Marcus' (MCS) CEO Greg Marcus on Q2 2015 Results - Earnings Call Transcript - outdoor fire pit bbq grill
Marcus (New York Stock Exchange Code: MCS) Second quarter 2015 earnings conference call at 11: 00 a.m. on July 23, 2015President and CEO Doug Neis-Lebo cfoanalystavid-Robert W.Byrdrich WaldB.RileyBrian Rafn-Morgan Dempsey Capital ManagementGood Morning, everyone. welcome to the fourth quarter earnings conference call of Marcus.My name is Sheila and I will be your operator today.At this time, all the participants were listening.only mode.We will ask a question.and-The closing session of the conference.As a reminder, the meeting is being recorded.Greg Marcus, president and chief executive, joined us today;Doug nice, chief financial officer of Marcus.At this time, I would like to hand over this project to Sir.Neis delivered an opening speech.Sir, please proceed.Doug NeisWell, thank you very much and welcome to our conference call for the fourth quarter of fiscal 2015.As usual, I need to first state that we plan to move forward with some work.The statement on our phone todayThe forward-Forward-looking statements may include, but are not limited to, statements regarding our future income and income expectations, our future RevPAR, occupancy rates and house price expectations in the hotel and resort sector, our expectations for the quality, quantity and audience appeal of future film products, our expectations for future trends in the business group and leisure tourism industry as well as in our market, our expectations and plans for growth in the number and type of our properties and facilities, regarding various non-expectationsOperating items on our income statement and our expectations for future capital expenditures.Of course, our actual results may be very different from the results of our forward plans or suggestions.Look at the report.Factors, risks and uncertainties that may affect our ability to achieve expectations are included in our 10-K and 10-Q files that can be obtained from the company SEC.When applicable, we will also post our regulation G disclosure on our website.marcuscorp.com.So, after that, let's talk about our performance for the fourth quarter and 2015 fiscal year end.I will talk more about changes that could happen in a minute --I have to jump over and say that it may not be on the surface, but it does, cover up the fact that this is another very good quarter led by our theater department, reported 13-In the fourth quarter, fiscal year performance hit a record.It's almost the same as our last two quarters, but for us, it's a special quarter, we're at 13-National box office figures are basically flat for a week.So, if we have a great movie that's unusual, that's not the case.For the sixth consecutive quarter, our theater sector has outperformed the industry.While our hotel and resort department continues to improve the RevPAR, record revenues have been contributed to the hotel department as well as to the company as a whole.As we predicted during our last conversation, we have another quarter where major renovations and brand conversions at Chicago hotels have had a negative impact on our hotel performance.I will take you through some of the details behind these figures, whether on a composite basis or in each department, and then transfer the call to Greg for his input.Let's start with the impairment charge, which is actually very simple.As you know, from a strategic perspective, we spent a lot of time actively reviewing our hotel portfolio.We also review all of our long-term asset impairment at least annually, and their process estimates future cash flows to determine the fair value of their respective assets.As you may imagine, given our portfolio and the average holding time, and most of our assets in almost all cases, the estimated fair market value of our hotel assets sometimes exceedsIn fact, if there is anything you may hear about the fact that we are talking about, we pursue potential hotel profitability opportunities, and in some cases we may get a lot of revenue on certain assets, this may require an effective income tax solution.Nevertheless, when we reviewed the hotel assets, we did determine a pre-tax impairment of about $2.6 million is related to the specific assets we reported in the fourth quarter of fiscal 2015.After the income tax adjustment, this time the impairment fee plus the impairment fee of $300,000 announced earlier by our theater department, the fourth time we reported Marcus's net earnings per share had a negative impact on the quarterly and overall fiscal year of about $0.06 per share.Moving on, I usually spend a few minutes on each line item below the operating income, but as you can see, in the fourth quarter, four applicable line items, the only significant change in property and equipment for any one project.As a result of writing these losses, these losses increased in the current quarterSelected assets of the Chicago hotel were canceled due to renovation and cancellationOf the selected assets, many will be surpassed after a major renovation of the theater.When you look at the changes in the loss of our year-end performance disposal line, these amounts mean.I will not discuss it in detail in the previous quarter changes we explained before, but since this is also year-end, I will remind you that our year-end investment income has decreased by about $400,000 more than last year, since we have provided the municipality with a long-term interest loan for the parking lot near one of our hotels, it has been paid off over the year.The offset is that interest payments continue to fall below last year due to lower average interest rates.Our effective income tax rate for fiscal 2015The controlling stake is 39.Compared to 