregation of revenues by business segment for the 13 weeks ended April 1, 2021 and March 26, 2020 is as follows (in thousands):


									13 Weeks Ended April 1, 2021
	Reportable Segment								Reportable Segment
	Theatres		Hotels/Resorts		Corporate		Total		Theatres		Hotels/Resorts		Corporate		Total
Theatre admissions	$	55,395	$	—	$	—	$	55,395	$	10,685	$	—	$	—	$	10,685
Rooms		—		16,989		—		16,989		—		9,044		—		9,044
Theatre concessions		45,930		—		—		45,930		9,919		—		—		9,919
Food and beverage		—		13,614		—		13,614		—		5,912		—		5,912
Other revenues ⁽¹⁾		7,703		10,984		89		18,776		1,915		9,879		100		11,894
Cost reimbursements		183		8,573		—		8,756		43		3,290		—		3,333
Total revenues	$	109,211	$	50,160	$	89	$	159,460	$	22,562	$	28,125	$	100	$	50,787

~~(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 weeks ended March 28, 2019 is as follows (in thousands):~~


									13 Weeks Ended March 26, 2020
	Reportable Segment								Reportable Segment
	Theatres		Hotels/Resorts		Corporate		Total		Theatres		Hotels/Resorts		Corporate		Total
Theatre admissions	$	58,969	$	—	$	—	$	58,969	$	55,395	$	—	$	—	$	55,395
Rooms		—		18,938		—		18,938		—		16,989		—		16,989
Theatre concessions		47,155		—		—		47,155		45,930		—		—		45,930
Food and beverage		—		15,783		—		15,783		—		13,614		—		13,614
Other revenues ⁽¹⁾		8,569		12,167		93		20,829		7,703		10,984		89		18,776
Cost reimbursements		192		8,173		—		8,365		183		8,573		—		8,756
Total revenues	$	114,885	$	55,061	$	93	$	170,039	$	109,211	$	50,160	$	89	$	159,460

(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 ~~$37,108,000~~$38,773,000 and ~~$43,200,000~~$37,307,000 as of ~~March 26, 2020~~April 1, 2021 and December ~~26, 2019,~~31, 2020, respectively. The Company had 0 contract assets as of ~~March 26, 2020~~April 1, 2021 and December ~~26, 2019.~~31, 2020. During the 13 weeks ended April 1, 2021, the Company recognized revenue of $2,240,000 that was included in deferred revenue as of December 31, 2020. During the 13 weeks ended March 26, 2020, the Company recognized revenue of $11,240,000 that was included in deferred revenues as of December 26, 2019. The majority of the Company’s deferred revenue relates to non-redeemed gift cards, advanced ticket sales and the Company’s loyalty program. ~~The decrease in deferred revenue from December 26, 2019 to March 26, 2020 was due to theatre gift card redemptions and advanced movie ticket redemptions during the 13 weeks ended March 26, 2020.~~

As of ~~March 26, 2020,~~April 1, 2021, the amount of transaction price allocated to the remaining performance obligations under the Company’s advanced ticket sales was ~~$4,709,000~~$4,579,000 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 ~~March 26, 2020,~~April 1, 2021, the amount of transaction price allocated to the remaining performance obligations related to the amount of Hotels and Resorts non-redeemed gift cards was ~~$2,667,000~~$2,944,000 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 – – On ~~December 27, 2019,~~January 1, 2021, the Company adopted Accounting Standards Update (ASU) ~~No. 2018-14,~~ ~~Compensation—Retirement Benefits—Defined Benefit Plans—General,~~ designed to add, remove and clarify disclosure requirements related to defined benefit pension and other postretirement plans. The adoption of the new standard did not have a material effect on the Company’s consolidated financial statements or footnote disclosures.

~~On December 27, 2019, the Company adopted ASU No. 2017-04,~~ ~~Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment,~~ which eliminates Step 2 of the goodwill impairment test that had required a hypothetical purchase price allocation. Rather, entities will apply the same impairment assessment to all reporting units and recognize an impairment loss for the amount by which a reporting unit’s carrying amount exceeds its fair value, without exceeding the total amount of goodwill allocated to that reporting unit. Entities will continue to have the option to perform a qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The adoption of the new standard did not have a material effect on the Company’s consolidated financial statements.

~~On December 27, 2019, the Company adopted ASU No. 2018-13,~~ ~~Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement.~~ The purpose of ASU No. 2018-13 is to improve the disclosures related to fair value measurements in the financial statements. The improvements include the removal, modification and addition of certain disclosure requirements primarily related to Level 3 fair value measurements. The adoption of the new standard did not have a material effect on the Company’s consolidated financial statements or footnote disclosures.

~~In December 2019, the Financial Accounting Standards Board (FASB) issued ASU~~ No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Incomes Taxes. The amendments in ASU No. 2019-12 are designed to simplify the accounting for incomes taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify generally accepted accounting principles for other areas of Topic 740 by clarifying and amending existing guidance. ~~ASU No. 2019-12 is effective for the Company in fiscal 2021 and early application is permitted.~~ The ~~Company is currently evaluating the effect~~adoption of the new standard ~~will~~did not have a material effect on ~~its~~the Company’s consolidated financial statements.

On January 1, 2021, the Company early adopted ASU No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. Subtopic 470-20 is designed to simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. Refer to Note 4 for further discussion.

In March 2020, the FASB 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 for applying generally accepted accounting principles to contracts, hedging relationships and other transactions that reference London Interbank Offered Rate (LIBOR) or another reference rate expected to be discontinued because of reference rate reform. ASU No. ~~2020-14~~2020-04 is effective as of March 12, 2020 through December 31, 2022. The Company ~~is currently evaluating~~will evaluate the effect the new standard will have on its consolidated financial ~~statements.~~statements when a replacement rate is chosen.

2. Impact of COVID-19 Pandemic

The ~~recent outbreak of the~~ COVID-19 pandemic has had an unprecedented impact on the world and both of the Company’s business segments. The situation continues to be volatile and the social and economic effects are widespread. As an operator of movie theatres, hotels and resorts, restaurants and bars, each of which consists of spaces where customers and guests gather in close proximity, the Company’s businesses are significantly impacted by protective actions that federal, state and local governments have taken to control the spread of the ~~pandemic.~~pandemic, and customers’ reactions or responses to such actions. These actions ~~include,~~have included, among other things, declaring national and state emergencies, encouraging social distancing, restricting freedom of movement and congregation, mandating non-essential business closures, issuing curfews, limiting business capacity, mandating mask-wearing and issuing shelter-in-place, quarantine and stay-at-home orders.

~~As a result~~The Company began the first quarter of ~~these measures, the Company temporarily closed all~~fiscal 2021 with approximately 52% of its theatres ~~on March 17, 2020,~~open. As state and ~~it currently is not generating any revenues from~~local restrictions were eased in several of its ~~theatre operations (other than some limited online sales~~markets and ~~curbside sales~~several new films were released by movie studios, the Company gradually reopened theatres during the 13 weeks ended April 1, 2021 and ended the fiscal 2021 first quarter with approximately 74% of ~~popcorn, pizza~~its theatres open. The majority of the Company’s reopened theatres continued to operate with reduced operating days (Fridays, Saturdays, Sundays and ~~other assorted food~~Tuesdays) and ~~beverage items).~~ reduced operating hours during the fiscal 2021 first quarter. All of the reopened theatres operated at significantly reduced attendance levels compared to prior pre-COVID-19 pandemic years due to customer concerns related to the COVID-19 pandemic and a reduction in the number of new films released during the first quarter of fiscal 2021.

The Company ~~also temporarily closed~~began the first quarter of fiscal 2021 with all eight of its ~~hotel division~~ company-owned hotels and all but one of its managed hotels open. As of the end of the fiscal 2021 first quarter, the Company’s two SafeHouse^®restaurants and bars ~~at approximately~~remain temporarily closed, but the ~~same time~~majority of the Company’s restaurants and ~~closed 5 of its 8 company-owned hotels and resorts on March 24, 2020 due to a significant reduction~~bars in ~~occupancy at those hotels. The Company announced the closing of its remaining 3 company-owned hotels on April 8, 2020. The Company currently is not generating any revenues from~~ its hotels and resorts ~~operations.~~ are open, operating under applicable state and local restrictions and guidelines. The majority of the Company’s hotels and restaurants are generating significantly reduced revenues as compared to prior years.

Since the COVID-19 crisis began, the Company has been working proactively to preserve cash and ~~ensure sufficient liquidity to withstand~~enhance liquidity. In fiscal 2020, the ~~impacts of the COVID-19 pandemic and ultimately emerge in a continued position of strength. In addition to obtaining~~Company obtained additional financing and ~~modifying~~modified previously existing debt covenants (see Note ~~5), additional measures~~7 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020). During the 13 weeks ended April 1, 2021, the Company ~~has already taken and intend~~received the remaining $5,900,000 of requested tax refunds from its fiscal 2019 tax return. During fiscal 2020, a number of states elected to ~~take in~~provide grants to certain businesses most impacted by the ~~future to enhance liquidity include:~~

●

~~Discontinuing all non-essential operating and capital expenditures;~~

●

~~Temporarily laying off the majority of its hourly theatre and hotel associates, in addition to temporarily reducing property management and corporate office staff levels;~~

●

Temporarily reducing the salary of the Company’s chairman and president and chief executive officer by 50%, as well as reducing the salary of all other executives and remaining divisional/corporate staff;

●

~~Temporarily eliminating all board of directors cash compensation;~~

●

~~Temporarily suspending quarterly dividend payments;~~

●

~~Actively working with landlords and major suppliers to modify the timing and terms of certain contractual payments;~~

●

~~Evaluating the provisions of the CARES Act and utilizing the benefits, relief and resources under those provisions as appropriate (See Note 7); and~~

●

~~Evaluating the provisions of any subsequent federal or~~COVID-19 pandemic, utilizing funds received by the applicable state ~~legislation enacted as a response to the COVID-19 pandemic.~~

~~The Amendment (see Note 5) allows the Company to consider additional borrowings from governmental authorities~~ under provisions of the ~~CARES~~Coronavirus Aid, Relief, and Economic Security Act ~~or any other subsequent governmental actions that it could avail itself~~ of ~~if it deemed it necessary and appropriate. Although~~2020 (the “CARES Act”). The Company received $4,913,000 of these prior year grants during the 13 weeks ended April 1, 2021. Also during the 13 weeks ended April 1, 2021, the Company ~~intends~~was awarded and received an additional $1,270,000 in theatre grants from another state.

During the first quarter of fiscal 2021, the Company filed income tax refund claims of $24,200,000 related to ~~seek any available potential benefits under~~its fiscal 2020 tax return, with the CARES Act, it cannot predict the manner in which such benefits will be allocated or administered, and it cannot assure shareholders that it will be able to access such benefits in a timely manner or at all.

~~The timing for when the Company’s theatres and hotels will reopen is uncertain as of the date of this report. The majority of the Company’s theatres~~primary benefit derived from net operating loss carrybacks. Additional income tax loss carryforwards are ~~currently required~~expected to be ~~closed under various state and local governmental restrictions, and the Company~~generated during fiscal 2021 that will continue to monitor and follow those restrictions until lifted. The Company is encouraged by recent federal guidance for a phased reopening of the U.S. economy that included the reopening of movie theatres in phase one, albeit under strict social distancing guidelines. Prior to closing our theatres, the Company had announced a social distancing seating plan that effectively reduced each theatre auditorium’s capacity by 50%. Current expectation is that, when theatres do reopen, they will open to similar capacity limitations. When the Company closed its hotels, it was not because of any governmental requirements to close. The restaurants and bars within the Company’s hotels were required to close, but the hotels themselves were considered “essential businesses” under most definitions. The hotels closed due to a significant drop in demand that made it financially prudent for them to close rather than stay open. As a result, the timing of reopening the Company’s hotels and resorts will likely be driven by an increase in demand, as individual and business travelers begin to travel more freely once again.

benefit future years.

The COVID-19 pandemic and the resulting impact on the ~~Company's~~Company’s operating performance has affected, and may continue to affect, the estimates and assumptions made by management. Such estimates and assumptions include, among other things, the ~~Company's~~Company’s goodwill and long-lived asset valuations and the measurement of compensation costs for annual and long-term incentive plans. Events and changes in circumstances arising after ~~March 26, 2020,~~April 1, 2021, including those resulting from the impacts of COVID-19, will be reflected in ~~management's~~management’s estimates for future periods.

The Company believes that the actions that have been taken will allow it to have sufficient liquidity to meet its obligations as they come due and to comply with its debt covenants for at least 12 months from the issuance date of these unaudited consolidated financial statements. However, future compliance with the ~~Company's financial~~Company’s debt covenants ~~(see Note 5) could be impacted if~~are dependent upon the timing of new movie releases and the protective actions that federal, state and local governments have taken which impact consumer confidence and the speed of recovery of the Company’s theatres and hotels and resorts businesses. The Company’s estimates and assumptions related to future forecasted results of the Company ~~is unable~~are subject to ~~resume~~inherent risk and uncertainty due to the ongoing impact of the COVID-19 pandemic, and actual results could differ materially from estimated amounts and impact the Company’s ability to comply with its ~~operations as currently expected.~~debt covenants.

3. Impairment Charges

During the 13 weeks ended March 26, 2020, the Company determined that indicators of impairment were evident at all asset groups. For certain theatre asset groups, the sum of the estimated undiscounted future cash flows attributable to these assets was less than their carrying amount. The Company evaluated the fair value of these assets, consisting primarily of leasehold improvements, furniture, fixtures and equipment, and operating lease right-of-use assets less lease obligations, and determined that the fair value, measured using Level 3 pricing inputs (using estimated discounted cash flows over the life of the primary asset, including estimated sale proceeds) was less than their carrying values and recorded a $6,512,000 impairment ~~loss.~~loss, reducing certain property and equipment and certain operating lease right-of-use assets. The ~~fair~~remaining net book value of the impaired assets was $13,686,000 as of March 26, ~~2020.~~2020, excluding any applicable remaining lease obligations.

During the 13 weeks ended March 26, 2020, the Company determined that indicators of impairment were evident related to its trade name intangible asset. The Company estimated the fair value of its trade name intangible asset as of March 26, 2020 using an income approach, specifically the relief from royalty method, which uses certain assumptions that are Level 3 pricing inputs, including future revenues attributable to the trade name, a royalty rate (1.0% as of March 26, 2020) and a discount rate (17.0% as of March 26, 2020). ~~The~~During the 13 weeks ended March 26, 2020, the Company determined that the fair value of the asset was less than the carrying value and recorded a $2,200,000 impairment loss. The fair value of the trade name intangible asset was ~~$7,300,000~~$6,900,000 as of ~~March 26, 2020.~~April 1, 2021.

~~4. Acquisition~~13

On February 1, 2019, the Company acquired 22 dine-in theatres with 208 screens located in nine Southern and Eastern states from VSS-Southern Theatres LLC (Movie Tavern) for a total purchase price of $139,310,000, consisting of $30,000,000 in cash, subject to certain adjustments, and 2,450,000 shares of the Company’s Common Stock with a value of $109,197,000, based on the Company’s closing share price as of January 31, 2019. During the 13 weeks ended March 28, 2019, the Company incurred acquisition costs as a result of the Movie Tavern acquisition of approximately $1,153,000 which were expensed as incurred and included in administrative expense in the consolidated statement of earnings. The purchase price allocation was finalized in fiscal 2019 using Level 3 pricing inputs and is reflected in the consolidated balance sheets for the periods presented.

5.4. Long-Term Debt and Short-Term Borrowings

Long-term debt is summarized as follows:


	March 26, 2020		December 26, 2019		April 1,2021		December 31, 2020

	(in thousands, except payment data)				(in thousands, except payment data)
Mortgage notes	$	24,482	$	24,571	$	24,482	$	24,482
Senior notes		109,000		109,000		100,000		100,000
Unsecured term note due February 2025, with monthly principal and interest payments of $39,110, bearing interest at 5.75%		2,006		2,093		1,642		1,735
Convertible senior notes						100,050		100,050
Payroll Protection Program loans						3,424		3,424
Revolving credit agreement		220,000		81,000		14,000		—
Debt issuance costs		(305)		(322)		(4,467)		(3,684)
		355,183		216,342		239,131		226,007
Less current maturities, net of issuance costs		9,977		9,910		11,361		10,548
Less debt discount						—		22,423
	$	345,206	$	206,432	$	227,770	$	193,036

~~First Amendment to~~ Credit Agreement

~~During the 13 weeks ended March 26, 2020,~~At April 1, 2021, the Company ~~replaced its then-existing Credit Agreement (the Credit Agreement) with~~had a ~~new five-year $225,000,000~~revolving credit facility totaling $225,000,000 in place under an existing credit agreement that expires in January 2025. On April 29, 2020, the Company entered into the First Amendment to Credit Agreement (the Amendment) among the Company and several banks, amending its existing Credit Agreement datedmatures on January 9, ~~2020.~~2025. There were borrowings of $14,000,000 outstanding on the revolving credit facility at April 1, 2021, bearing interest at LIBOR plus a margin, effectively 3.35% at April 1, 2021. The ~~Amendment~~revolving credit facility requires an annual facility fee of 0.40% on the total commitment. Availability under the line at April 1, 2021, was $207,199,000, after taking into consideration outstanding letters of credit that reduce revolver availability.