40 5%.Last year's 2% was slightly lower than last year, but overall it is correct in our history of 39% to 40%.Say no.Controlling equity, as you can see in other reasons for our fiscal 2015, Marcus's consolidated net profit was lower than last year, due to a legal settlement last year that resulted in a record of $3.8 million controllable non-taxable pre-tax lossesControlling equity.This does not affect our fourth quarter, but a simple calculation for the entire fiscal year is if you exclude about $0.From last year's earnings per share, our net earnings per share for fiscal 2015, after adjusting the impairment fees discussed, will actually exceed 10%, nearly 10% higher than last year.Look, we're not one of the previous earnings from bad companies, but in this case, this year's impairment costs and $0 are the same.08 non-Last year's controlling amount was a one-time non-cash items.I think it is important to point this out, in fact, the way we look at the problem and the way we manage the business, and what we think about this year is that you can easily look at our business revenue line, we saw that we had $48 million in operating income last year, and we had $53 million in operating income this year, excluding impairment costs.With an increase of 10%, now you 've added another $5 million in depreciation, and now you're basically seeing an increase in EBITDA from $82 million to $92 million.That's how we look at business, that's how we look at the end of the year, and we're very, very pleased with the outcome.On a temporary departure from the earnings statement, our total capital expenditure in fiscal 2015 was about $75 million, compared with about $57 million last year.About $50 million of this happened in our theater department, which is related to a significant investment we have made in existing theaters and in new theater institutes opened in San Antonio Wisconsin.We spent about $24 million in the hotel Department, most of which was related to the renovation and renovation of the Chicago hotel, and the renovation before the feast during the corn [ph.When we look forward to capital expenditure for fiscal 2016, we again estimate that our capital expenditure for fiscal 2016 may be within the range of $70 million to $90 million, our theater division estimates about $50 million to $65 million, including about $90 million carried forward last year.This will leave the current estimated $20 million to $25 million for the hotel and resort sector, which is about half the cost of carry-over, and several projects, including the renovation of Chicago, are in progress or have recently been completed.The other half with the extra-Frankly, we have set aside some additional maintenance capital in our budget in order to assess possible opportunities for growth or return on investment --This will be assessed during the year.As is the case at this time of this year, the scope of potential capital expenditure at this time is quite large, because the time of several projects we plan has not yet been determined, or because some of the dollars for several growth opportunities may or may not have results.So while actual spending this year is actually correct within what we originally expected, our actual capital expenditure for fiscal 2016 will certainly be different from this initial estimate.In addition, if there is a possibility of acquisition opportunities, especially the theater business, it will obviously also affect your actual capital expenditure.Greg will detail some of the capital expenditure plans in his prepared speech.Now, I would like to start with cinema and provide some financial comments on our operations for the fourth quarter and 2015 fiscal years.As you can see in the numbers we report, our box office revenue has increased to 10.7% in the fourth quarter, ending seven years.7% ahead of last year.Our franchise and catering revenues have increased by 20 times.The fourth quarter of last year was 2%, an increase of 17 in the same period last year.5%, in the fourth quarter and 11 percent fiscal years, we again significantly exceeded the national figures by 9 and 2015 age points, respectively.We share with you in the press release the specific figures for the revenue earned from rakrak.In fact, according to the data we got from the hallrak, we are just touring the top ten movie chains in the United States and even reporting on the same 12-month period.The growth in the fourth quarter was mainly due to an increase in attendance of nine.Despite the national figures, there are basically no better and no worse films in 8%.We ended fiscal 2015 with 12.Attendance increased by 1% per cent.Once again, we believe that most of the attendance and performance across the industry can be attributed to our new investment in theater and our innovative marketing strategy.The average ticket price for our similar theaters has risen by 0.This quarter was 8%, but the completion of the year fell by 3.9%, of course, this is entirely due to our $5 program on Tuesday, which did not exceed the previous year until November, as you know it also contributes to our attendance growth.Including a variety of food and beverage prospects, the average franchise income for each of us has grown nine times.The fourth quarter was 5%, and we ended up 4.The whole fiscal year rose 8%.Now that we have left an introduction to the free popcorn promotion related to the $5 Tuesday plan last year, you are now seeing more directly the impact of our new food and beverage prospects on each of us's concession income.Of course, with the increase in attendance, these changes in the number of our per capita will only increase the positive side, and our significant increase in total concessions in food and beverage income is proof.To the hotel and resort sector, our total hotel revenue increased by 6.The fourth quarter was 9% and the fiscal 7% was 2015.If, as stated in the previous quarterly call, the new policy of incorporating service fees into food and beverage income is canceled, our income will increase by 3.7% and 3.6% per cent during the two reporting periods.Our press release, the revenue and operating income we reported was significantly affected as we are still operating in a hotel in Chicago that is under construction on a large scale, operate without brand support.To better perceive it, for the performance of most of our hotel portfolios, we think it makes more sense to study key metrics that do not include Chicago hotels.So with that in mind, I'll tell you that the total RevPAR of our eight similar properties went up by 5 in addition to Chicago.3% quarter and 5.Compared with the same period last year, this year is 9%.As we have pointed out in the past, our RevPAR performance does vary from market to real estate type, but I would like to tell you that there are seven of our eight comparable companies --In fiscal 2015, RevPAR was added to its own property.Now, according to the data provided by Smith Travel Research, in order to compare our fiscal year results, RevPAR of comparable upscale hotels across the United States has increased by 5.In the fourth quarter of fiscal 6%, it was.In 9% of our fiscal year 2015To be consistent with previous quarterly disclosures, I will share this with you, but now the national numbers we mentioned are not necessarily an interesting dynamic that reflects what happened to us in the more medium term.West-Central MarketWhen you analyze Smith travel numbers further, look at hotels in our particular market, and compare statistics, you will find that our competition in most markets is actually more than a year, in fact, especially if you look at it overall if you look at our competitor RevPAR for the current fiscal year, it's only up 5.3% compared to our 5.The overall increase I just talked about is 9%.More specifically, in addition to Chicago, our overall RevPAR growth for fiscal 2015 in the fourth quarter was mainly due to a 4 increase in overall occupancy.3 percentage points.Our average daily growth rate is 0.This quarter was 5%.As a result, our occupancy rate has also increased by 4 throughout fiscal 2015.3 percentage points, our ADR is basically the same.So, I'm transferring the call to Greg now.Doug, Greg markucher.I will start today with our theater department.It is clear that we are excited to report again on another great quarter and a record year in this department, which again significantly outpaced the industry.If you 've heard of it before, please stop me and it's clear that our investments in the theater are working, when you combine those investments with our innovative marketing and pricing initiatives, as a result, at a time when the industry as a whole reflected the overall decline in attendance, our theater's attendance rate hit a record.Doug shared the numbers with you, and not only did we index the country as a whole, the data we got from rakrak showed, we are again the best performing theater tour in the top 10 changes in the US.I think we answered again the question that I know a lot of you are thinking about, a week after we left $5 for launch on Tuesday, we continue to surpass the industry and the first anniversary of our original Dream Lounge location.Obviously, the answer to this question is yes, at least in another quarter.Over the next four years, we added the Dream Lounge in last May, and the recently added three dream lounges were one of the best performing theaters we had in the quarter.There is no doubt that our dream Lounge Recliner location is a key factor in these great achievements.I will tell you that in fiscal 2015, our company has more than 75% of the country's box office revenue for the first period.Part of the reason is that our $5 program on Tuesday continues to contribute to our strong results.Tuesday's performance was better than Tuesday's in the same period last year.As Doug pointed out earlier, national figures show that the number and quality of films in these quarters are not significantly different from last year's comparable sectors.The quarter actually started a bit slow, but it started around Easter and then it started again when the Avengers came out.Of course, when you look at the entire fiscal year, the national data will tell you that this is a year of box office decline, but you won't know if you look at our data.Again, the wrong numbers suggest that this year's film history is likely to be a little deeper, while the top films listed in our press release this year account for about 18% of our total box office, or 19% of the top films last year.But I believe more than that.We 've been seeing this dynamic since we launched the $5 Tuesday show, and I'm sure our numbers will show that we 've increased the frequency of film spread among our customers.The increase in frequency may be beneficial to the second year of the film, and after the blockbuster, our customers may pass on the film in the past few years.While it all starts with box office revenue, it is still our operational team's responsibility to translate these revenue growth into increased operating revenue.So I'm very happy with our 21.Operating income increased by 5% in the quarter, an increase of 15.Growth of 1% for the entire fiscal year.Although fixed costs have increased due to our recent investments, due to the fact that we serve a lot more customers than in the past, operating costs have increased, and new costs associated with our loyalty program have increased, this quarter, our team is able to increase our operating profit margin by 4 