The credit agreement also provides for a ~~new $90,800,000 364-day~~ Senior Term Loan A (the ~~Term~~“Term Loan ~~A).~~A”) that matures September 22, 2021. The ~~Company used the proceeds from the~~$90,800,000 Term Loan A, ~~to pay down~~net of amortized debt issuance costs of $436,000 and prepayments of $7,105,000 made in conjunction with certain asset dispositions, is included in short-term borrowings ~~under the Credit Agreement, to pay costs and expenses related to the Amendment and for general corporate purposes.~~

Borrowings under the Credit Agreement bear interest at a variable rate equal to: (i) LIBOR, subject to a 1% floor, plus a specified margin; or (ii) the base rate (which is the highest of (a) the prime rate, (b) the greater of the federal funds rate and the overnight bank funding rate plus 0.50% or (c) the sum of l% plus one-month LIBOR plus a specified margin based upon the Company's consolidated debt to capitalization ratio as of the most recent determination date). Pursuant to the Amendment, as of April 29, 2020: (A) in respect of revolving loans, (1) the Company is charged a facility fee equal to 0.40% of the total revolving credit facility commitment and (2) the specified margin is 2.1% for LIBOR borrowings and 1.1% for ABR borrowings, which specified margin will remain in effect until the end of the first fiscal quarter ending after the end of any period in which any portion of the term loan facility remains outstanding or the testing of any financial covenant in the Credit Agreement is suspended (the "Specified Period"); and (B) in respect of term loans, the specified margin is 2.5% for LIBOR borrowings and 1.5% for ABR borrowings, in each case, at all times.

The Amendment also amends the Credit Agreement to modify various restrictions and covenants applicable to the Company. Among other modifications, the Amendment amends the Credit Agreement to include restrictions on the ability of the Company to incur additional indebtedness, pay dividends and other distributions, and make voluntary prepayments on or defeasance of the Company's 4.02% Senior Notes due August 2025 and 4.32% Senior Notes due February 2027. Further, the Amendment amends the Credit Agreement to: (i) suspend testing of the minimum consolidated fixed charge coverage ratio of 3.0 to 1.0 until the earlier to occur of (a) September 2021 and (b) the last day of the Company's fiscal quarter in which the Company provides notice to the administrative agent that the Company is reinstating the testing of such ratio; (ii) add a covenant requiring the Company's consolidated EBITDA to be greater than (a) negative $57 million as of June 25, 2020 for the fiscal quarter then ending, (b) negative $90 million as of September 24, 2020 for the two consecutive fiscal quarters then ending, (c) negative $65 million as of December 31, 2020 for the three consecutive fiscal quarters then ending, (d) negative $40 million as of April 1, 2021 for the four consecutive fiscal quarters then ending, and (e) $42 million as of July 1, 2021 for the four consecutive fiscal quarters then ending; (iii) add a covenant requiring the Company's consolidated liquidity to be greater than (a) $102 million as of June 25, 2020, (b) $67 million as of September 24, 2020, (c) $78.5 million as of December 31, 2020, (d) $83 millionbalance sheet as of April 1, 2021, and (e) $103.5 million as of July 1, 2021, which minimum liquidity amounts will be reduced by $50 million for each such testing date if the term loans are paid in full as of such date; and (iv) add a covenant prohibiting the Company from incurring or making capital expenditures (a) during the period from April 1, 2020 through December 31, 2020, in excess of $22.5 million plus certain adjustments, or (b) during the Company's 2021 fiscal year, in excess of $50 million plus certain adjustments.

Pursuant to the Amendment, the Company is required to apply net cash proceeds received from certain events, including certain asset dispositions, casualty losses, condemnations, equity issuances, capital contributions, and the incurrence of certain debt, to prepay outstanding term loans. In addition, if,bears interest at any time during the Specified Period the Company's aggregate unrestricted cash on hand exceeds $125 million, the Amendment requires the Company to prepay revolving loans under the Credit Agreement by the amount of such excess, without a corresponding reduction in the revolving commitments under the Credit Agreement.3.75%.

In connection with the ~~Amendment:~~credit agreement: (i) the Company has pledged, subject to certain exceptions, security interests and liens in and on (a) substantially all of ~~their~~its respective personal property assets and (b) certain of ~~their~~its respective real property assets, in each case, to secure the ~~Credit Agreement~~credit agreement and related obligations; and (ii) certain ~~subsidiaries~~ of the ~~Company~~Company’s subsidiaries have guaranteed the ~~Company's~~Company’s obligations under the ~~Credit Agreement.~~credit agreement. The foregoing security interests, liens and guaranties will remain in effect until the Collateral Release Date (as defined in the ~~Amendment)~~credit agreement).

The ~~Credit Agreement~~credit agreement contains customary events of default. If an event of default under the ~~Credit Agreement~~credit agreement occurs and is continuing, then, among other things, the lenders may declare any outstanding obligations under the ~~Credit Agreement~~credit agreement to be immediately due and payable and exercise rights and remedies against the pledged collateral.

~~Except as amended by the Amendment, the remaining terms of the Credit Agreement remain in full force and effect.~~

~~First Amendment to Note Purchase Agreements~~Convertible Senior Notes

The $109,000,000 of senior notes include a $9,000,000 Note Purchase Agreement, dated April 17, 2018, that was paid off on April 17, 2020. The remaining $100,000,000 of senior notes consist of 2 Purchase Agreements maturing in 2021 through 2027, require annual principal payments in varying installments and bear interest payable semi-annually at fixed rates ranging from 4.02% to 4.32%.

~~On April 29,~~During fiscal 2020, the Company ~~and certain purchasers~~ entered into ~~amendments (the ''Note Amendments")~~a purchase agreement to ~~the Note Purchase Agreement, dated June 27, 2013,~~issue and the Note Purchase Agreement, dated December 21, 2016 (collectively, the "Note Purchase Agreements"). The Note Amendments amend certain covenants and other terms of the Note Purchase Agreements and are identical to the amended covenants that are referenced in the Amendment section above.

Additionally, from April 29, 2020 until the last day of the first fiscal quarter ending after the Collateral Release Date (as defined in the Note Amendments), the Company is required to pay a fee to each Note holder in an amount equal to 0.725% of thesell $100,050,000 aggregate principal amount of its 5.00% Convertible Senior Notes ~~held by such holder. Such fee is payable quarterly (0.18125%~~due 2025 (the “Convertible Notes.”) The Convertible Notes were issued pursuant to an indenture (the “Indenture”), dated September 22, 2020, between the Company and U.S. Bank National Association, as trustee.

Prior to fiscal 2021, the Company separated the Convertible Notes into liability and equity components. The carrying amount of the ~~aggregate~~liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component, representing the conversion option, was determined by deducting the fair value of the liability component from the par value of the Convertible Notes. The difference between the principal amount of the Convertible Notes and the liability component represented the debt discount, which was recorded as a direct deduction from the related debt liability in the consolidated balance sheet.

On January 1, 2021, the Company early adopted ASU No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. ASU No. 2020-06 is designed to simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The amendments remove the separation models in ASC 470-20 for certain contracts. As a result, embedded conversion features would not be presented separately in equity, rather, the contract would be accounted for as a single liability measured at its amortized cost. Upon adoption, the Company recorded a one-time cumulative effect adjustment to the balance sheet on January 1, 2021 as follows:


	Balance at
	December 31,		Cumulative		Balance at
	2020		adjustment		January 1, 2021

	(in thousands)
Long-term debt	$	193,036	$	21,393	$	214,429
Deferred income taxes		33,429		(5,584)		27,845
Capital in excess of par		153,529		(16,511)		137,018
Retained earnings		331,897		702		332,599

Additionally, upon adoption of ASU No. 2020-06, the Company uses the if-converted method when calculating diluted earnings (loss) per ~~quarter)~~share for convertible instruments.

The Convertible Notes bear interest from September 22, 2020 at a rate of 5.00% per year. Interest will be payable semiannually in arrears on March 15 and September 15 of each year, beginning on March 15, 2021. The Convertible Notes may bear additional interest under specified circumstances relating to the Company’s failure to comply with its reporting obligations under the Indenture or if the Convertible Notes are not freely tradeable as required by the Indenture. The Convertible Notes will mature on September 15, 2025, unless earlier repurchased or converted. Prior to March 15, 2025, the Convertible Notes will be convertible at the option of the holders only under the following circumstances: (i) during any fiscal quarter commencing ~~with~~after the fiscal quarter ending ~~June 25,~~on December 31, 2020 (and only during such fiscal quarter), if the last reported sale price of the Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (ii) during the five business day period immediately after any five consecutive trading day period, or the measurement period, in which the trading price per $1,000 principal amount of the Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Common Stock and the conversion rate on each such trading day; or (iii) upon the occurrence of specified corporate events. On or after March 15, 2025, the Convertible Notes will be convertible at the option of the holders at any time until the close of business on the second scheduled trading day immediately preceding the maturity date.

Upon conversion, the Convertible Notes may be settled, at the Company’s election, in cash, shares of Common Stock or a combination thereof. The initial conversion rate is 90.8038 shares of Common Stock per $1,000 principal amount of the Convertible Notes (equivalent to an initial conversion price of approximately $11.01 per share of Common Stock), representing an initial conversion premium of approximately 22.5% to the $8.99 last reported sale price of the Common Stock on The New York Stock Exchange on September 17, 2020.

If the Company undergoes certain fundamental changes, holders of Convertible Notes may require the Company to repurchase for cash all or part of their Convertible Notes for a purchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In addition, if a make-whole fundamental change occurs prior to the maturity date, the Company will, under certain circumstances, increase the conversion rate for holders who convert Convertible Notes in connection with such make-whole fundamental change. The Company may not redeem the ~~Note Amendments: (i)~~Convertible Notes before maturity and no “sinking fund” is provided for the Company has pledged, subject to certain exceptions, security interests and liens in and on (a) substantially all of their respective personal property assets and (b) certain of their respective real property assets, in each case, to secure the Notes and related obligations; and (ii) certain subsidiaries of the Company have guaranteed the Company's obligations under the Note Purchase Agreements and theConvertible Notes. The ~~foregoing security interests, liens and guaranties will remain in effect until~~Indenture includes covenants customary for securities similar to the ~~Collateral Release Date.~~

~~The Note Purchase Agreements contain customary~~Convertible Notes, sets forth certain events of ~~default. If an event of~~ default ~~under~~after which the ~~Note Purchase Agreements occurs and is continuing, then, among other things, all~~Convertible Notes ~~then outstanding become~~may be declared immediately due and payable and sets forth certain types of bankruptcy or insolvency events of default involving the ~~Note holders may exercise their rights~~Company and ~~remedies against~~certain of its subsidiaries after which the ~~pledged collateral.~~Convertible Notes become automatically due and payable.

As of April 2, 2021, the first day of the Company’s second quarter, a conversion feature on the Convertible Notes had been met, and thus the Company’s Convertible Notes are now eligible for conversion. The Company has the ability to settle the conversion in Company stock. As such, the Convertible Notes will continue to be classified as long-term. Future convertibility and resulting balance sheet classification of this liability will be monitored at each quarterly reporting date and will be analyzed dependent upon market prices of the Company’s common stock during the prescribed measurement period. No Convertible Notes have been converted to date and the Company does not expect any to be converted within the next 12 months.

Derivatives

The Company utilizes derivatives principally to manage market risks and reduce its exposure resulting from fluctuations in interest rates. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objectives and strategies for undertaking various hedge transactions.

The Company entered into two interest rate swap agreements on March 1, 2018 covering $50,000,000 of floating rate debt. The first agreement has a notional amount of $25,000,000, ~~expires~~expired March 1, 2021, and ~~requires~~required the Company to pay interest at a defined rate of 2.559% while receiving interest at a defined variable rate of one-month ~~LIBOR (1.625% at March 26, 2020).~~LIBOR. The second agreement has a notional amount of $25,000,000, expires March 1, 2023, and requires the Company to pay interest at a defined rate of 2.687% while receiving interest at a defined variable rate of one-month LIBOR ~~(1.625%~~(0.125% at ~~March 26, 2020)~~April 1, 2021). The Company recognizes derivatives as either assets or liabilities on the consolidated balance sheets at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and on the type of hedging relationship. Derivatives that do not qualify for hedge accounting must be adjusted to fair value through earnings. For derivatives that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of accumulated other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The Company’s interest rate swap agreements are considered effective and qualify as cash flow hedges. The Company assesses, both at the inception of each hedge and on an on-going basis, whether the derivatives that are used in its hedging transactions are highly effective in offsetting changes in cash flows of the hedged items. As of ~~March 26, 2020,~~April 1, 2021, the remaining interest rate ~~swaps were~~swap was considered highly effective. The fair value of the interest rate ~~swaps~~swap on ~~March 26, 2020~~April 1, 2021 was a liability of ~~$2,181,000, of~~$1,186,000, which ~~$514,000~~ is included in other ~~accrued liabilities and $1,667,000 is included in deferred compensation and other~~long-term obligations in the consolidated balance sheet. The fair value of the interest rate ~~swap~~swaps on December ~~26, 2019,~~31, 2020, was a liability of ~~$1,194,000 and~~$1,470,000, of which $100,000 was included in ~~deferred compensation~~other accrued liabilities and $1,370,000 was included in other long-term obligations in the consolidated balance sheet. The Company does not expect the interest rate ~~swaps~~swap to have a material effect on earnings within the next 12 months.

6.5. Leases

The Company determines if an arrangement is a lease at inception. The Company evaluates each lease for classification as either a finance lease or an operating lease according to accounting guidance ASU No. 2016-02, Leases (Topic 842). The Company performs this evaluation at the inception of the lease and when a modification is made to a lease. The Company leases real estate and equipment with lease terms of one year to 45 years, some of which include options to extend and/or terminate the lease.

The majority of the Company’s lease agreements include fixed rental payments. For those leases with variable payments based on increases in an index subsequent to lease commencement, such payments are recognized as variable lease expense as they occur. Variable lease payments that do not depend on an index or rate, including those that depend on the Company’s performance or use of the underlying asset, are also expensed as incurred. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term.

Total lease cost consists of the following:


		13 Weeks			13 Weeks		13 Weeks
		Ended			Ended		Ended
Lease Cost	Classification	March 26, 2020		Classification	April 1, 2021		March 26, 2020

		(in thousands)			(in thousands)
Finance lease costs:
Amortization of finance lease assets	Depreciation and amortization	$	711	Depreciation and amortization	$	712	$	711
Interest on lease liabilities	Interest expense		269	Interest expense		250		269
		$	980		$	962	$	980
Operating lease costs:
Operating lease costs	Rent expense	$	6,667	Rent expense	$	6,321	$	6,667
Variable lease cost	Rent expense		227	Rent expense		(15)		227
Short-term lease cost	Rent expense		60	Rent expense		35		60
		$	6,954		$	6,341	$	6,954

1916

Additional ~~Information~~information related to leases is as follows:


	13 Weeks		13 Weeks		13 Weeks
	Ended		Ended		Ended
Other Information	March 26, 2020		April 1, 2021		March 26, 2020

	(in thousands)		(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Financing cash flows from finance leases	$	635	$	630	$	635
Operating cash flows from finance leases		269		250		269
Operating cash flows from operating leases		4,644		7,393		4,644

Right of use assets obtained in exchange for new lease obligations:
Finance lease liabilities		25		—		25
Operating lease liabilities		9,630		1,575		9,630

March 26, 2020

(in thousands)
Finance leases:

Property and equipment – gross

$
74,382
Accumulated depreciation and amortization

(53,631)
Property and equipment - net

$
20,751


	April 1, 2021		December 31, 2020

	(in thousands)
Finance leases:
Property and equipment – gross	$	75,338	$	75,322
Accumulated depreciation and amortization		(56,286)		(55,547)
Property and equipment - net	$	19,502	$	19,775

Remaining lease terms and discount rates are as follows:


~~Lease Term and Discount Rate~~	~~March 26, 2020~~
~~Weighted-average remaining lease terms:~~
~~Finance leases~~	10	~~years~~
~~Operating leases~~	15	~~years~~

~~Weighted-average discount rates:~~
~~Finance leases~~	~~4.67~~	%
~~Operating leases~~	~~4.54~~	%


Lease Term and Discount Rate	April 1, 2021	December 31, 2020
Weighted-average remaining lease terms:
Finance leases	9 years	9 years
Operating leases	15 years	15 years

Weighted-average discount rates:
Finance leases	4.58%	4.62%
Operating leases	4.52%	4.53%

As of March 26, 2020, the Company had a build-to-suit lease arrangement in which the Company is responsible for the construction of a new leased theatre and for paying construction costs during development. Construction costs will be reimbursed by the landlord up to an agreed upon amount. During construction, the Company is deemed to not have control of the assets or the leased premises and has recorded the development expenditures in other assets on the consolidated balance sheet. The project is currently on hold dueDue to the COVID-19 pandemic, ~~so a completion date is not known at this time.~~

~~Subsequent to~~the Company temporarily closed all of its theatres on March ~~26,~~17, 2020 and had temporarily closed all of its company-owned hotels by April 8, 2020. At that time, the Company began actively working with landlords to discuss changes to the timing of lease payments and contract terms of leases due to the ~~COVID-19~~ pandemic. The lease terms ~~are being~~were negotiated on a ~~lease by lease~~lease-by-lease basis with individual landlords. In conjunction with these lease discussions, the Company ~~anticipates electing~~obtained lease concessions for the majority of its leases. Substantially all of the lease concessions were for the deferral of lease payments into future periods. This resulted in the total payments required by the modified contract being substantially the same as or less than the total payments required by the original contract. The Company has made the policy election to account for these lease concessions as if they were made under the enforceable rights included in the original agreement and are thus outside of the modification framework. ~~Therefore, in making this election, the~~The Company ~~will not need~~has elected to ~~perform a lease-by-lease analysis to evaluate the enforceable rights and will instead simply treat the change~~account for these concessions as if no changes to the ~~enforceable rights~~lease contract were made and has continued to recognize rent expense during the deferral period. Deferred rent payments of approximately $6,021,000 for the Company’s operating leases have been included ~~or excluded~~ in the ~~original agreement.~~total operating lease obligations as of April 1, 2021, of which approximately $1,570,000 is included in long-term operating lease obligations.