percentage points.In fiscal 2015, our operating margin was 19.9% is 80 basis points higher than last year.Our entire operations team, from our senior general manager and regional director, to our Home Office staff and leadership team, should all be greatly rewarded for producing these excellent documented Operational ResultsSo now we're in fiscal 2016, and while the film's titles look good, you 've heard us say that our goal is to continue to surpass any particular quarterly movie.Our past in achieving this goal begins with many of the same strategies you have heard.As Doug shared with you, we invested another $50 million in this business in 2015 fiscal year, a large part of which was spent in the second half of the year.The early response to these investments is very good and you will see some stores in our fourth quarter.In particular, I would like to point out that we will certainly seek sustained returns on these investments in fiscal 2016.In particular, I would like to pick out the new Palace of the Sun Perry [ph] cinema we opened in April 30.I encourage you to do so if you have a chance to see this unique entertainment destination.This is our first new building Theater in several years, and it gives us the opportunity to integrate all our successful facilities under one roof, with great results so far.The response from our client to this theater was fantastic and I can tell you that the studio was also very pleased with us.We are pleased to continue to invest in new and existing theaters in fiscal 2016 as we further expand the successful concepts and facilities that contribute to the performance of our industry.Doug told you that in the 50 million fiscal year, we may spend up to $65 million to $2016 in this department, and we will do this in a number of ways.We expect to start building another alternative theater in another market soon and we are looking for additional locations for new locations.I have mentioned that we are considering building our first stand-alone big screen location and building on specific opportunities that we are working on, which may also start in fiscal 2016.Of course, our dream recliner seat has been greatly welcomed by our customers, so we are currently evaluating it for fiscal 2016, in addition to the two new theaters I just mentioned, there are also three or four theaters to increase the chance of this superior seating comfort.We also plan to continue to expand our proprietary concept of big screen format.We are currently evaluating the conversion or adding four extra ultra-Screen VLX auditors and seven of our new superscreen DOX auditors for fiscal 2016.As the concession figures Doug shared with you show, our new dining concept will continue to be successful.We opened another Take5 Express earlier in fiscal 2016, the other is under construction, and at least one is on the drawing.The other two expressed our results early in fiscal 2016, while the other was considering the other three in the second half of fiscal 2015.Needless to say, our team will be very busy, but as you know, it's not just about investing in capital, part of the reason for our success is our innovative marketing and pricing strategy, we will build on fiscal 2016 with over 1 million members in our loyalty program and our team will focus on communicating with our loyal customers, whether it's a product of special value or promoting alternative programs, special movie series or attractions.If I do not mention that we continue to believe that the acquisition of existing theater or theater circuits is also a viable growth strategy for us, I will miss [Dr.We do not believe that we are geographically restricted and have a strong balance sheet, available capital and a reliable record of implementing proprietary amenities and operational strategies, and we believe that if there is an opportunity, we may add value to the right theater or theater.We are not the kind of company that just wants to grow for growth, and the fragmentation of this business and the nature of family control make it difficult to predict when these opportunities will pass, but I will tell you, we are actively pursuing this strategy.Finally, as I mentioned earlier, the film looks very good, and there is a good start to the summer and our corresponding fiscal first quarter.Our press release highlights some of the films that have performed well so far, and we also list some of the remaining films in the first quarter.The movie supply for the rest of the calendar year also looks good, as highlighted by James Bond, Hunger Games and Star Wars franchise films.Of course, at the risk of competition, our goal is to continue to surpass the industry, regardless of the prospects of the film.I know our team is happy to take this challenge in fiscal 2016.Next, let's move to our other departments, hotels and resorts.You 've seen the market segment numbers and Doug has given you some additional details, not including Chicago, and we 've reported a significant increase in revenue from the RevPAR and the record-breaking division, surpassing us againObviously, the results are disappointing from a revenue perspective, but as Doug shared with you,The time impairment costs and operating losses of the Chicago hotel we continue to operate will have a huge impact on the results we report.In my speech last quarter, I also told you that we have a specific hotel that was very strong in the fourth quarter of last year and it is likely that it will be difficult to replace some of the businesses that drove the growth of last year's performance, unfortunately, I am correct in this case.One reality we face is that only nine companies have most of their own properties, and according to the results we report, even the changes in one or two