2017

6. Income Taxes

The Company’s effective income tax rate, adjusted for losses from noncontrolling interests, for the 13 weeks ended April 1, 2021 and March 26, 2020 was 27.7% and ~~March 28, 2019 was~~ 25.3% ~~and 0.7%~~, respectively. The Company’s effective income tax rate during the ~~13 weeks ended March 28, 2019 was reduced by excess tax benefits on share-based compensation.~~first quarter of fiscal 2021 benefitted from nonrecurring adjustments specific to the first quarter. The Company does not include the income tax expense or benefit related to the net earnings or loss attributable to noncontrolling ~~interests~~interest in its income tax expense or benefit as the entity is considered a pass-through entity and, as such, the income tax expense or benefit is attributable to its ~~owners.~~owner.

~~The Company has evaluated~~During the provisions of the Coronavirus Aid, Relief, and Economic Security Act of 2020 (the CARES Act) that was signed subsequent to March 26, 2020. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer-side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. Based upon a preliminary review of these provisions,13 weeks ended April 1, 2021, the Company ~~believes it will be eligible for an~~received the remaining $5,900,000 of requested tax refunds from its fiscal 2019 tax return. Also during the 13 weeks ended April 1, 2021, the Company filed income tax refund ~~in the $15-25 million range in~~claims of $24,200,000 related to its fiscal 2020 ~~related to new rules for qualified improvement property expenditures and~~tax return, with the primary benefit derived from net operating loss carrybacks. ~~The Company would also be able to apply any~~Additional income tax loss ~~incurred in fiscal 2020~~carryforwards are expected to ~~prior year income for what may~~ be ~~a significant refund in~~generated during fiscal 2021 ~~when~~that will benefit future years.

7. Joint Venture Transactions

During the ~~Company’s fiscal~~13 weeks ended April 1, 2021, pursuant to a recapitalization of a joint venture whose investment value was $0 as of December 31, 2020, ~~tax return~~the Company surrendered its ownership interest in this equity method investment. Also during the 13 weeks ended April 1, 2021, the Company sold its interest in an equity investment without a readily determinable fair value for $4,150,000 and recorded a gain of $2,079,000, which is ~~filed.~~included in gain (loss) on disposition of property, equipment and other assets in the consolidated statement of earnings (loss).

8. Business Segment Information

The Company’s primary operations are reported in the following business segments: Theatres and Hotels/Resorts. Corporate items include amounts not allocable to the business segments. Corporate revenues consist principally of rent and the corporate operating loss includes general corporate expenses. Corporate information technology costs and accounting shared services costs are allocated to the business segments based upon several factors, including actual usage and segment revenues.

Following is a summary of business segment information for the 13 weeks ~~ended~~April 1, 2021 and March 26, 2020 ~~and March 28, 2019~~ (in thousands):


13 Weeks Ended			Hotels/		Corporate						Hotels/		Corporate
March 26, 2020	Theatres		Resorts		Items		Total
April 1, 2021									Theatres		Resorts		Items		Total
Revenues	$	109,211	$	50,160	$	89	$	159,460	$	22,562	$	28,125	$	100	$	50,787
Operating income (loss)		(7,083)		(10,853)		(4,264)		(22,200)
Operating loss										(25,639)		(5,708)		(4,314)		(35,661)
Depreciation and amortization		13,510		5,412		111		19,033		12,786		5,127		66		17,979


13 Weeks Ended			Hotels/		Corporate						Hotels/		Corporate
March 28, 2019	Theatres		Resorts		Items		Total
March 26, 2020									Theatres		Resorts		Items		Total
Revenues	$	114,885	$	55,061	$	93	$	170,039	$	109,211	$	50,160	$	89	$	159,460
Operating income (loss)		12,594		(3,153)		(4,491)		4,950
Operating loss										(7,083)		(10,853)		(4,264)		(22,200)
Depreciation and amortization		11,127		4,767		91		15,985		13,510		5,412		111		19,033

2118

THE MARCUS CORPORATION

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Special Note Regarding Forward-Looking Statements

Certain matters discussed in this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) and elsewhere in this Form 10-Q are “forward-looking statements” intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of ~~1995, including the statements made in the “Impact of the COVID-19 Pandemic” section of this MD&A.~~1995. These forward-looking statements may generally be identified as such because the context of such statements include words such as we “believe,” “anticipate,” “expect” or words of similar import. Similarly, statements that describe our future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties which may cause results to differ materially from those expected, including, but not limited to, the following: (1) the adverse effects of the COVID-19 pandemic on our theatre and hotels and resorts businesses, results of operations, liquidity, cash flows, financial condition, access to credit markets and ability to service our existing and future indebtedness; (2) the duration of the COVID-19 pandemic and related ~~shelter at home~~government restrictions and social distancing requirements and the level of customer demand following the relaxation of such requirements; (3) the availability, in terms of both quantity and audience appeal, of motion pictures for our theatre division (particularly following the COVID-19 pandemic, during which the production of new movie content ~~has essentially ceased)~~temporarily ceased and release dates for motion pictures have been postponed), as well as other industry dynamics such as the maintenance of a suitable window between the date such motion pictures are released in theatres and the date they are released to other distribution channels; (4) the effects of adverse economic conditions in our markets, including but not limited to, those caused by the COVID-19 pandemic; (5) the effects of adverse economic conditions, including but not limited to, those caused by the COVID-19 pandemic, on our ability to obtain financing on reasonable and acceptable terms, if at all; (6) the effects on our occupancy and room rates caused by the COVID-19 pandemic and the effects on our occupancy and room rates of the relative industry supply of available rooms at comparable lodging facilities in our markets once hotels and resorts ~~are able to reopen; (6)~~have more fully reopened; (7) the effects of competitive conditions in our markets; ~~(7)~~(8) our ability to achieve expected benefits and performance from our strategic initiatives and acquisitions; ~~(8)~~(9) the effects of increasing depreciation expenses, reduced operating profits during major property renovations, impairment losses, and preopening and start-up costs due to the capital intensive nature of our business; ~~(9)~~(10) the effects of weather conditions, particularly during the winter in the Midwest and in our other markets; ~~(10)~~(11) our ability to identify properties to acquire, develop and/or manage and the continuing availability of funds for such development; ~~(11)~~(12) the adverse impact on business and consumer spending on travel, leisure and entertainment resulting from terrorist attacks in the United States, other incidents of violence in public venues such as hotels and movie theatres or epidemics (such as the COVID-19 pandemic); ~~(12)~~and (13) a disruption in our business and reputational and economic risks associated with civil securities claims brought by ~~shareholders; (13) our ability~~shareholders. These statements are not guarantees of future performance and are subject to ~~timely~~risks, uncertainties and ~~successfully integrate the Movie Tavern operations into our own circuit; and (14) our ability~~other factors, including developments related to achieve the additional revenues and operating income that we anticipate from our additional week of operations in fiscal 2020 and certain extraordinary events that are scheduled to take place in or near Milwaukee during fiscal 2020, such as the Democratic National Convention and The Ryder Cup, which may be significantly impacted by the COVID-19 ~~pandemic.~~pandemic, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. Our forward-looking statements are based upon our assumptions, which are based upon currently available information, including assumptions about our ability to manage difficulties associated with or related to the COVID-19 pandemic; the assumption that our theatre closures, hotel closures and restaurant closures are not expected to be permanent or to re-occur; the continued availability of our ~~workforce following the temporary layoffs we have implemented as a result of the COVID-19 pandemic;~~workforce; and the temporary and long-term effects of the COVID-19 pandemic on our business. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are made only as of the date of this Form 10-Q and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

RESULTS OF OPERATIONS

General

We report our consolidated and individual segment results of operations on a ~~52-or~~52- or 53-week fiscal year ending on the last Thursday in December. Fiscal 2021 is a 52-week year beginning on January 1, 2021 and ending on December 30, 2021. Fiscal 2020 iswas a 53-week year ~~beginning~~that began on December 27, 2019 and ~~ending~~ended on December 31, 2020. ~~Fiscal 2019 was a 52-week year beginning December 28, 2018 and ended on December 26, 2019.~~

We divide our fiscal year into three 13-week quarters and a final quarter consisting of 13 or 14 weeks. The first quarter of fiscal 2021 consisted of the 13-week period beginning on January 1, 2021 and ended on April 1, 2021. The first quarter of fiscal 2020 consisted of the 13-week period beginning December 27, 2019 and ended on March 26, 2020. ~~The first quarter of fiscal 2019 consisted of the 13-week period beginning on December 28, 2018 and ended on March 28, 2019.~~ Our primary operations are reported in the following two business segments: movie theatres and hotels and resorts.

For discussion regarding the impact of COVID-19 and related economic conditions on the Company’s results for the year ended December 31, 2020, see “Part II-Item 7-Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s 2020 Annual Report. For further discussion regarding the impacts of COVID-19 and related economic conditions on the Company’s results for the quarter ended April 1, 2021 and potential future impacts, see immediately below, and also refer to the discussion of the Company’s operational risks and financial risks found in “Part I-Item 1A-Risk Factors” in the Company’s 2020 Annual Report.

Impact of the COVID-19 Pandemic

The ~~recent outbreak of the~~ COVID-19 pandemic has had an unprecedented impact on the world and both of our business segments. The situation continues to be volatile and the social and economic effects are widespread. As an operator of movie theatres, hotels and resorts, restaurants and bars, each of which consists of spaces where customers and guests gather in close proximity, our businesses are significantly impacted by protective actions that federal, state and local governments have taken to control the spread of the ~~pandemic.~~pandemic, and our customers’ reactions or responses to such actions. These actions ~~include,~~have included, among other things, declaring national and state emergencies, encouraging social distancing, restricting freedom of movement and congregation, mandating non-essential business closures, issuing curfews, limiting business capacity, mandating mask-wearing and issuing shelter-in-place, quarantine and stay-at-home orders.

~~As a result~~We began the first quarter of ~~these measures, we temporarily closed all~~fiscal 2021 with approximately 52% of our theatres ~~on March 17, 2020,~~open. As state and local restrictions were eased in several of our markets and several new films were released by movie studios, we ~~currently are not generating any revenues from~~gradually reopened theatres during the quarter and ended the fiscal 2021 first quarter with approximately 74% of our ~~theatre operations (other than some limited online sales~~theatres open. The majority of our reopened theatres continued to operate with reduced operating days (Fridays, Saturdays, Sundays and ~~curbside sales~~Tuesdays) and reduced operating hours during the fiscal 2021 first quarter. All of ~~popcorn, pizza~~our reopened theatres operated at significantly reduced attendance levels compared to prior pre-COVID-19 pandemic years due to customer concerns related to the COVID-19 pandemic and ~~other assorted food and beverage items).~~a reduction in the number of new films released during the first quarter of fiscal 2021. As of the date of this report, we had reopened several additional theatres, bringing our number of open theatres to approximately 89% of our total theatres. We also ~~temporarily closed all~~have recently increased the number of operating days and operating hours at many of our ~~hotel division~~reopened theatres. We currently expect to open the majority of our remaining closed theatres and return the majority of our theatres to standard operating days and hours by the end of May 2021 as more anticipated new films are released and demand returns.

We began the first quarter of fiscal 2021 with all eight of our company-owned hotels and all but one of our managed hotels open. Our two SafeHouse^® restaurants and bars ~~at approximately~~remain temporarily closed, but the ~~same time and closed five~~majority of our ~~eight company-owned hotels~~restaurants and ~~resorts on March 24, 2020 due to a significant reduction~~bars in ~~occupancy at those hotels. We announced the closing of our remaining three company-owned hotels on April 8, 2020. We currently are not generating any revenues from~~ our hotels and resorts ~~operations.~~ are open, operating under applicable state and local restrictions and guidelines, and in some cases reduced operating hours. The majority of our hotels and restaurants are generating significantly reduced revenues as compared to prior years.

Maintaining and protecting a strong balance sheet has always been a core philosophy of The Marcus Corporation during our 85-year ~~history. As a result, we believe we entered this global~~history, and, despite the COVID-19 ~~crisis with a strong~~pandemic, our financial ~~position. At the end of fiscal 2019, our debt-to-capitalization ratio was a very modest 26%.~~position remains strong. As of ~~March 26, 2020,~~April 1, 2021, we had a cash balance of ~~$126.5~~approximately $6 million, ~~which reflects the borrowing of $220.0~~$207 million of availability under our ~~$225.0~~$225 million revolving credit ~~facility. Even if~~facility, and our ~~theatres~~debt-to-capitalization ratio was 0.41. With this significant liquidity, combined with the expected receipt of income tax refunds and ~~hotels remained closed for~~proceeds from the ~~remainder~~sale of ~~fiscal 2020, which we believe is a very unlikely scenario,~~surplus real estate (discussed below), we believe we ~~would have sufficient cash~~are positioned to meet our obligations as they come due and continue to sustain our operations throughout fiscal 2021 and into fiscal 2022, even ~~without the new financing described below.~~

~~Nonetheless, the COVID-19 pandemic has had and may~~if our properties continue to ~~have adverse effects on our business, results of operations, cash flows, financial condition, access~~generate significantly reduced revenues throughout fiscal 2021. We will continue to ~~credit markets and ability to service our existing and future indebtedness, some of which may be significant. In light of the COVID-19 pandemic, we have been working~~work to preserve cash and ensure sufficient liquidity to endure the impacts of the global ~~crisis,~~pandemic, even if prolonged. ~~As a result, on April 29, 2020, we entered into the First Amendment to Credit Agreement (the “Amendment”) among the company and several banks, amending~~

Early in our existing credit agreement dated January 9, 2020 (the “Credit Agreement”). The Amendment provides a new $90.8 million 364-day Senior Term Loan A (the “Term Loan A”) to further solidify our already strong balance sheet. We used the proceeds from the Term Loan A to pay down borrowings under the Credit Agreement, to pay costs and expenses related to the Amendment and for general corporate purposes. With this additional financing, we have provided for an additional “insurance policy” to further enhance our liquidity, and we believe it positions us to continue to sustain our operations well into fiscal 2021, even in the unlikely scenario that some or all of our properties remain closed.

The Amendment, described in greater detail below in the Liquidity section of this MD&A, also amends certain covenants and other terms, including waiving our compliance with the consolidated fixed charge coverage ratio covenant until September 2021. In addition, during the period in which the Term Loan A is outstanding and testing of financial covenants under the Credit Agreement is suspended, the Amendment also provides for a facility fee on the total revolver commitment equal to 0.40% and that the specified margin for borrowings under the revolving credit facility is 2.1% for LIBOR borrowings and 1.1% for ABR borrowings. The Amendment also provides that the specified margin for borrowings under the Term Loan A is 2.5% for LIBOR borrowings and 1.5% for ABR borrowings, in each case, at all times. The Amendment also establishes new minimum EBITDA and consolidated liquidity covenants and includes additional limitations on share repurchases, capital expenditures and the incurrence of priority debt. The Amendment also requires us to temporarily suspend our quarterly dividend payments for the remainder of 2020 and limits the total amount of quarterly dividend payments during the first ~~two quarters~~quarter of fiscal 2021, ~~unless~~we received the ~~Term Loan A is repaid, and~~remaining $5.9 million of requested tax refunds from our fiscal 2019 tax return. During the first quarter of fiscal 2021, we are in compliance with prior financial covenants under the Credit Agreement, at which point we have the ability to declare quarterly dividend payments as deemed appropriate. Pursuant to the Amendment, all borrowings under the Credit Agreement will be secured by substantially all of our personal and real property assets, until such date as the Term Loan A is repaid and we are in compliance with prior financial covenants under the Credit Agreement, at which point the Credit Agreement will return to an unsecured facility.

In conjunction with the Amendment, we also entered into amendments to the purchase agreements for our outstanding 4.02% and 4.32% senior notes on April 29, 2020 that waive the consolidated fixed charge coverage ratio covenant until September 2021 and secures all borrowings under the senior notes by the majority of our assets, until such date as the Term Loan A is repaid and we are in compliance with prior financial covenants, at which point the senior notes will return to unsecured notes. The amendments to the senior notes also include an additional fee payable to each note holder equal to 0.725% per annum on outstanding borrowings until the notes return to unsecured status. Additionally, the amendments establish new minimum EBITDA and consolidated liquidity covenants and additional limitations on share repurchases, capital expenditures and the incurrence of priority debt substantially identical to those included in the Amendment.

Since the COVID-19 crisis began, we have been working proactively to preserve cash and ensure sufficient liquidity to withstand the impacts of the COVID-19 pandemic and ultimately emerge in a continued position of strength. In addition to temporarily suspending quarterly dividend payments as required by the Amendment, additional measures we have already taken and intend to take in the future to enhance liquidity include:

●

~~Discontinuing all non-essential operating and capital expenditures;~~

●

~~Temporarily laying off the majority of our hourly theatre and hotel associates, in addition to temporarily reducing property management and corporate office staff levels;~~

●

Temporarily reducing the salary of our chairman and president and chief executive officer (“CEO”) by 50%, as well as reducing the salary of all other executives and remaining divisional/corporate staff;

●

~~Temporarily eliminating all board of directors cash compensation;~~

●

~~Actively working with landlords and major suppliers to modify the timing and terms of certain contractual payments;~~

●

Evaluating the provisions of the Coronavirus Aid, Relief, and Economic Security Act of 2020 (the “CARES Act”) and utilizing the benefits, relief and resources under those provisions as appropriate; and

●

~~Evaluating the provisions of any subsequent federal or state legislation enacted as a response to the COVID-19 pandemic.~~

The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer-side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. Under the CARES Act: (i) for taxable years beginning before 2021, net operating loss carryforwards and carrybacks may offset 100% of taxable income; (ii) net operating losses arising in 2018, 2019 and 2020 taxable years may be carried back to each of the preceding five years to generate a refund; and (iii) for taxable years beginning in 2019 and 2020, the base for interest deductibility is increased from 30% to 50% of EBITDA. Based upon a preliminary review of these provisions, we believe we will be eligible to receive anfiled income tax refund ~~in the $15-25~~claims of $24.2 million ~~range in fiscal 2020~~ related to new rules for qualified improvement property expenditures and net operating loss carrybacks. We would also be able to apply any tax loss incurred in fiscal 2020 to prior year income for what may be a significant refund in fiscal 2021 when our fiscal 2020 tax return, ~~is filed. The Amendment allows us~~with the primary benefit derived from net operating loss carrybacks to ~~consider additional borrowings from governmental authorities~~prior years. Additional income tax loss carryforwards are expected to be generated during fiscal 2021 that will benefit future years.

During the fourth quarter of fiscal 2020, a number of states elected to provide grants to certain businesses most impacted by the COVID-19 pandemic, utilizing funds received by the applicable state under provisions of the ~~CARES~~Coronavirus Aid, Relief, and Economic Security Act ~~or any other subsequent governmental actions that~~of 2020 (the “CARES Act”). We received $4.9 million of these prior year grants in January 2021. Early in fiscal 2021, we ~~could avail ourselves~~were awarded and received an additional $1.3 million in theatre grants from another state, further contributing to our strong liquidity position as of ~~if we deemed it necessary and appropriate. Although we intend~~April 1, 2021.

We also continue to seek any available potential benefits under the CARES Act, we cannot predict the manner in which such benefits will be allocated or administered, and we cannot assure you that we will be able to access such benefits in a timely manner or at all.

~~It is also important to note our significant~~pursue sales of surplus real estate ~~ownership. In addition to our owned hotels, unlike most of our peers we own the underlying~~and other non-core real estate ~~for the majority of~~to further enhance our ~~theatres (representing over 60% of our screens), thereby reducing our monthly fixed lease payments. This real estate ownership is a significant advantage for us relative to our peers.~~

The COVID-19 pandemic and the fact that all of our theatres and the majority of our hotels were closed as of March 26, 2020 required us to review many of the assets on our balance sheet. We increased our allowances for bad debts and wrote off a portion of our food inventories in both our theatre and hotels and resorts divisions. We reviewed our indefinite life trade name intangible asset and determined that, as a result of a change in circumstances, the carrying value exceeded fair value, and we reported a pre-tax impairment charge of $2.2 million duringliquidity. During the first quarter of fiscal ~~2020. We reviewed our long-lived assets, including property~~2021, we sold an equity interest in a joint venture, generating total proceeds of approximately $4.2 million. As of April 1, 2021, we had letters of intent or contracts to sell several pieces of real estate with a total carrying value of $8.7 million and ~~equipment and operating lease right-of-use assets, for impairment due to the change in circumstances and determined that an additional aggregate pre-tax impairment charge of $5.9 million was required~~we believe we may receive total sales proceeds from real estate sales during the ~~first quarter of fiscal 2020~~next 12-18 months totaling approximately $10-$40 million, depending upon demand for ~~several theatre properties. We reviewed goodwill at~~ the theatre reporting unit level and determined that the fair value of our theatre reporting unit exceeded our carrying value as of March 26, 2020 and thus was not impaired as of that date. As a result of temporarily closing the majority of our properties, we also incurred approximately $5.5 million of nonrecurring expenses related primarily to salary continuation payments to employees temporarily laid off. real estate in question.

The timing for when our theatres and hotels will reopen is uncertain as of the date of this report. The majority of our theatres are currently required to be closed under various state and local governmental restrictions, and we will continue to monitor and follow those restrictions until lifted. We were encouraged by recent federal guidance for a phased reopening of the U.S. economy that included the reopening of movie theatres in phase one, albeit under strict social distancing guidelines. Prior to closing our theatres, we had announced a social distancing seating plan that effectively reduced each theatre auditorium’s capacity by 50%. Our current expectation is that, when we do reopen, we will open to similar capacity limitations. A reduction in capacity does not necessarily translate to an equal reduction in potential revenues. Reduced capacity may potentially impact attendance on $5 Tuesdays and on opening weekends of major new film releases, but other showings may be relatively unaffected given normal attendance counts, and based upon our past experience, we believe that customers impacted on those $5 Tuesdays and opening weekends may adapt to reduced seat availability by shifting their attendance to different days and times of day.

~~We believe that the exhibition industry has historically fared well during recessions, should one occur as a result of the COVID-19 pandemic, and we~~ remain optimistic that the theatre industry will rebound and benefit from pent-up social demand as a greater percentage of the population is vaccinated, home sheltering subsides and people seek togetherness with a return to normalcy. A return to “normalcy” may span multiple months driven by staggered theatre openings, ~~due to government limits,~~ reduced operating days and hours, lingering social distancing requirements, the progress of the vaccination rollout in each state and a gradual ramp-up of consumer comfort with public gatherings. We are ~~exploring~~very encouraged by the recent performance of Godzilla vs. Kong, Mortal Kombat and Demon Slayer, the best performing films since the pandemic began last year. The continued lessening of state and local restrictions in key markets such as New York and Los Angeles is also a number of additional measures within our theatres to help support that consumer comfort. We also expect to initially reopen with older film product and other creative concepts to help excite consumers to return to theatres. We expect the film studios to work closely with the exhibition industry to provide the necessary product at favorable terms to facilitate a phased reopening.very positive sign. As described further below in the Theatres section of this MD&A, a significant number of films originally scheduled to be released inthrough March ~~through June 2020~~2021 have been delayed until later in fiscal ~~2020~~2021 or fiscal ~~2021,~~2022, further increasing the quality and quantity of films expected to be available during those future time periods.

As expected, the primary customer for hotels during the first quarter of fiscal 2021 has continued to come from the “drive-to leisure” market. Demand from this customer segment exceeded our expectations during the fiscal 2021 first quarter. Most organizations implemented travel bans at the onset of the pandemic and are currently only allowing essential travel, which will likely limit business travel in the near term. As of the date of this report, ~~most studios have kept their release schedule~~our group room revenue bookings for ~~films~~fiscal 2021 - commonly referred to in ~~place beginning in July 2020.~~

~~There has been some speculation that~~ the COVID-19 pandemic may result in a change in how film studios may distribute their product in the future, including accelerating the release of films on alternate distribution channels such as premium video-on-demand and streaming services. In fact, in a couple of cases, films that were scheduled to be released to theatres have instead been released directly to these alternate channels. We believe that these select few instances are isolated and were a response to the immediate circumstances of nearly 100% of movie theatres being closed worldwide and do not reflect a change in permanent distribution plans of these studios. Other films with greater expected box office potential from these same studios were delayed rather than released early and comments from the film community in general have been very supportive of the importance of the theatrical experience. The exhibition industry is an $11-$12 billion industry in the U.S. and approximately $40 billion worldwide, and the film studios derive a significant portion of their return on investment in film content from theatrical distribution. We believe distributing films in a movie theatre will continue to be an important component of their business model.

When we closed our hotels, it was not because of any governmental requirements to close. Our restaurants and bars within our hotels were required to close, but the hotels themselves were considered “essential businesses” under most definitions. We closed our hotels due to a significant drop in demand that made it financially prudent for us to close rather than stay open. As a result, the timing of reopening our hotels and resorts ~~will likely~~industry as “group pace” - is running significantly behind where we would historically be ~~driven by an increase~~at this same time in ~~demand,~~prior years, but we are beginning to experience increased booking activity for later in fiscal 2021 and particularly for fiscal 2022 and beyond. Banquet and catering revenue pace for fiscal 2021 is also running behind where we would typically be at this same time in prior years, but not as ~~individual and business travelers begin~~much as group room revenues, due in part to ~~travel more freely once again.~~increases in wedding bookings. The future economic environment ~~in place as this reopening happens~~ will also have a significant impact on the pace of our return to “normal” hotel operations. After past events such as 9/11 and the 2008 financial crisis, hotel demand softened for a period of time, particularly among business transient and group business travelers as travel budgets tightened in uncertain economic times. Whether the return to more normal demand is relatively rapid, as it was after 9/11, or occurs over the course of one or more years, as it was after the 2008 financial crisis, is unknown at this time. We also do not know what social distancing or other measures might be required when we reopen that may limit our initial revenue potential.

We cannot assure that the impact of the COVID-19 pandemic will not continue to have ana material adverse effect on both our theatre and hotels and resorts businesses, results of operations, cash flows, financial condition, access to credit markets and ability to service our existing and future ~~indebtedness, some of which may be significant.~~indebtedness.

Overall Results

The following table sets forth revenues, operating ~~income (loss),~~loss, other income (expense), net ~~earnings (loss)~~loss and net ~~earnings (loss)~~loss per diluted common share for the first quarter of fiscal ~~2020~~2021 and fiscal ~~2019~~2020 (in millions, except for per share and variance percentage data):


	First Quarter								First Quarter
						Variance								Variance
	F2020		F2019		Amt.		Pct.		F2021		F2020		Amt.		Pct.
Revenues	$	159.5	$	170.0	$	(10.5)	(6.2)	%	$	50.8	$	159.5	$	(108.7)	(68.2)	%
Operating income (loss)		(22.2)		5.0		(27.2)	(548.5)	%
Operating loss										(35.7)		(22.2)		(13.5)	(60.6)	%
Other income (expense)		(3.9)		(3.1)		(0.8)	(23.1)	%		(3.2)		(3.9)		0.7	16.6	%
Net loss attributable to noncontrolling interests		(0.1)		(0.1)		—	N/A			—		(0.1)		0.1	100.0	%
Net earnings (loss) attributable to The Marcus Corp.		(19.4)		1.9		(21.3)	(1,140.4)	%
Net earnings (loss) per common share - diluted	$	(0.64)	$	0.06	$	(0.70)	(1,166.7)	%
Net loss attributable to The Marcus Corp.										(28.1)		(19.4)		(8.7)	(45.4)	%
Net loss per common share - diluted									$	(0.93)	$	(0.64)	$	(0.29)	(45.3)	%

Revenues decreased and operating loss, net loss attributable to The Marcus Corporation and net loss per diluted common share increased during the first quarter of fiscal ~~2020~~2021 compared to the first quarter of fiscal ~~2019~~2020 due to decreased revenues from both our theatre division and hotels and resorts ~~division.~~division as a result of the continuing impact of the COVID-19 pandemic. Our theatre division benefited from a nonrecurring government grant during the fiscal 2021 first quarter and both of our operating divisions were negatively impacted by nonrecurring expenses during the fiscal 2020 first quarter. Operating ~~income (loss) (earnings/loss before other income/expense and income taxes) decreased~~losses from our corporate items, which include amounts not allocable to the business segments, increased slightly during the first quarter of fiscal ~~2020~~2021 compared to the first quarter of fiscal ~~2019~~2020 due primarily to ~~a decrease in theatre division operating income and~~ increased ~~operating losses from our hotels and resorts division, partially offset by a decrease in our operating~~non-cash long-term incentive compensation expenses. Net loss ~~from corporate items. Both of our divisions were negatively impacted by closures of the majority of our properties as a result of the COVID-19 pandemic~~attributable to The Marcus Corporation during the first quarter of fiscal ~~2020. Net earnings (loss) attributable to The Marcus Corporation decreased during the first quarter of fiscal 2020~~2021 was negatively impacted by increased interest expense compared to the first quarter of fiscal ~~2019 due to decreased~~2020 and benefited from a gain on disposition of property, equipment and other assets during the first quarter of fiscal 2021.

Our operating ~~income and investment income, partially offset~~loss during the first quarter of fiscal 2021 was favorably impacted by ~~decreased interest expense and income taxes.~~

a state government grant of approximately $1.3 million, or approximately $0.03 per diluted common share. Our operating loss during the first quarter of fiscal 2020 was negatively impacted by nonrecurring expenses totaling approximately $5.5 million, or approximately $0.13 per diluted common share, related to expenses incurred (primarily payroll continuation payments to employees temporarily laid off) due to the closing of all of our movie theatres and the majority of our hotels and resorts during the last two weeks of ~~the~~such quarter. In addition, impairment charges related to intangible assets and several theatre locations negatively impacted our fiscal 2020 first quarter operating income by approximately $8.7 million, or approximately $0.21 per diluted common share.

~~On February 1, 2019, we acquired the assets~~We recognized investment income of Movie Tavern®, a New Orleans-based industry leading circuit known for its in-theatre dining concept (the “Movie Tavern Acquisition”). Now branded Movie Tavern by Marcus, the acquired circuit consisted of 208 screens at 22 locations in nine states – Arkansas, Colorado, Georgia, Kentucky, Louisiana, New York, Pennsylvania, Texas and Virginia. The purchase price consisted of $30 million in cash, subject to certain adjustments, and 2,450,000 shares of our common stock for a total purchase price of approximately $139 million, based upon our closing share price on January 31, 2019. Acquisition and preopening expenses related to the Movie Tavern Acquisition negatively impacted our operating income$40,000 during the first quarter of fiscal ~~2019 by approximately $1.8 million, or $0.04 per diluted common share.~~

We closed the InterContinental Milwaukee hotel in early January 2019 and began a substantial renovation project that converted this hotel into an experiential arts hotel named Saint Kate® – The Arts Hotel (the “Saint Kate”). Revenues from our hotels and resorts division during the first quarter of fiscal 2019 were unfavorably impacted by this closing. Division revenues during the first quarter of fiscal 2019 were also negatively impacted by a major renovation occurring at our Hilton Madison hotel. Our operating loss from our hotels and resorts division during the first quarter of fiscal 2019 was negatively impacted by preopening expenses related to the Saint Kate hotel conversion of approximately $1.2 million, or $0.03 per diluted common share.

~~Operating losses from our corporate items, which include amounts not allocable to the business segments, decreased slightly during the first quarter of fiscal 2020~~2021 compared to the first quarter of fiscal 2019 due in part to reduced accruals for bonus and donation expenses as a result of operating losses this quarter, partially offset by increased non-cash long-term incentive compensation expenses.

~~We recognized~~ an investment loss of $695,000 during the first quarter of fiscal ~~2020 compared to investment income of $473,000 during the first quarter of fiscal 2019.~~2020. The investment loss during the fiscal 2020 first quarter was due to decreases in the value of marketable securities resulting from significant market declines arising from the COVID-19 pandemic and its impact on the U.S. economy.

Our interest expense totaled $4.8 million for the first quarter of fiscal 2021 compared to $2.5 million for the first quarter of fiscal 2020, ~~compared to $3.1 million for the first quarter of fiscal 2019, a decrease~~an increase of approximately ~~$600,000,~~$2.3 million, or ~~17.8%~~92.5%. The ~~decrease~~increase in interest expense during the first quarter of fiscal ~~2020~~2021 was due in part to ~~reduced borrowing levels during the majority of the quarter compared to the first quarter of fiscal 2019~~increased borrowings and ~~a lower~~an increase in our average interest ~~rate~~rate. In addition, interest expense increased during the first quarter of fiscal ~~2020 as a result~~2021 due to the fact that we incurred approximately $623,000 in noncash amortization of ~~decreases in short-term interest rates on our variable rate debt. We expect our interest expense~~debt issuance costs, compared to ~~increase~~approximately $49,000 of such costs during the ~~remaining quarters~~first quarter of fiscal ~~2020 due~~2020. On January 1, 2021, we elected to ~~increased borrowings, as discussed~~early adopt ASU No. 2020-06 (described in Note 1 of the condensed notes to our consolidated financial statements included in this report above), which resulted in the ~~Liquidity section~~elimination of ~~this MD&A below.~~noncash discount on convertible notes beginning with the first quarter of fiscal 2021. Changes in our borrowing levels due to variations in our operating results, capital expenditures, ~~share repurchases~~acquisition opportunities (or the lack thereof) and asset sale proceeds, among other items, may impact, either favorably or unfavorably, our actual reported interest expense in future periods, as ~~would further~~may changes in short-term interest ~~rates and changes in the mix between fixed rate debt and variable rate debt in our debt portfolio.~~rates.

We did not have any significant variations in other expenses ~~gains on disposition of property, equipment and other assets~~ or equity losses from unconsolidated joint ventures during the first quarter of fiscal ~~2020~~2021 compared to the first quarter of fiscal ~~2019.~~2020. We reported a net gain on disposition of property, equipment and other assets of approximately $2.2 million during the first quarter of fiscal 2021, compared to net losses on disposition of property, equipment and other assets of $12,000 during the first quarter of fiscal 2020. The net gain on disposition of property, equipment and other assets during the first quarter of fiscal 2021 was due primarily to the sale of an equity investment in a joint venture. The timing of periodic sales and disposals of our property, equipment and ~~equipment~~other assets varies from quarter to quarter, resulting in variations in our reported gains or losses on disposition of property, equipment and ~~equipment.~~ other assets. We anticipate the potential for additional disposition gains or losses from periodic sales of property, equipment and other assets during fiscal 2021 and beyond.