hotels can be seen in this quarter, it is obviously more prominent.We don't talk much about individual properties for competitive purposes, but it's surprising that our strong RevPAR data for this quarter and several hotels with very good performance this year prove thisI would say that in the event that most of our RevPAR growth is driven by occupancy gains, it becomes more difficult to increase operating profit margins and maximize operational revenue traffic --By increasing income.There is no doubt that one of our key targets for fiscal 2016 will be to make ADR growth an important part of our gross revenue growth.If the group business continues to grow, one way that may arise is.We are making continuous progress in the speed of group bookings, which is a very encouraging sign.We actually know that due to the reduction in conference business, it will start slower this summer, especially in the home market in Milwaukee.But, over the course of the year, things become more hopeful from a group perspective, because we already have more group business than we did last year.Of course, as we look ahead to fiscal 2016, we are also pleased with the new opening of Marriott AC Hotel.Obviously, this property has had a considerable negative impact on our performance for fiscal 2015, so we are happy to be able to get rid of this impact.We are very excited about the future of the new brand.So far we have only been open and officially operating on the Marriott system for a few weeks, but the hotel looks great and we have received great reviews from our guests.More importantly, most industry experts seem to be very optimistic about the future of the industry.They all seem to be predicting that the US hospitality industry will continue to achieve strong growth and RevPAR at 2015 and 2016, a shift that is taking place at record levels --Setting occupancy rates and overall growth of ADR, the yield of ADR exceeds the main driving force of the following factorsBy 2019, it was the main driver of RevPAR growth.I think the reality is that no one really knows what the future will look like.But I believe our hotel can do a good job in our market and I know our operations team is focused on increasing revenue and profits.It's not a secret that we really want to develop our management company, and we are actively looking for some potential growth opportunities, with a particular focus on managing contracts and possibly getting some silver equity in a timely manner.Over the past year, we have used this model to add to the Zamora hotel, and we recently announced our participation in the Marriott hotel in the Xindu district of Omaha, once again using the model of the management contract, plus very little rent, talking about what is a secret and what is not a secret, our press release also states that we have entered a secret situation as a result of our recent purchase of a safe house, A signature spy-themed restaurant in downtown Milwaukee has been popular with tourists and locals for nearly 50 years.One of our growth strategies in this sector is to take advantage of our food and beverage expertise and we see opportunities to expand our successIn addition to adding the existing Milwaukee safe house restaurant to our operating expenses results, the Miller Time Bar and Grill restaurant brand.We look forward to exploring the opportunity to expand this concept, and finally, as we discussed earlier, Doug mentioned again earlier, we are also actively reviewing the opportunity to sell one or more of our own hotelsIn doing so, many factors must be assessed, including income tax considerations, the ability to retain management, pricing, individual market considerations, etc.We evaluate our hotel's asset strategy by asset base and we did not set specific targets for the number of hotels that the strategy might consider, nor did we do so at this time.Having said that, if we determine that such action is in the best interests of shareholders, it is likely that we will sell one or more owned hotels in fiscal 2016 and beyond.So this ended another fiscal year, in fact, 2015-As we pointed out in the press release, 2015 marked the 80 years of Marcus, and during that time our core philosophy changed a lot, provided service and value to our guests, maintained a strong balance sheet, and imagined to stay the same for a long time, we were very obvious again in fiscal 2015.Our board expressed confidence in our future by raising the quarterly dividend by 10.In the fourth quarter, we had a 5% performance,We will continue to grow in the coming year.With this time, Doug and I would be happy to open the phone for any questions you may have.Question-and-[Operator operation instructions] answer.Let's go to David Loeb of Baird first.Please proceed.David LoebCan, I started with impairment, which is related to what Greg just said, and it is clear that when you look at impairment, one factor is how long you intend to hold the asset.So, is this damage related-Greg mentioned one or more assets that you would consider selling?Doug Neys David, I will be in fifth place on this issue, and I am very grateful to this issue, for various competitive reasons, strategically I do not want to identify the property involved, but this is part of our whole process.In terms of how we go through this process, you are completely correct, we do it at least once a year, and if there are impairment indicators, we do it more often, so it's combined with this larger process and the larger strategic process what we're going through, but I'll respectfully stop telling you more about specific assets.David LoebI sorry if I missed this, it is clear that the hotel stock is melting today and we see what is up to date on the timing of Von Maur's announcement, when