We reported an income tax ~~benefit for the first quarter~~benefits of ~~fiscal 2020 of~~$10.8 million and $6.6 million, ~~compared to income tax expense of $13,000 for the first quarter of fiscal 2019. The large income tax benefit~~respectively, during the first ~~quarter~~quarters of fiscal ~~2020~~2021 and fiscal 2020. Our fiscal 2021 first quarter effective income tax rate was ~~the result of the significant loss before income taxes due~~27.7%, compared to ~~the closing of the majority of~~ our ~~properties in March 2020 due to the COVID-19 pandemic. Our~~ fiscal 2020 first quarter effective income tax rate ~~after adjusting for a loss from noncontrolling interests that is not tax-effected because the entity involved is a tax pass-through entity, was~~of 25.3%~~, compared to our fiscal 2019 first quarter~~. Our effective income tax rate during the first quarter of ~~0.7%, which~~fiscal 2021 benefitted from ~~excess tax benefits on share-based compensation and~~ nonrecurring adjustments specific to the first ~~quarter of fiscal 2019.~~quarter. We anticipate that our effective income tax rate for the remaining quarters of fiscal ~~2020~~2021 may ~~increase if we incur losses that can~~ be ~~carried back to prior years (that had a higher~~in the 24-26% range, excluding any potential changes in federal or state income tax ~~rate) under provisions included in the CARES Act.~~rates or other one-time tax benefits. Our actual fiscal ~~2020~~2021 effective income tax rate may be different from our estimated quarterly rates depending upon actual facts and circumstances.

The operating results of one majority-owned hotel, The Skirvin Hilton, are included in the hotels and resorts division revenue and operating income during the first quarters of fiscal ~~2020~~2021 and fiscal ~~2019,~~2020, and the after-tax net earnings or loss attributable to noncontrolling interests is deducted from or added to net earnings on the consolidated statements of earnings. We reported a net loss attributable to noncontrolling interests of $148,000 during the first quarter of fiscal 2020. As a result of the noncontrolling interest balance reaching zero during fiscal 2020, we do not expect to report additional net losses attributable to noncontrolling interests ~~of $148,000 and $66,000, respectively, during~~in future periods until the ~~first quarters of fiscal 2020 and fiscal 2019.~~ hotel returns to profitability.

Theatres

The following table sets forth revenues, operating ~~income (loss)~~loss and operating margin for our theatre division for the first quarter of fiscal ~~2020~~2021 and fiscal ~~2019~~2020 (in millions, except for variance percentage and operating margin):


	First Quarter										First Quarter
							Variance										Variance
	F2020			F2019			Amt.		Pct.		F2021			F2020			Amt.		Pct.
Revenues	$	109.2		$	114.9		$	(5.7)	(4.9)	%	$	22.6		$	109.2		$	(86.6)	(79.3)	%
Operating income (loss)		(7.1)			12.6			(19.7)	(156.2)	%
Operating loss												(25.6)			(7.1)			(18.5)	(262.0)	%
Operating margin (% of revenues)		(6.5)	%		11.0	%						(113.6)	%		(6.5)	%

Our theatre division revenues decreased and operating loss increased significantly during the first quarter of fiscal 2021 compared to the first quarter of fiscal 2020 due entirely to decreased attendance. We began the first quarter of fiscal 2021 with approximately 52% of our theatres open. As state and local restrictions were eased in several of our markets and several new films were released by movie studios, we gradually reopened theatres during the quarter and ended the fiscal 2021 first quarter with approximately 74% of our theatres open. All of our reopened theatres operated at significantly reduced attendance levels compared to prior years due to customer concerns related to the COVID-19 pandemic and a reduction in the number of new films released during the quarter. A nonrecurring state government grant of approximately $1.3 million favorably impacted our theatre division operating loss during the first quarter of fiscal 2021.

Our theatres were open for all but nine days during the first quarter of fiscal 2020 ~~compared to the first quarter of fiscal 2019 due primarily to decreased attendance as a result of the closing of~~(we closed all of our theatres on March 17, 2020 in response to the COVID-19 pandemic. The revenue impact of the decreased attendance was partially offset by an increase in our average ticket price and average concession revenues per person during the first quarter of fiscal 2020 compared to the first quarter of fiscal 2019.pandemic). In addition our revenues during the first quarter of fiscal 2020 included an extra month of Movie Tavern revenues (Movie Tavern theatres were not acquired until February 1, 2019) and a new Movie Tavern theatre opened in Brookfield, Wisconsin during the fourth quarter of fiscal 2019.

~~Our theatre division operating income (loss) and operating margin decreased during the first quarter of fiscal 2020 compared to the first quarter of fiscal 2019 due primarily~~ to the impact of ~~the~~ reduced attendance ~~and revenues at comparable theatres. In addition,~~due to the theatre closings, our theatre division operating loss during the first quarter of fiscal 2020 was negatively impacted by nonrecurring expenses totaling approximately $2.8 million related to expenses incurred (primarily payroll continuation payments to employees temporarily laid off) due to the closing of all of our movie theatres during ~~the~~such quarter. Impairment charges related to intangible assets and several theatre locations also negatively impacted our theatre division fiscal 2020 first quarter operating loss by approximately $8.7 million. Our operating income and operating margin during the first quarter of fiscal 2019 was negatively impacted by approximately $1.8 million of acquisition and preopening expenses related to the Movie Tavern Acquisition.

Our theatre division operating margin also declined during the first quarter of fiscal 2020 compared to the first quarter of fiscal 2019 due to the inclusion of an extra month of Movie Tavern operating results. Our Movie Tavern theatres have a lower operating margin than our legacy theatres due to the fact that all 22 acquired theatres are leased rather than owned (rent expense is generally significantly higher than depreciation expense). In addition, the fact that a larger portion of Movie Tavern revenues are derived from the sale of in-theatre food and beverage also contributes to lower operating margins, as food and labor costs are generally higher for those items compared to traditional concession items.

The following table provides a further breakdown of the components of revenues for the theatre division for the first quarter of fiscal ~~2020~~2021 and fiscal ~~2019~~2020 (in millions, except for variance percentage):

First Quarter

Variance


F2020

F2019

Amt.

Pct.

Admission revenues

$
55.4

$
59.0

$
(3.6)

(6.1)
%
Concession revenues

45.9

47.2

(1.3)

(2.6)
%
Other revenues

7.7

8.5

(0.8)

(10.1)
%

109.0

114.7

(5.7)

(4.9)
%
Cost reimbursements

0.2

0.2

—

(4.7)
%
Total revenues

$
109.2

$
114.9

$
(5.7)

(4.9)
%


	First Quarter
					Variance
	F2021		F2020		Amt.		Pct.
Admission revenues	$	10.7	$	55.4	$	(44.7)	(80.7)	%
Concession revenues		9.9		45.9		(36.0)	(78.4)	%
Other revenues		1.9		7.7		(5.8)	(75.1)	%
		22.5		109.0		(86.5)	(79.3)	%
Cost reimbursements		0.1		0.2		(0.1)	(76.5)	%
Total revenues	$	22.6	$	109.2	$	(86.6)	(79.3)	%

As described above, the decreases in revenues are due to the temporary closing of all of our theatres on March 17, 2020 in response to the COVID-19 pandemic. Conversely, the extra month of Movie Tavern operations favorably impacted our revenues during the first quarter of fiscal 2020. Excluding the acquired and newly built Movie Tavern theatres, admission revenues and concession revenues for comparable theatres decreased 14.8% and 13.7%, respectively, during the first quarter of fiscal 2020 compared to the first quarter of fiscal 2019.

According to data received from ~~Rentrak~~Comscore (a national box office reporting service for the theatre industry) and compiled by us to evaluate our fiscal ~~2020~~2021 first quarter results, United States box office receipts ~~(excluding new builds for the top 10 theatre circuits)~~ decreased ~~17.0%~~89.7% during our fiscal ~~2020~~2021 first quarter, indicating that our decrease in admission revenues during the first quarter of fiscal ~~2020~~2021 of ~~14.8% for our comparable theatres~~80.7% outperformed the industry by ~~2.2~~9.0 percentage points. Based upon this metric, we believe we were the top performing theatre circuit during the first quarter of fiscal 2021 compared to the top 10 circuits in the U.S. Additional data received and compiled by us from Comscore indicates our admission revenues during the first quarter of fiscal 2021 represented approximately 4.8% of the total admission revenues in the U.S. during the period (commonly referred to as market share in our industry). This represents an approximately 55% increase over our reported market share of approximately 3.1% during the first quarter of fiscal 2019, prior to the pandemic. Closed theatres in other markets in the U.S. contributed to our outperformance in both of these metrics and we expect our outperformance to lessen in future periods as more theatres open. Our goal is to continue our past pattern of outperforming the industry, but with the majority of our renovations now completed, ~~for our legacy circuit,~~ our ability to do so in any given quarter will likely be partially dependent upon film mix, weather and the competitive landscape in our ~~markets~~markets.

Sales attributable to our Marcus Private Cinema (“MPC”) program have exceeded expectations, partially offsetting reduced traditional attendance and ~~the impact of local sporting events. As discussed further below, we believe film mix favorably impacted~~contributing to our ~~relative performance versus the nation during the fiscal 2020 period.~~

~~We did not include the performance of our Movie Tavern theatres, which we acquired in February 2019, in the comparison to the~~ industry above because we did not own Movie Tavern during the entire fiscal 2019 first quarter. Based upon data available to us from the previous owner for the month of January 2019, however, we believe that our Movie Tavern theatres outperformed the industry by over ten percentage pointsoutperformance during the first quarter of fiscal ~~2020 compared~~2021. Under this program, a guest may purchase an entire auditorium for up to 20 of his or her friends and family for a fixed charge, ranging from $99 to $179 (depending upon the ~~equivalent~~film and number of weeks it has been in theatres). During the last 11 weeks of the fiscal 2021 first quarter, we averaged over 1,500 MPC events per week, accounting for approximately 21% of ~~fiscal 2019. We believe that this outperformance was attributable to investments we have made in new features and amenities in select theatres and~~ our ~~implementation of innovative operating and marketing strategies that have increased~~admission revenues during those weeks.

Total theatre attendance including our $5 Tuesday promotion and our customer loyalty program. Adding the Movie Tavern theatres to our comparable theatres, we believe our combined theatre circuit outperformed the industry by approximately four percentage pointsdecreased 81.4% during the first quarter of fiscal ~~2020~~2021 compared to the first quarter of fiscal ~~2019.~~

~~Our average ticket price increased 7.0%~~2020, resulting in decreases in both admission revenues and concession revenues. A significant decrease in the number of new films, the lack of awareness of theatres being open (due in part to limited new film advertising), ongoing state and local capacity restrictions and customer concerns regarding visiting indoor businesses all contributed to the reductions in attendance during the first quarter of fiscal ~~2020 compared~~2021. As described above, attendance from MPC events (estimated to average 13 guests per event) partially offset the reduction in traditional movie going attendance.

Our highest grossing films during the fiscal 2021 first quarter ~~of fiscal 2019, due in part to~~included Raya and the extra month of Movie Tavern theatres in certain markets where competitive pricing is slightly higher than in our legacy Midwestern markets. Excluding all Movie Tavern theatres, our average ticket price at comparable theatres increased 6.0% during the first quarter of fiscal 2020 compared to the first quarter of fiscal 2019. At the beginning of the second quarter of fiscal 2019, we implemented selected ticket price increases at certain locations to reflect the competitive market in which those theatres operate. In addition, we enacted a modest price increase for our proprietary premium large format (“PLF”) screensLast Dragon, Tom and converted our admission ticket pricing to a sales tax additive (or “tax-on-top”) model, consistent with the majority of our competitors. These modest ticket price increases had a favorable impact on our average ticket price during the first quarter of fiscal 2020.

We also believe that a change in film product mix had a favorable impact on our average ticket price during the first quarter of fiscal 2020 compared to the first quarter of fiscal 2019. This year’s top two films, ~~Star Wars~~Jerry:, The ~~Rise of Skywalker~~Croods: A New Age, Wonder Woman 1984 and ~~Bad Boys for Life~~The Little Things~~, attracted a more adult audience and performed extremely well in~~. We believe our ~~PLF screens, with a corresponding price premium, favorably impacting our average ticket price during the first quarter of fiscal 2020. In addition, only one~~theatre circuit outperformed its typical market share on four of our top five films during the first quarter of fiscal ~~2020 (#5,~~ ~~Sonic the Hedgehog~~~~) was aimed at a younger audience. Conversely, two of our top five~~2021. Due to less films ~~last year,~~ ~~How to~~~~Train Your Dragon~~: ~~The Hidden World~~ ~~and~~ ~~The Lego Movie 2~~: ~~The Second Part,~~ ~~were animated films that generally appeal to a younger audience (resulting in a higher percentage of lower-priced children’s tickets sold), negatively impacting our average ticket price~~being released during the first quarter of fiscal ~~2019. The increase in average ticket price favorably impacted our admission revenues of our comparable theatres by approximately $2.5 million during~~2021, the ~~first quarter of fiscal 2020 compared to the first quarter of fiscal 2019.~~

Our concession revenues decreased during the first quarter of fiscal 2020 compared to the first quarter of fiscal 2019 due to the mid-March closure of all of our theatres, partially offset by revenues from the new Movie Tavern theatre that opened during the fourth quarter of fiscal 2019, the extra month of operations for the acquired Movie Tavern theatres and an increase in our average concession revenues per person. Our average concession revenues per person increased by 10.9% during the first quarter of fiscal 2020 compared to the first quarter of fiscal 2019, due in part to the extra month of operations for the Movie Tavern theatres. Excluding all Movie Tavern theatres, our average concession revenues per person at comparable theatres increased 7.4% during the first quarter of fiscal 2020 compared to the first quarter of fiscal 2019. The increase in our average concession revenues per person contributed approximately $2.2 million to our comparable theatre concession revenues during the first quarter of fiscal 2020 compared to the first quarter of fiscal 2019.

~~A change in concession product mix, including increased sales of non-traditional food and beverage items from our increased number of~~ ~~Take Five~~^SM~~Lounge~~, ~~Zaffiro’s® Express~~, ~~Reel Sizzle®~~ and in-theatre dining outlets were the primary reasons for our increased average concession sales per person during the fiscal 2020 first quarter. We believe that the above-described change in film product mix during the first quarter of fiscal 2020 favorably impacted the growth of our overall average concession sales per person during the fiscal 2020 first quarter, as adult-oriented films such as our top four films during this year’s first quarter tend to contribute more to sales of non-traditional food and beverage items compared to family-oriented and animated films such as the two films in our top five during the first quarter of fiscal 2019 described above.

Other revenues decreased by approximately $800,000 during the first quarter of fiscal 2020 compared to the first quarter of fiscal 2019. This decrease was due to reduced internet surcharge ticketing fees and decreased lobby and preshow advertising income as a result of the mid-March closure of all of our theatres.

Total theatre attendance decreased 12.2% during the first quarter of fiscal 2020 compared to the first quarter of fiscal 2019. Excluding the acquired and newly-built Movie Tavern theatres, comparable theatre attendance decreased 19.5% during the quarter, due primarily to a weaker early March 2020 film slate compared to the prior year and the fact that we closed all of our theatres in mid-March in response to the COVID-19 pandemic. Attendance at comparable theatres increased significantly during January, decreased in February, and was declining during the first half of March prior to our theatre closures due to the fact that last year’s top film during the quarter, ~~Captain Marvel~~~~, was released during March 2019. January 2020 benefited from strong 2019 holdover films such as~~ ~~Star Wars: The Rise of Skywalker~~ ~~and~~ ~~Jumanji~~: ~~The Next Level~~.

~~Our highest grossing films during the fiscal 2020 first quarter included~~ ~~Star Wars: The Rise of Skywalker~~, ~~Bad Boys for Life~~, ~~Jumanji: The Next Level~~, ~~1917~~ ~~and~~ ~~Sonic the Hedgehog~~~~. We believe our theatre circuit outperformed on all four of our top films during the quarter. The~~ film slate during ~~the first~~such quarter ~~of fiscal 2020~~ was weighted more towards ~~blockbuster~~our top movies compared to the prior year, as evidenced by the fact that our top five films during our fiscal ~~2020~~2021 first quarter accounted for ~~46%~~59% of our total box office results, compared to ~~39%~~47% for the top five films during the first quarter of fiscal ~~2019,~~2020, both expressed as a percentage of the total admission revenues for the period. ~~This~~In prior years, an increased reliance on ~~blockbuster~~fewer films during ~~the fiscal 2020 first~~a given quarter has had the effect of slightly increasing our film rental costs during the period, as generally the better a particular film performs, the greater the film rental cost tends to be as a percentage of box office receipts. This was not the case during the first quarter of fiscal 2021, however, due to reduced overall admission revenues reported for each film. As a result, our overall film rental cost decreased during the fiscal 2021 first quarter compared to the same period last year.

Our average ticket price increased 3.7% during the first quarter of fiscal 2021 compared to the first quarter of fiscal 2020. A larger proportion of admission revenues from our proprietary premium large format (“PLF”) screens (with a higher ticket price) and the increase in MPC events contributed to our increase in our average ticket price during the fiscal 2021 period, partially offset by the fact that we continued to offer older “library” film product for only $5.00 per ticket during the first quarter of fiscal 2021.

Our average concession revenues per person increased by 16.0% during the first quarter of fiscal 2021 compared to the first quarter of fiscal 2020. Our top three films during the first quarter of fiscal 2021 were animated films that generally appeal to a younger audience and we believe that resulted in an increase in sales of traditional concession items like popcorn, soda and candy, contributing to our increased average concession sales per person. In addition, a portion of the increase in our average concession revenues per person during the first quarter of fiscal 2021 may be attributed to shorter lines at our concession stand due to reduced attendance (during periods of high attendance, some customers do not purchase concessions because the line is too long). We also believe that an increased percentage of customers buying their concessions in advance using our website or our mobile app likely also contributed to higher average concession revenues per person, as our experience has shown that customers are more likely to purchase more items when they order and pay electronically.

Other revenues decreased by approximately $5.8 million during the first quarter of fiscal 2021 compared to the first quarter of fiscal 2020. This decrease was primarily due to the impact of reduced attendance on internet surcharge ticketing fees and preshow advertising income.

The film product release schedule for the remainder of fiscal ~~2020~~2021 has been changing in response to ~~the closure of nearly 100% of the movie theatres~~reduced near-term customer demand and changing state and local restrictions in various key markets in the U.S. Asand the world as a result of the ~~date of this report, the~~ongoing COVID-19 pandemic. With restrictions in New York and California lessening, film studios have ~~postponed~~shown an increased willingness to begin releasing many of the ~~majority~~new films that had previously been delayed. Godzilla vs. Kong was released on March 31, 2021 and has performed beyond expectations, becoming the best performing film released since the onset of ~~their~~the pandemic. Additional films that have contributed to our early fiscal 2021 second quarter results include Mortal Kombat and Demon Slayer and new films scheduled ~~releases~~to be released during ~~our fiscal 2020~~the remainder of the second ~~quarter. Beginning in July 2020, however,~~quarter include Cruella, Quiet Place Part II, Conjuring: The Devil Made Me Do It, In the Heights and Fast & Furious 9. We believe that as a greater percentage of the population gets vaccinated and the pandemic continues to subside, there ~~are~~will be a large demand for out-of-home entertainment and the studios will once again begin releasing a significant number of films to theatres, particularly during the second half of fiscal 2021. The list of films scheduled to be released during the second half of fiscal 2021 appears quite strong, as does the ~~year that may generate substantial box office interest, including multiple~~list of films ~~that were originally scheduled for the first half of fiscal 2020. Films~~ currently scheduled for release during ~~the second half of~~ fiscal ~~2020 include~~ Tenet, Mulan, The SpongeBob Movie: Sponge on the Run, Wonder Woman 1984, The Quiet Place Part II, The Conjuring: The Devil Made Me Do It, Halloween Kills, Black Widow, Godzila vs. Kong, Soul, No Time to Die, Free Guy, West Side Story, Coming 2 America, Dune, The Croods 2 ~~and~~ ~~Top Gun: Maverick.~~ ~~The anticipated film slate for 2021, which will also now include several films originally scheduled for 2020, is currently expected to be very strong.~~ 2022.

Revenues for the theatre business and the motion picture industry in general are heavily dependent on the general audience appeal of available films, together with studio marketing, advertising and support campaigns and the maintenance of the current “windows” between the date a film is released in theatres and the date a motion picture is released to other channels, including premium video-on-demand (“PVOD”), video on-demand (“VOD”), streaming services and DVD. These are factors over which we have no control.

We ended the first quarter of fiscal ~~2020~~2021 with a total of ~~1,104~~1,091 company-owned screens in 9088 theatres and six managed screens in one theatre, compared to ~~1,092~~1,104 company-owned screens in 8990 theatres and six managed screens in one theatre at the end of the first quarter of fiscal 2019. We opened a new eight-screen Movie Tavern by Marcus theatre in Brookfield, Wisconsin early in our fiscal 2019 fourth quarter and added four new screens to an existing Movie Tavern theatre during2020. As of the date of this report, we had reopened several additional theatres since the end of the first quarter of fiscal ~~2020.~~2021, bringing our number of open theatres to approximately 89% of our total theatres. We ~~also~~currently expect to open the majority of our remaining closed theatres by the end of May 2021. One of the Marcus Wehrenberg theatres that we reopened in May 2021 recently completed ~~the addition of DreamLounger~~^SM ~~recliner seating and~~a renovation that added ~~a new~~ ~~Super~~Screen DLX® to that same Movie Tavern theatre during the first quarter of fiscal 2020. During the first quarter of fiscal 2020, we began projects that would add DreamLounger recliner seating to another Movie Tavern theatre and add DreamLounger recliner seating, as well as Reel Sizzle^® and Take Five^SM Lounge outlets, to ~~a Marcus Wehrenberg theatre, but those projects have temporarily been put on hold as a result of~~ the ~~COVID-19 pandemic. We also have temporarily stopped construction of a new nine-screen theatre in Tacoma, Washington. We currently expect to restart these projects when conditions warrant.~~ theatre.

Hotels and Resorts

The following table sets forth revenues, operating loss and operating margin for our hotels and resorts division for the first quarter of fiscal ~~2020~~2021 and fiscal ~~2019~~2020 (in millions, except for variance percentage and operating margin):

First Quarter

Variance


F2020

F2019

Amt.

Pct.

Revenues

$
50.2

$
55.1

$
(4.9)

(8.9)
%
Operating loss

(10.9)

(3.2)

(7.7)

(244.2)
%
Operating margin (% of revenues)

(21.6)
%

(5.7)
%





First Quarter

Variance


F2021

F2020

Amt.

Pct.

Revenues

$
28.1

$
50.2

$
(22.1)

(43.9)
%
Operating loss

(5.7)

(10.9)

5.2

47.4
%
Operating margin (% of revenues)

(20.3)
%

(21.6)
%

The following table provides a further breakdown of the components of revenues for the hotels and resorts division for the first quarter of fiscal ~~2020~~2021 and fiscal ~~2019~~2020 (in millions, except for variance percentage):

First Quarter

Variance


F2020

F2019

Amt.

Pct.

Room revenues

$
17.0

$
18.9

$
(1.9)

(10.3)
%
Food and beverage revenues

13.6

15.8

(2.2)

(13.7)
%
Other revenues

11.0

12.2

(1.2)

(9.7)
%

41.6

46.9

(5.3)

(11.3)
%
Cost reimbursements

8.6

8.2

0.4

(4.9)
%
   Total revenues

$
50.2

$
55.1

$
(4.9)

(8.9)
%

First Quarter

Variance


F2021

F2020

Amt.

Pct.

Room revenues

$
9.0

$
17.0

$
(8.0)

(46.8)
%
Food and beverage revenues

5.9

13.6

(7.7)

(56.6)
%
Other revenues

9.9

11.0

(1.1)

(10.1)
%

24.8

41.6

(16.8)

(40.3)
%
Cost reimbursements

3.3

8.6

(5.3)

(61.6)
%
Total revenues

$
28.1

$
50.2

$
(22.1)

(43.9)
%

Our first quarter is typically the weakest quarter of our fiscal year for our hotels and resorts division due to the traditionally reduced level of travel at our predominantly Midwestern portfolio of owned properties. Division revenues decreased significantly during the first quarter of fiscal ~~2020~~2021 compared to the first quarter of fiscal ~~2019 due entirely to COVID-19 related cancellations in March 2020. In addition,~~2020 due to ~~extremely low occupancy rates, we closed five~~the impact of the COVID-19 pandemic. All eight of our ~~eight~~ company-owned hotels and ~~resorts on March 24, 2020, further reducing revenues~~all but one of our managed hotels were open during the fiscal 2020 first quarter. Last year, we closed the former InterContinental Milwaukee hotel during the first week of January to begin a major renovation that converted this hotel into the Saint Kate. Excluding this hotel, total revenues during theour first quarter of fiscal ~~2020 decreased by 12.2%~~2021, but the majority of these properties were generating significantly reduced revenues as compared to prior years. Our two SafeHouse restaurants and bars remain temporarily closed, but the ~~first quarter~~majority of ~~fiscal 2019.~~

Room revenues decreased during the first quarter of fiscal 2020 compared to the first quarter of fiscal 2019 due to COVID-19 related cancellations during March 2020 and the closure of five company-owned hotels and resorts for the final two days of the quarter, partially offset by room revenues from the Saint Kate, which was not open last year during the first quarter. Excluding the Saint Kate, room revenues during the first quarter of fiscal 2020 decreased by 14.4% compared to the first quarter of fiscal 2019. Food and beverage revenues decreased during the first quarter of fiscal 2020 compared to the first quarter of fiscal 2019 due to the loss of March banquet and catering revenues as groups cancelled due to the COVID-19 pandemic. In addition, our restaurants and bars in our hotels and resorts were ~~required to close~~open during the ~~last 10 days of the~~ fiscal ~~2020 quarter due to the COVID-19 pandemic. Excluding the Saint Kate, food and beverage revenues during the~~2021 first quarter, ~~of fiscal 2020 decreased by 19.8% compared to the first quarter of fiscal 2019.~~ operating under applicable state and local restrictions and guidelines, and in some cases reduced operating hours.

Other revenues decreased due primarily to reduced revenues from one of our condo hotels and decreased management ~~fees.~~fees, partially offset by significantly increased ski revenues at our Grand Geneva^® Resort & Spa (“Grand Geneva”). Cost reimbursements ~~increased~~decreased during the first quarter of fiscal ~~2020~~2021 compared to the first quarter of fiscal ~~2019~~2020 due to reduced revenues and subsequent operating costs at our managed hotels.

Despite the ~~addition of a new large management contract last year.~~

~~Our hotels and resorts~~decrease in revenues, our division operating loss ~~increased and operating margin declined~~improved significantly during ~~our~~the first quarter of fiscal ~~2020 first quarter~~2021 compared to the first quarter of fiscal ~~2019 due primarily to the impact of the revenue losses described above. In addition, our~~2020. Our hotels and resorts division operating loss during the first quarter of fiscal 2020 was negatively impacted by nonrecurring expenses totaling approximately $2.7 million related to expenses incurred (primarily payroll continuation payments to employees temporarily laid off) due to the closing of five of our eight company-owned hotels and resorts for the final two days of such quarter. In addition, our restaurants and bars were required to close during the ~~quarter. Our operating loss during~~last 10 days of the fiscal 2020 first quarter due to the COVID-19 pandemic. Improved operating performance at the Grand Geneva and strong cost controls at all of our properties also contributed to the improved fiscal ~~2019 was negatively impacted by approximately $1.2 million of preopening expenses related to our conversion of the InterContinental Milwaukee hotel into the Saint Kate.~~ 2021 first quarter operating loss.

The following table sets forth certain operating statistics for the first quarter of fiscal ~~2020~~2021 and fiscal ~~2019,~~2020, including our average occupancy percentage (number of occupied rooms as a percentage of available rooms), our average daily room rate, or ADR, and our total revenue per available room, or RevPAR, for company-owned properties:

First Quarter⁽¹⁾

Variance


F2020

F2019

Amt.

Pct.

Occupancy percentage

55.6
%

64.6
%

(9.0)
pts
(13.9)
%
ADR

$
129.20

$
130.05

$
(0.85)

(0.7)
%
RevPAR

$
71.84

$
84.05

$
(12.21)

(14.5)
%

~~(1)~~ These operating statistics represent averages of our seven distinct comparable company-owned hotels and resorts, branded and unbranded, in different geographic markets with a wide range of individual hotel performance. The statistics are not necessarily representative of any particular hotel or resort. The statistics exclude the Saint Kate, which was closed last year during the first quarter.

First Quarter⁽¹⁾

Variance


F2021

F2020

Amt.

Pct.

Occupancy percentage

28.3
%

54.2
%

(25.9)
pts
(47.8)
%
ADR

$
133.12

$
129.71

$
3.41

2.6
%
RevPAR

$
37.66

$
70.26

$
(32.60)

(46.4)
%

(1)These operating statistics represent averages of our eight distinct comparable company-owned hotels and resorts, branded and unbranded, in different geographic markets with a wide range of individual hotel performance. The statistics are not necessarily representative of any particular hotel or resort. The statistics exclude days where individual hotels may have been closed.
RevPAR decreased at ~~six~~seven of our ~~seven comparable~~eight company-owned properties during the first quarter of fiscal ~~2020~~2021 compared to the first quarter of fiscal ~~2019. Our Hilton Madison hotel experienced an increase in RevPAR because it was undergoing a major renovation during~~2020. The “drive-to leisure” travel customer provided the ~~fiscal 2019 first quarter. Excluding the Hilton Madison hotel, our remaining six comparable company-owned hotels experienced a RevPAR decrease of 17.5%~~most demand during the first quarter of fiscal ~~2020 compared~~2021, with the Grand Geneva and a managed condo hotel, the Timber Ridge Lodge & Waterpark, experiencing the highest demand among our open hotels, particularly on weekends. A record ski season also contributed to an increase in RevPAR at the ~~prior year period.~~Grand Geneva. According to data received from Smith Travel Research and compiled by us in order to evaluate our fiscal ~~2020~~2021 first quarter results, comparable “upper upscale” hotels throughout the United States experienced a decrease in RevPAR of ~~20.9%~~54.5% during our fiscal ~~2020~~2021 first quarter compared to the same weeks last year. Data received from Smith Travel Research for our various “competitive sets” – hotels identified in our specific markets that we deem to be competitors to our hotels – indicates that these hotels experienced a decrease in RevPAR of ~~25.1%~~52.3% during our fiscal ~~2020~~2021 first quarter. Thus, we believe we outperformed the industry and our competitive sets during the fiscal ~~2020~~2021 first ~~quarter.~~quarter by approximately eight and six points, respectively. Higher class segments of the hotel industry, such as luxury and upper upscale, continue to experience lower occupancies compared to lower class hotel segments such as economy and midscale.
A decline in transient and group business contributed significantly to our reduced revenues during the first quarter of fiscal ~~2020~~2021 compared to the first quarter of fiscal ~~2019, as groups were among the first customer segments to begin cancelling as COVID-19 pandemic concerns grew. As described above, a~~2020. A decrease in group business subsequently led to a corresponding decrease in banquet and catering revenues, negatively impacting our reported food and beverage revenues. ~~Although cancellations significantly impacted~~Conversely, our ~~occupancy rates during the first quarter, our comparable~~ ADR ~~decreased only slightly~~increased during the first quarter of fiscal 2020 compared to the prior year quarter. Two of our seven comparable company-owned hotels (including the Hilton Madison hotel, but excluding the Saint Kate) reported increased ADR during the fiscal 2020 first quarter2021 compared to the first quarter of fiscal ~~2019.~~2020 due primarily to increased ADR at the Grand Geneva. It is generally more difficult to increase ADR during our slower winter season, as overall occupancy is at its lowest.

~~Early in our fiscal 2020 second quarter, we closed our remaining three company-owned hotels.~~ 26

Looking to future periods, ~~our~~overall occupancy in the U.S. has slowly increased since the initial onset of the COVID-19 pandemic in March 2020. In the near term, we expect most current demand will continue to come from the drive-to leisure segment. Most organizations implemented travel bans at the onset of the pandemic and are currently only allowing essential travel, which will likely limit business travel in the near term. Our company-owned hotels have experienced a significant decrease in group bookings ~~for the second quarter of fiscal 2020~~ compared to the same period ~~last year.~~in prior years. As of the date of this report, our group room revenue bookings for ~~the second half of~~ fiscal ~~2020~~2021 - commonly referred to in the hotels and resorts industry as “group pace” - is running slightly behind our group room revenue bookings for the second half last year at this time and it is possible group pace may worsen if we receive additional cancellations in the coming months. Group pace for fiscal 2021 is currently runningsignificantly behind where we ~~were last year~~would historically be at this same time in prior years, but we are beginning to experience increased booking activity for ~~fiscal 2020.~~later in 2021 and particularly for 2022 and beyond. Banquet and catering revenue pace for ~~the second half of~~ fiscal ~~2020~~2021 is ~~currently about even with~~also running behind where we ~~were last year~~would typically be at this same time ~~and is slightly ahead~~in prior years, but not as much as group room revenues, due in part to increases in wedding bookings. Many of our cancelled group bookings due to COVID-19 are re-booking for ~~fiscal 2021 compared to where we were last year at this time~~future dates, excluding one-time events that could not rebook for ~~fiscal 2020.~~future dates.

Forecasting what future RevPAR growth or decline will be ~~when our hotels reopen~~during the next 18 to 24 months is very difficult at this time. The non-group booking window is very short, with most bookings occurring within three days of arrival, making even short-term forecasts of future RevPAR growth very difficult. Hotel revenues have historically tracked very closely with traditional macroeconomic statistics such as the Gross Domestic Product, so we will be monitoring the economic environment ~~very~~ closely. After past shocks to the system, such as 9/the terrorist attacks on September 11, 2001 and the 2008 financial crisis, hotel demand took longer to recover than other components of the economy. Conversely, we now anticipate that hotel supply growth will be limited for the foreseeable future, which can be beneficial for our existing hotels. AsMost industry experts believe the pace of recovery will be steady, but relatively slow. We are encouraged by the ~~date~~demand from drive-to leisure customers during the first quarter of ~~this report, it was still uncertain what it~~fiscal 2021, which exceeded our expectations. We will ~~look like when Milwaukee hosts~~continue to focus on reaching the Democratic National Convention in August 2020 (moved from July 2020). The status of the Ryder Cup in September 2020, which is scheduled to be held approximately one hour north of Milwaukee, is also uncertain at this time.drive-to leisure market through aggressive campaigns promoting creative packages for our guests. Overall, we generally expect our revenue trends to track or exceed the overall industry trends for our segment of the industry, particularly in our respective markets.

Our hotels and resorts division operating results during the first quarter of fiscal 2020 benefited from a new management contract added during fiscal 2019 – the 468-room Hyatt Regency Schaumburg hotel in Schaumburg, Illinois. Conversely, we ceased management of the Heidel House Resort & Spa in Green Lake, Wisconsin and the Sheraton Chapel Hill Hotel in Chapel Hill, North Carolina, during fiscal 2019, partially offsetting the impact of the new contract. All of our managed hotels closed early in our fiscal 2020 second quarter due to extremely low occupancy as a result of the COVID-19 pandemic. In addition, early in our fiscal 2020 second quarter, we ceased management of the Hilton Garden Inn Houston NW/Willowbrook in Houston, Texas.