do you think you actually broke ground on this project?Doug NeisSo first of all keep in mind that we are not management members of the joint venture, so we are minority shareholders of the joint venture and we have contributed our land, but Bradford [Dr], I am running this project right now and they are going very well and my understanding is that they are about to rake-They are about to start laying the foundation, which will be the technical definition of the start of the building.Any day in the next week or two, so I understand it very well.You have to ask again, you know they have to comment specifically on their overall schedule, but it looks great if you 've been there and there's a lot of dirt moving around.They are preparing mats for Von Moore, so it's good.Then I'm glad you asked this question because it's completely relevant to all of this.We 've talked about part of the whole process-Part of our entire agreement is that most of our pre-Development costs.I do want to add that if you look at the numbers and you see the Company department, you will notice that the company Department is a little bit better in this particular quarter, because we actually did it and went on, I would say a net and I would tell more than $1 million, about $1.4 million of the items we previously spent were returned in the process because we will be reimbursed and we have been working for years to resolve this year 45 issue, in the process, we have always been very conservative and the fees include some of the fees and part of our entire transaction is compensated for this.So this is a comprehensive reflection of our results, and we are very happy about it.Thank you for looking forward to my next question so it sounds like you have taken the accounting steps to turn this around and it sounds like you will be compensated in any day from the start of the construction technology, is this the right way to think?Greg marcousi just hit it.David lowwell, let's start the drama.Greg, I really appreciate your comments on continuingPerformance industry.In your first quarter, the industry did a very good job.date.What we're tracking is20% year-over-year gains.If you continue to perform well in the first quarter, can you rest assured --date?Doug Nesi thinks my general advisor is running in and I can't comment on this right now because we haven't posted anything publicly.I did it in our prepared comments, David, the only thing I'm going to tell you is, so we won't talk about it, we won't talk about the whole.We did say that Milwaukee's local business, group business, commission business ---He is talking about the theater.We will come to the hotel.Doug neissey seriously, we didn't track, we didn't compile for the first quarter, we followed the information the usual way, but as you pointed out, the results were very strong, we didn't flinch in the comments because we said how good it must have started this quarter, thanks for the Jurassic World Inside Outa and Minions, which was a good start.David LoebNow let's talk about the hotel, I appreciate your review of AC, I heard something very good and you are very positive about the outlook for fiscal 16, is there that brand in that place?Doug NeisWe only had one game in the first inning and we spoke very early but it looked great and really it was an asset that looked great and it was a great real estate, we just got the Marriott system and, as we pointed out, our initial rate is very high --Our challenge to our team is to start making us-We will build the face of our group business, but we expect to do well and should do well.David Lobin Milwaukee, Doug, sounds like you guys are really doing it yourself in a market with a lot of new supplies.Is this conclusion fair?I mean, Doug nice, it's a fair assessment --But, nevertheless, it also reflects the fact that when you look at it, when I compare the United StatesS.The number to the middleThey don't quite compare the western numbers because the fact is that there has been some decline in supply in our market.We did a great job, and I think Greg had talked about it on the previous phone.We saw that some other people might struggle and accept it on the channel, but we kept our property so we stayed there very well.However, it is really more challenging to try to raise interest rates?I mean, ifSupply, less and less pies-Some people who are working hard are beginning to try to become aggressive at the rate of becoming a challenge.Greg Markusen, Milwaukee is no longer a secret, we talked about our foray into the Milwaukee conference business and it started very slowly, so you know we're breaking this pie --Now we will buy a smaller pie with more players.So it is -It's a challenge, but again weI always said we were.We don't worry too much about ourselves because we keep our assets and we are very competitive.This is a challenging environment.David LoebAnd can you give us the RevPAR position for the fourth quarter, including Chicago, and I get the position to be excluded.Greg MarcusNo, I would be happy to do so, this is very little information we disclose and this will improve our M & A so I would be happy to share it with you.So let me pull it over.So including -RevPAR rose by 3 in the fourth quarter.2% if you include Chicago.David LoebAnd is basically checked in?Greg MarcusNo is actually a mix of occupancy and house prices, Chicago is coming to an end and we are starting to be more positive about house prices because-We haven't officially become AC yet, but the building is finished, so we started raising rates at that hotel later in May.Doug nice and Chicago, I think.toward that -This is Mei. it runs very fast. it's the whole city. it's when the town is packed.We're not the official exchange correspondent Greg