During our fiscal 2020 first quarter, Michael R. Evans joined us as the new president of Marcus® Hotels & Resorts. Mr. Evans is a proven lodging industry executive with more than 20 years of experience in the hospitality industry with companies such as Marriott International, Inc. and MGM Resorts International. We believe that Mr. Evans’ proven development, operating and leadership experience and strong roots in the hospitality industry make him extremely qualified to build on our hotels and resorts division’s long history of success.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity

Our movie theatre and hotels and resorts businesses, when open and operating normally, each generate significant and consistent daily amounts of cash, subject to previously-noted seasonality, because each segment’s revenue is derived predominantly from consumer cash purchases. Under normal circumstances, we believe that these relatively consistent and predictable cash sources, as well as the availability of unused credit lines, would be adequate to support the ongoing operational liquidity needs of our businesses. A detailed description of our liquidity situation as of ~~March 26, 2020~~April 1, 2021 is described in detail above in the “Impact of the COVID-19 Pandemic” section of this MD&A.

We and several banks are party to the Credit Agreement, which provides for a revolving credit facility that matures on January 9, 2025, with an initial maximum aggregate amount of availability of $225 million. On April 29, 2020, we entered into the Amendment to our Credit Agreement.

The Amendment amends the Credit Agreement to provide for an initial $90.8 million term loan facility that matures on April 28, 2021. The term loan facility may be increased by our company from time to time prior to 180 days after April 29, 2020 up to an aggregate amount of $100 million, provided that certain conditions are satisfied, including the consent of each lender participating in such increase. We will use borrowings under the term loan facility to pay down revolving loans, to pay costs and expenses related to the Amendment, and for general corporate purposes.

Borrowings under the Credit Agreement bear interest at a variable rate equal to: (i) LIBOR, subject to a 1% floor, plus a specified margin; or (ii) the base rate (which is the highest of (a) the prime rate, (b) the greater of the federal funds rate and the overnight bank funding rate plus 0.50% or (c) the sum of 1% plus one-month LIBOR plus a specified margin based upon our consolidated debt to capitalization ratio as of the most recent determination date. Pursuant to the Amendment, as of April 29, 2020: (A) in respect of revolving loans, (1) our company is charged a facility fee equal to 0.40% of the total revolving credit facility commitment and (2) the specified margin is 2.1% for LIBOR borrowings and 1.1% for ABR borrowings, which specified margin will remain in effect until the end of the first fiscal quarter ending after the end of any period in which any portion of the term loan facility remains outstanding or the testing of any financial covenant in the Credit Agreement is suspended (the “Specified Period”); and (B) in respect of term loans, the specified margin is 2.5% for LIBOR borrowings and 1.5% for ABR borrowings, in each case, at all times.

The Amendment also amends the Credit Agreement to modify various restrictions and covenants applicable to our company and certain of our subsidiaries. Among other modifications, the Amendment amends the Credit Agreement to include restrictions on our ability and certain of our subsidiaries to incur additional indebtedness, pay dividends and other distributions, and make voluntary prepayments on or defeasance of our 4.02% Senior Notes due August 2025 and 4.32% Senior Notes due February 2027. Further, the Amendment amends the Credit Agreement to: (i) suspend testing of the minimum consolidated fixed charge coverage ratio of 3.0 to 1.0 until the earlier to occur of (a) the end of our fiscal third quarter in 2021 and (b) the last day of our fiscal quarter in which we provide notice to the administrative agent that we are reinstating the testing of such ratio; (ii) add a covenant requiring our consolidated EBITDA to be greater than (a) negative $57 million as of June 25, 2020 for the fiscal quarter then ending, (b) negative $90 million as of September 24, 2020 for the two consecutive fiscal quarters then ending, (c) negative $65 million as of December 31, 2020 for the three consecutive fiscal quarters then ending, (d) negative $40 million as of April 1, 2021 for the four consecutive fiscal quarters then ending, and (e) $42 million as of July 1, 2021 for the four consecutive fiscal quarters then ending; (iii) add a covenant requiring our consolidated liquidity to be greater than (a) $102 million as of June 25, 2020, (b) $67 million as of September 24, 2020, (c) $78.5 million as of December 31, 2020, (d) $83 million as of April 1, 2021, and (e) $103.5 million as of July 1, 2021, which minimum liquidity amounts will be reduced by $50 million for each such testing date if the term loans are paid in full as of such date; and (iv) add a covenant prohibiting our company and certain of our subsidiaries from incurring or making capital expenditures, in the aggregate for our company and such subsidiaries, (a) during the period from April 1, 2020 through December 31, 2020, in excess of $22.5 million plus certain adjustments, or (b) during our 2021 fiscal year, in excess of $50 million plus certain adjustments.

Pursuant to the Amendment, we are required to apply net cash proceeds received from certain events, including certain asset dispositions, casualty losses, condemnations, equity issuances, capital contributions, and the incurrence of certain debt, to prepay outstanding term loans. In addition, if, at any time during the Specified Period our company and certain of our subsidiaries’ aggregate unrestricted cash on hand exceeds $125 million, the Amendment requires us to prepay revolving loans under the Credit Agreement by the amount of such excess, without a corresponding reduction in the revolving commitments under the Credit Agreement.

In connection with the Amendment: (i) our company and certain of our subsidiaries pledged, subject to certain exceptions, security interests and liens in and on (a) substantially all of their respective personal property assets and (b) certain of their respective real property assets, in each case, to secure the Credit Agreement and related obligations; and (ii) certain subsidiaries of the Company have guaranteed our obligations under the Credit Agreement. The foregoing security interests, liens and guaranties will remain in effect until the Collateral Release Date (as defined in the Amendment).

The Credit Agreement contains customary events of default. If an event of default under the Credit Agreement occurs and is continuing, then, among other things, the lenders may declare any outstanding obligations under the Credit Agreement to be immediately due and payable and exercise rights and remedies against the pledged collateral.

On April 29, 2020, our company and certain purchasers entered into amendments (the “Note Amendments”) to the Note Purchase Agreement, dated June 27, 2013, and the Note Purchase Agreement, dated December 21, 2016 (collectively, the “Note Purchase Agreements”). Pursuant to the Note Purchase Agreements, we previously issued and sold $50 million in aggregate principal amount of our 4.02% Senior Notes due August 2025 and $50 million in aggregate principal amount of our 4.32% Senior Notes due February 2027 (collectively, the “Notes”) in private placements exempt from the registration requirements of the Securities Act of 1933, as amended.

The Note Amendments amend certain covenants and other terms of the Note Purchase Agreements to: (i) suspend testing of the consolidated fixed charge coverage ratio of 2.50 to 1.0 until the earlier to occur of (a) the end of our fiscal third quarter in 2021 and (b) the last day of our fiscal quarter in which we provide notice to the administrative agent that we are reinstating the testing of such ratio; (ii) add a covenant requiring our consolidated EBITDA to be greater than (a) negative $57 million as of June 25, 2020 for the fiscal quarter then ending, (b) negative $90 million as of September 24, 2020 for the two consecutive fiscal quarters then ending, (c) negative $65 million as of December 31, 2020 for the three consecutive fiscal quarters then ending, (d) negative $40 million as of April 1, 2021 for the four consecutive fiscal quarters then ending, and (e) $42 million as of July 1, 2021 for the four consecutive fiscal quarters then ending; (iii) add a covenant requiring our consolidated liquidity to be greater than (a) $102 million as of June 25, 2020, (b) $67 million as of September 24, 2020, (c) $78.5 million as of December 31, 2020, (d) $83 million as of April 1, 2021, and (e) $103.5 million as of July 1, 2021, which minimum liquidity amounts will be reduced by $50 million for each such testing date if the term loans under the Credit Agreement are paid in full as of such date; and (iv) add a covenant prohibiting our company and certain of our subsidiaries from incurring or making capital expenditures, in the aggregate for our company and such subsidiaries, (a) during the period from April 1, 2020 through December 31, 2020, in excess of $22.5 million plus certain adjustments, or (b) during our 2021 fiscal year, in excess of $50 million plus certain adjustments.

Additionally, from April 29, 2020 until the last day of the first fiscal quarter ending after the Collateral Release Date (as defined in the Note Amendments), we are required to pay a fee to each Note holder in an amount equal to 0.725% of the aggregate principal amount of Notes held by such holder. Such fee is payable quarterly (0.18125% of the aggregate principal amount of the Notes per quarter) commencing with the fiscal quarter ending June 25, 2020.

In connection with the Note Amendments: (i) our company and certain of our subsidiaries have pledged, subject to certain exceptions, security interests and liens in and on (a) substantially all of their respective personal property assets and (b) certain of their respective real property assets, in each case, to secure the Notes and related obligations; and (ii) certain subsidiaries of our have guaranteed our obligations under the Note Purchase Agreements and the Notes. The foregoing security interests, liens and guaranties will remain in effect until the Collateral Release Date.

The Note Purchase Agreements contain customary events of default. If an event of default under the Note Purchase Agreements occurs and is continuing, then, among other things, all Notes then outstanding become immediately due and payable and the Note holders may exercise their rights and remedies against the pledged collateral.

We believe that the actions ~~that~~we have ~~been~~ taken over the past year will allow us to have sufficient liquidity to meet our obligations as they come due and to comply with our debt covenants for at least 12 months from the issuance date of the consolidated financial statements. However, future compliance with our debt covenants could be impacted if we are unable to resume operations as currently expected, which could be impacted by matters that are not entirely in our control, such as the continuation of protective actions that federal, state and local governments have taken and the timing of new movie releases (as described in the Impact of the COVID-19 Pandemic section of this MD&A and in our Annual Report for the year ended December 31, 2020). Future compliance with our debt covenants could also be impacted if the speed of recovery of our theatres and hotels and resorts businesses is slower than currently expected. For example, our current expectations are that our theatre division will improve during the fiscal 2021 second quarter (but still report results materially below fiscal 2019), before beginning to progressively return to closer-to-normal performance during the second half of fiscal 2021 and first quarter of fiscal 2022. Our current expectations for our hotels and resorts division are that we will continue to show improvement in each succeeding quarter compared to our current state, but continue to underperform compared to prior years. We do not expect to return to pre-COVID-19 occupancy levels during fiscal 2021. Even if one or both of our divisions progressively return to closer-to-normal performance and operations in the second half of fiscal 2021, it is possible that the impact of COVID-19 may be greater than currently expected across one or both of our divisions such that we may be unable to comply with our debt covenants. In such an event, we would either seek covenant waivers or attempt to amend our covenants, though there is no certainty that we would be successful in such efforts.

Financial Condition

Net cash used in operating activities totaled $13.0 million during the first quarter of fiscal 2021, compared to $16.6 million during the first quarter of fiscal ~~2020, compared to net cash provided by operating activities of $8.0 million during the first quarter of the fiscal 2019.~~2020. The ~~$24.6~~$3.6 million decrease in net cash ~~provided by~~used in operating activities was due primarily to ~~reduced net earnings and the unfavorable timing in the payment of accounts payable and payment of income taxes, partially offset by~~ the favorable timing in the collection of government grant receivables and refundable income taxes and payment of accounts ~~receivable~~payable and other accrued liabilities, partially offset by increased net loss and deferred income taxes during the first quarter of fiscal ~~2020.~~2021.

Net cash ~~used in~~provided by investing activities during the first quarter of fiscal ~~2020~~2021 totaled ~~$10.2~~$2.6 million, compared ~~to $46.1~~net cash used in investing activities of $10.2 million during the first quarter of fiscal ~~2019.~~2020. The ~~decrease~~increase in net cash ~~used in~~provided by investing activities of ~~$35.9~~$12.8 million was primarily the result of a decrease in capital expenditures and the ~~$29.6~~receipt of $4.3 million ~~cash consideration~~ in ~~the Movie Tavern Acquisition~~proceeds from disposals of property, equipment and other assets during the first quarter of fiscal 2019. We did not incur any acquisition-related capital expenditures during the first quarter of fiscal 2020. A decrease in capital expenditures also contributed to the decrease in net cash used in investing activities during the first quarter of fiscal 2020 compared to the first quarter of fiscal 2019.2021. Total cash capital expenditures (including normal continuing capital maintenance and renovation projects) totaled $1.5 million during the first quarter of fiscal 2021 compared to $10.0 million during the first quarter of fiscal ~~2020 compared to $13.7 million~~2020.

Fiscal 2021 first quarter cash capital expenditures included approximately $800,000 incurred in our theatre division, including costs associated with the renovation of a theatre. We also incurred capital expenditures in our hotels and resorts division during the first quarter of fiscal ~~2019.~~

2021 of approximately $700,000, including costs related to a lobby renovation at the Grand Geneva. Fiscal 2020 first quarter cash capital expenditures included approximately $7.2 million incurred in our theatre division, including costs associated with the addition of four new screens, DreamLounger recliner seating and a SuperScreen DLX auditorium at an existing Movie Tavern theatre. ~~We also~~Also during the first quarter of fiscal 2020, we began projects to add DreamLounger recliner seating, as well as Reel Sizzle and Take Five Lounge outlets, to an existing Marcus Wehrenberg theatre and DreamLounger recliner seating to an existing Movie Tavern theatre. We also incurred capital expenditures in our hotels and resorts division during the first quarter of fiscal 2020 of approximately $2.4 million, consisting primarily of normal maintenance capital projects. Fiscal 2019 first quarter cash capital expenditures included approximately $4.9 million incurred in our theatre division, including costs associated with the addition of DreamLounger recliner seating and new ~~UltraS~~~~creen and~~ ~~Super~~Screen DLX auditoriums to existing theatres. We also incurred capital expenditures in our hotels and resorts division during the first quarter of fiscal 2019 of approximately $8.6 million, consisting primarily of costs associated with the conversion of the Saint Kate and renovation of the Hilton Madison hotel, as well as normal maintenance capital projects at our other properties.

Net cash provided by financing activities during the first quarter of fiscal ~~2020~~2021 totaled ~~$132.4~~$9.2 million compared to ~~$29.4~~$132.4 million during the first quarter of fiscal ~~2019.~~2020. During the first quarter of fiscal 2021, we increased our borrowings under our revolving credit facility as needed to fund our cash needs and used excess cash to reduce our borrowings under our revolving credit facility. As ~~described above,~~short-term revolving credit facility borrowings became due, we replaced them as necessary with new short-term revolving credit facility borrowings. As a result, we added $36.0 million of new short-term revolving credit facility borrowings, and we made $22.0 million of repayments on short-term revolving credit facility borrowings during the first quarter of fiscal 2021 (net increase in borrowings on our credit facility of $14.0 million). During the first quarter of fiscal 2020, at the onset of the pandemic, we drew down on the full amount available under our revolving credit facility ~~during the first quarter of fiscal 2020~~ (after taking into consideration outstanding letters of credit that reduce revolver availability). As a result, we added $188.0 million of new short-term revolving credit facility borrowings, and we made $49.0 million of repayments on short-term revolving credit facility borrowings during the first quarter of fiscal 2020 (net increase in borrowings on our credit facility of $139.0 million). During fiscal 2019, we used excess cash during the first quarter to reduce our borrowings under our revolving credit facility. As short-term borrowings became due, we replaced them as necessary with new short-term borrowings. During the fiscal 2019 first quarter, we also used borrowings from our revolving credit facility to fund the cash consideration in the Movie Tavern Acquisition. As a result, we added $73.0 million of new short-term borrowings, and we made $38.0 million of repayments on short-term borrowings during the first quarter of fiscal 2019 (net increase in borrowings on our credit facility of $35.0 million).

We did not issue any new long-term debt during the first quarters of fiscal ~~2020~~2021 and fiscal 2019. As described above, we did incur $90.8 million of new debt early in our fiscal 2020 second quarter, the majority of which was used to repay existing borrowings under our revolving credit facility.2020. Principal payments on long-term debt were $93,000 during the first quarter of fiscal 2021 compared to payments of $177,000 during the first quarter of fiscal ~~2020 compared to payments of $217,000 during the first quarter of fiscal 2019.~~2020. Our debt-to-capitalization ratio (excluding our finance and operating lease obligations) was 0.41 at April 1, 2021, compared to 0.37 at ~~March 26, 2020, compared~~December 31, 2020. A change in the accounting for our convertible senior notes (described in Note 1 of the condensed notes to ~~0.26 at December 26, 2019.~~ our consolidated financial statements included in this quarterly report on Form 10Q above) contributed to the increase in our debt-to-capitalization ratio.

We repurchased approximately 54,000 shares of our common stock for approximately $1.2 million in conjunction with the exercise of stock options and the payment of income taxes on vested restricted stock during the first quarter of fiscal 2021, compared to approximately 8,600 shares of our common stock for approximately $274,000 in conjunction with the payment of income taxes on vested restricted stock during the first quarter of fiscal ~~2020, compared to 11,000 shares repurchased for approximately $428,000 in conjunction with the exercise of stock options during the first quarter of fiscal 2019.~~2020. As of ~~March 26, 2020,~~April 1, 2021, approximately 2.7 million shares remained available for repurchase under prior Board of Directors repurchase authorizations. ~~We expect that~~Under these authorizations, we ~~will execute any future repurchases on~~may repurchase shares of our common stock from time to time in the open market, ~~or in~~pursuant to privately-negotiated transactions or otherwise, depending upon a number of factors, including prevailing market conditions. ~~As described above, the Amendment~~Our credit agreement, as amended, currently restricts our ability to repurchase shares in the open market until such time as we have paid off the ~~new~~ Term Loan A and returned to compliance with our prior covenants under the ~~Credit Agreement.~~

In conjunction with the Movie Tavern Acquisition, we issued 2,450,000 shares of our common stock to the seller during the first quarter of fiscal 2019. This non-cash transaction reduced treasury stock and increased capital in excess of par by the value of the shares at closing of approximately $109.2 million. credit agreement.

3728

Dividend payments during the first quarter of fiscal 2020 totaled $5.1 ~~million compared to~~million. We did not make any dividend payments ~~of $4.8 million~~ during the first quarter of fiscal ~~2019. The increase in dividend payments was primarily the result of a 6.3% increase in our regular quarterly dividend payment rate initiated in March 2020. As described above, the Amendment~~2021. Our credit agreement, as amended, requires us to temporarily suspend our quarterly dividend payments for the ~~remainder~~first two quarters of ~~2020 and~~fiscal 2021. The credit agreement also limits the total amount of quarterly dividend payments during the ~~first two~~four subsequent quarters beginning with the third quarter of fiscal 2021, unless the Term Loan A is repaid and we are in compliance with prior financial covenants under the ~~Credit Agreement,~~credit agreement, at which point we have the ability to declare quarterly dividend payments as we deem appropriate.

We previously indicated that we expected our full-year fiscal 2020 capital expenditures, (excluding any significant unidentified acquisitions), to be in the $65-$85 million range. As described above, in response to the COVID-19 pandemic and the temporary closure of all of our theatres and hotels, we have temporarily discontinued all non-essential capital expenditures and paused several projects that we had begun during the first quarter of fiscal 2020. The Amendment also restricts the amount of capital expenditures that we may incur during the remainder of fiscal 2020 and first half of fiscal 2021. As a result, we now believe our fiscal 2020 capital expenditures may be in the $20-$30 million range. Once the restrictions on our capital expenditures are removed, the actual timing and extent of the implementation of all of our current expansion plans will depend in large part on industry and general economic conditions, our financial performance and available capital, the competitive environment, evolving customer needs and trends, and the availability of attractive opportunities. It is likely that our plans will continue to evolve and change in response to these and other factors.

~~Critical Accounting Policy Update~~

Goodwill is tested for impairment at a reporting unit level, determined to be at an operating segment level. When reviewing goodwill for impairment, we consider the amount of excess fair value over the carrying value of the reporting unit, the period of time since the last quantitative test, and other factors to determine whether or not to first perform a qualitative test. When performing a qualitative test, we assess numerous factors to determine whether it is more likely than not that the fair value of our reporting unit is less than its carrying value. Examples of qualitative factors that we assess include our share price, our financial performance, market and competitive factors in our industry, and other events specific to the reporting unit. If we conclude that it is more likely than not that the fair value of our reporting unit is less than its carrying value, we perform a quantitative test by comparing the carrying value of the reporting unit to the estimated fair value. Primarily all of our goodwill relates to our theatre segment. Due to the COVID-19 pandemic and the temporary closing of all of our theatre locations, we determined that a triggering event occurred during the 13 weeks ended March 26, 2020 and performed a quantitative analysis. In order to determine fair value, we used assumptions based on information available to us as of March 26, 2020, including both market data and forecasted cash flows. We then used this information to determine fair value and determined that the fair value of our theatre reporting unit exceeded our carrying value by approximately 20% and deemed that no impairment was indicated as of March 26, 2020. If we are unable to achieve our forecasted cash flow or if market conditions worsen, our goodwill could be impaired at a later date.

Item 3. Quantitative and Qualitative Disclosures ~~About~~about Market Risk
We have not experienced any material changes in our market risk exposures since December ~~26, 2019.~~31, 2020.

Item 4. Controls and Procedures
a. Evaluation of disclosure controls and procedures
Based on their evaluations and the evaluation of management, as of the end of the period covered by this Quarterly Report on Form 10-Q, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934 (the “Exchange Act”)) are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.
b. Changes in internal control over financial reporting
There were no significant changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15 of the Exchange Act that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

3829

PART II – OTHER INFORMATION
Item 1A. Risk Factors
There have been no material changes from the risk factors disclosed in the Company’s Annual Report on Form 10-K for the year ended December ~~26, 2019, except for the addition of the risk factors set forth below:~~
The COVID-19 Pandemic Has Had and May Continue to Have Adverse Effects on Our Theatre and Hotels and Resorts Businesses, Results of Operations, Liquidity, Cash Flows, Financial Condition, Access to Credit Markets and Ability to Service Our Existing and Future Indebtedness, Some of Which May be Significant.
The recent outbreak of the COVID-19 pandemic has had an unprecedented impact on the world and both of our business segments. The situation continues to be volatile and the social and economic effects are widespread. As an operator of movie theatres, hotels and resorts, restaurants and bars, each of which consists of spaces where customers and guests gather in close proximity, our businesses are significantly impacted by protective actions that federal, state and local governments have taken to control the spread of the pandemic. These actions include, among other things, declaring national and state emergencies, encouraging social distancing, restricting freedom of movement, mandating non-essential business closures and issuing shelter-in-place, quarantine and stay-at-home orders.
As a result of these measures, we temporarily closed all of our theatres on March 17, 2020, and we currently are not generating any revenues from our theatre operations (other than some limited online sales and curbside sales of popcorn, pizza and other assorted food and beverage items). We also temporarily closed all of our hotel restaurants and bars at approximately the same time and closed five of our eight company-owned hotels and resorts on March 24, 2020 due to a significant reduction in occupancy at those hotels. We announced the closing of our remaining three company-owned hotels on April 8,31, 2020. ~~We currently are not generating any revenues from our hotels and resorts operations.~~
We have also (i) temporarily suspended quarterly dividend payments, (ii) halted all non-essential operating and capital expenditures, (iii) temporarily laid-off the majority of our hourly theatre and hotel associates, in addition to temporarily reducing property management and corporate office staff levels, (iv) temporarily reduced salaries of all remaining employees, including a 50% salary reduction for our chairman and president and CEO, and (iv) taken additional measures to preserve cash and improve liquidity. Additionally, we have sought and received a waiver of our compliance with the consolidated fixed charge coverage ratio covenant in our existing Credit Agreement and all of our senior notes, in each case, until September 2021.
Although we believe the closure of our theatres and hotels is temporary, we cannot predict when the effects of the COVID-19 pandemic will subside or when our businesses will return to normal levels. The longer and more severe the pandemic, including repeat or cyclical outbreaks beyond the one we are currently experiencing, the more severe the adverse effects will be on our businesses, results of operations, liquidity, cash flows, financial condition, access to credit markets and ability to service our existing and future indebtedness.
Even when the COVID-19 pandemic subsides, we cannot guarantee that we will recover as rapidly as other industries. For example, once federal, state and local government restrictions are lifted, it is unclear how quickly patrons will return to our theatres and hotels, which may be a function of continued concerns over safety and/or depressed consumer sentiment due to adverse economic conditions, including job losses, among other things. Even once theatres and hotels are reopened, a single case of COVID-19 in a theatre or hotel could result in additional costs and further closures. If we do not respond appropriately to the pandemic, or if customers do not perceive our response to be adequate, we could suffer damage to our reputation, which could adversely affect our businesses.

Furthermore, the effects of the pandemic on our businesses could be long-lasting and could continue to have adverse effects on our businesses, results of operations, liquidity, cash flows and financial condition, some of which may be significant, and may adversely impact our ability to operate our businesses after our temporary closure ends on the same terms as we conducted business prior to the pandemic. Significant impacts on our businesses caused by the COVID-19 pandemic may include, among others:

●

~~lack of availability of films in the short- or long-term, including as a result of (i) major film distributors releasing scheduled films on alternative channels or (ii) disruptions of film production;~~

●

~~decreased attendance at our theatres after they reopen, including due to (i) continued safety and health concerns or (ii) a change in consumer behavior in favor of alternative forms of entertainment;~~

●

~~reduced travel from our various leisure, business transient and group business customers;~~

●

~~cancellation of major events that were expected to benefit our hotels and resorts division, including the Democratic National Convention in August 2020 and the Ryder Cup in September 2020;~~

●

~~our inability to negotiate favorable rent payment terms with our landlords;~~

●

~~unavailability of employees and/or their inability or unwillingness to conduct work under any revised work environment protocols;~~

●

~~increased risks related to employee matters, including increased employment litigation and claims relating to terminations or furloughs caused by theatre and hotel closures;~~

●

~~reductions and delays to planned operating and capital expenditures;~~

●

~~potential impairment charges;~~

●

our inability to generate significant cash flow from operations if our theatres and/or hotels and resorts continue to experience demand at levels significantly lower than historical levels, which could lead to a substantial increase in indebtedness and negatively impact our ability to comply with the financial covenants, if applicable, in our debt agreements;

●

~~our inability to access lending, capital markets and other sources of liquidity, if needed, on reasonable terms, or at all, or obtain amendments, extensions and waivers;~~

●

~~our inability to effectively meet our short- and long-term obligations; and~~

●

~~our inability to service our existing and future indebtedness.~~

Additionally, although we intend to seek available benefits under the CARES Act, or any subsequent governmental relief bills, we cannot predict the manner in which any benefits under the CARES Act, or any subsequent governmental relief bills, will be allocated or administered and we cannot assure you that we will be able to access such benefits in a timely manner or at all. Accessing these benefits and our response to the COVID-19 pandemic have required our management team to devote extensive resources and are likely to continue to do so in the near future, which negatively affects our ability to implement our business plan and respond to opportunities.

The Duration of the COVID-19 Pandemic and Related Shelter-in-Place and Social Distancing Requirements and the Level of Customer Demand Following the Relaxation of Such Requirements May Adversely Affect Our Financial Results.

As noted above, due to the COVID-19 pandemic, our operations at our theatres and hotels and resorts have been suspended temporarily, and there is uncertainty as to when we will be permitted to reopen our facilities. Because we operate in several different jurisdictions, we may be able to reopen some, but not all, of our theatres and hotels and resorts within a certain timeframe. Our current expectation is that, when we do reopen, we will open to capacity limitations. A reduction in capacity does not necessarily translate to an equal reduction in potential revenues. Reduced capacity may potentially impact attendance on $5 Tuesdays and on opening weekends of major new film releases, but based upon our past experience, we believe that customers will adapt to reduced seat availability by shifting their attendance to different days and times of day. However, fears and concerns regarding the COVID-19 pandemic could cause our customers to avoid assembling in public spaces for some time despite the relaxation of shelter-in-place and social distancing measures. Although we believe we have sufficient resources to fund our operations well into 2021 in the unlikely event that shelter-in-place, stay-at-home and social distancing requirements last substantially beyond the currently mandated closure periods, we have no control over and cannot predict the length of the closure of our theatres and hotels and resorts due to the COVID-19 pandemic. If we are unable to generate revenues due to a prolonged period of closure or experience significant declines in our businesses volumes upon reopening, this would negatively impact our ability to remain in compliance with our debt covenants and meet our payment obligations. In such an event, we would either seek covenant waivers or attempt to amend our covenants, though there is no certainty that we would be successful in such efforts. Additionally, we could seek additional liquidity through the issuance of new debt. Our ability to obtain additional financing and the terms of any such additional financing would depend in part on factors outside of our control.

In addition to the specific risks described above, the COVID-19 pandemic (including federal, state and local governmental responses, broad economic impacts and market disruptions) has heightened the materiality of the other risk factors disclosed in the Company’s Annual Report on Form 10-K for the year ended December 26, 2019.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following table sets forth information with respect to purchases made by us or on our behalf of our Common Stock during the periods indicated. All of these repurchases were made in conjunction with the payment of income taxes on vested restricted stock pursuant to the publicly announced repurchase authorization described below.






Total Number of

Maximum

Shares

Number of

Purchased as

Shares that May

Total Number of

Part of Publicly

Yet be Purchased

Shares

Average Price

Announced

Under the Plans
Period

Purchased

Paid per Share

Programs (1)

or Programs (1)
December 27 - January 30

—

$
—

—

2,756,561
January 31 - February 27

8,551

32.06

8,551

2,748,010
February 28 - March 26

—

—

—

2,748,010
Total

8,551

$
32.06

8,551

2,748,010






Total Number of

Maximum

Shares

Number of

Purchased as

Shares that May

Total Number of

Part of Publicly

Yet be Purchased

Shares

Average Price

Announced

Under the Plans
Period

Purchased

Paid per Share

Programs (1)

or Programs (1)
January 1- January 31

—

$
—

—

2,718,994
February 1- February 28

15,819

17.72

15,819

2,703,175
March 1- April 1

38,620

23.32

38,620

2,664,555
Total

54,439

$
21.69

54,439

2,664,555

(1) Through ~~March 26, 2020,~~April 1, 2021, our Board of Directors had authorized the repurchase of up to approximately 11.7 million shares of our outstanding Common Stock. Under these authorizations, we may repurchase shares of our Common Stock from time to time in the open market, pursuant to privately negotiated transactions or otherwise. As of ~~March 26, 2020,~~April 1, 2021, we had repurchased approximately ~~8.9~~9.0 million shares of our Common Stock under these authorizations. The repurchased shares are held in our treasury pending potential future issuance in connection with employee benefit, option or stock ownership plans or other general corporate purposes. These authorizations do not have an expiration date.

Item 4. Mine Safety Disclosures
Not applicable.

4130

Item 6. Exhibits

~~3.1~~
~~By-Laws of The Marcus Corporation, as amended on April 9, 2020~~

~~4.1~~
First Amendment to Credit Agreement, dated April 29, 2020, among The Marcus Corporation, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent. [Incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K dated April 30, 2020.]

~~4.2~~
First Amendment to Note Purchase Agreement date as of June 27, 2013, dated April 29, 2020, among The Marcus Corporation and the several purchasers listed in the schedules attached thereto. [Incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K dated April 30, 2020.]

~~4.3~~
First Amendment to Note Purchase Agreement dated as of December 21, 2016, dated April 29, 2020, among The Marcus Corporation and the several purchasers listed in the schedules attached thereto. [Incorporated by reference to our Current Report on Form 8-K dated April 30, 2020.]

31.1
Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2
Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32
Written Statement of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. §1350.

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4231

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
THE MARCUS CORPORATION

DATE: May ~~12, 2020~~11, 2021
By:
/s/ Gregory S. Marcus

Gregory S. Marcus

President and Chief Executive Officer

DATE: May ~~12, 2020~~11, 2021
By:
/s/ Douglas A. Neis

Douglas A. Neis

Executive Vice President, Chief Financial Officer and Treasurer

S-1


	March 26,		December 26,
(in thousands, except share and per share data)	2020		2019

ASSETS
Current assets:
Cash and cash equivalents	$	126,472	$	20,862
Restricted cash		4,795		4,756
Accounts receivable, net of reserves of $998 and $762, respectively		14,765		29,465
Refundable income taxes		10,438		5,916
Other current assets		16,857		18,265
Total current assets		173,327		79,264

Property and equipment:
Land and improvements		152,692		152,434
Buildings and improvements		761,991		761,511
Leasehold improvements		164,873		164,083
Furniture, fixtures and equipment		379,759		377,404
Finance lease right-of-use assets		74,382		74,357
Construction in progress		8,061		4,043
Total property and equipment		1,541,758		1,533,832
Less accumulated depreciation and amortization		629,490		610,578
Net property and equipment		912,268		923,254

Operating lease right-of-use assets		244,468		243,855

Other assets:
Investments in joint ventures		3,538		3,595
Goodwill		75,258		75,282
Other		32,527		33,936
Total other assets		111,323		112,813

TOTAL ASSETS	$	1,441,386	$	1,359,186


	First Quarter⁽¹⁾
							Variance
	F2020			F2019			Amt.			Pct.
Occupancy percentage		55.6	%		64.6	%		(9.0)	pts	(13.9)	%
ADR	$	129.20		$	130.05		$	(0.85)		(0.7)	%
RevPAR	$	71.84		$	84.05		$	(12.21)		(14.5)	%


				Total Number of	Maximum
				Shares	Number of
				Purchased as	Shares that May
	Total Number of			Part of Publicly	Yet be Purchased
	Shares	Average Price		Announced	Under the Plans
Period	Purchased	Paid per Share		Programs (1)	or Programs (1)
December 27 - January 30	—	$	—	—	2,756,561
January 31 - February 27	8,551		32.06	8,551	2,748,010
February 28 - March 26	—		—	—	2,748,010
Total	8,551	$	32.06	8,551	2,748,010


~~3.1~~	~~By-Laws of The Marcus Corporation, as amended on April 9, 2020~~

~~4.1~~	First Amendment to Credit Agreement, dated April 29, 2020, among The Marcus Corporation, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent. [Incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K dated April 30, 2020.]

~~4.2~~	First Amendment to Note Purchase Agreement date as of June 27, 2013, dated April 29, 2020, among The Marcus Corporation and the several purchasers listed in the schedules attached thereto. [Incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K dated April 30, 2020.]

~~4.3~~	First Amendment to Note Purchase Agreement dated as of December 21, 2016, dated April 29, 2020, among The Marcus Corporation and the several purchasers listed in the schedules attached thereto. [Incorporated by reference to our Current Report on Form 8-K dated April 30, 2020.]

31.1	Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32	Written Statement of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. §1350.

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DATE: May ~~12, 2020~~11, 2021	By:	/s/ Gregory S. Marcus
		Gregory S. Marcus
		President and Chief Executive Officer


DATE: May ~~12, 2020~~11, 2021	By:	/s/ Douglas A. Neis
		Douglas A. Neis
		Executive Vice President, Chief Financial Officer and Treasurer