Marcusse however, at that time we were able to drive a little more in Chicago, so it's interesting that when you include Chicago, our average speed is slightly higher than the rest of us but it's just because of what happened at the time and there.David lobokay, so do you still have the numbers for the whole year?Greg MarcusYes is fourth in the year.3% RevPAR, most stay.David LoebSo in Chicago basically has nothing to do with the absence of Chicago?So Greg marcussey said again?David loby, as you said earlier, increased by 4 throughout the year.3 and RevPAR.Without Chicago, the whole year has gone up.9.The occupancy rate increased by 4 first.3 percentage points.David lobgo, OK, but RevPAR is up 4 this year.3%.Greg MarcusRevPAR is up 5 points.9% and Chicago only rose 4.3%.David lost it.Okay.Very bad, last question, safe house, I promise, this will go into the hotel department, it's not like you start the restaurant department again.In the past, you have obtained permission from Zaffiro.So, what gives you access to this and what are your plans for how you can integrate or develop it in the hotel department?Doug NESI will have the BB agent answer the question, he has made his own agent called "[invisible]" and I will have Greg answer the question.I wish I could tell you David, but the speaker didn't, and I have to admit how I was-We talked all the time.This is part of former owners Dave and Shawna Baldwin who have long been part of our Milwaukee community and we have been talking on and off.We have always been interested in what happened to them there.Have you thought about our company?Our company has made a lot of profits from espionage.What was the first series I was talking about in the comments I was preparing about the upcoming thing, James Bond.We are about to start the impossible task, we are, the spy story is the team, I think we will naturally be curious about what this means to us.We had a long discussion with Dave because we were in Milwaukee and it was basically a place to travel and we probably had a lot more control over visitors than anyone in town.So logically, it's a good thing to have our rental hotel here in Milwaukee.On top of that, we 've always wanted to do a little bit of R & D, so one thing, in our opinion, is that it's a low cost R & D, and what I get is that there are two things, that's not a very big business, compared to our company, it is relatively small and usually will not appear in this discussion, but when we first discussed it, it was iconic and when we reached an agreement, I think we got one or two new stories and we run every TV station and as you can see here we are in every newspaper.It really resonated with people because it was really a special place.So we want to know what's in this? Is this something we can grow up? We have a hotel Department because it's a small refinement that needs to benefit from all the fire we have in this big operations department.Interestingly, it's R & D, and interestingly, the weight of it is because of what it is and how iconic it is, so everyone is happy and we will see where it goes.Your next question comes from the lines of Eric Wald and B.Riley.Please proceed.Eric WoldJust, I want to have a really great show in the theater, dig out from the data how much of it is a competitive game for the rest of your area, what's the point?Greg marcussett is interesting, Eric, because while there may be something like this, there is no doubt that there is a problem when we put these amenities, especially the dream recliner, into it, we can range from a wider range, probably more likely than a typical theater.That being said, as we are talking about, some of our recent investments have not-Not so many opportunities to steal from other competitive theaters, the first wave we did was the low-hanging fruit, which we thought we could easily do, but as we have discussed, as we have now entered, then we did the next four games, and then we did four more games, we did the palace and not only did there be many highly competitive theaters, but they still performed well.I think our frequency is increasing, we start further away and we re-energize the experience of the movie, so there may be some, but there's more to that.Doug nice and I think we can add that again through our loyalty program and pricing strategy, you know we are all --I think the frequency of our existing customer base is getting higher and higher because we are able to market products to them more effectively, you walk into our theater on Tuesday, I mean there is a different customer, we know that some people don't come to the theater a lot, so I don't think we'll take them away from other places, and I think they think it's an opportunity to go back to the theater experience.Eric WoldOkay, then based on the $50 million capital expenditure for the theater this year, how many of them are allocated to a new theater, or if this happens, it will be incrementalGreg makussi, I'm sorry. we're talking about the coming year?Eric WoldCorrect.Greg MarcusOf, 50 to 65 years old, it depends largely on when, how much, when we start to act, and how much expenditure is advanced this year, and that's why you see part of this scope, but you know what I mean is that by the end of the year it could be 15 to 20 million, probably, depending on the time, I mean it may be in this range.Eric WoldAnd then there are two more questions about the acquisition, one is about the acquisition environment on the theater side, and maybe just talk about the general mindset of this change that you and potential sellers see, once AMC Starplex announces, it came out because people were more excited about the sale without giving the price and then two, just like a previous problem with the restaurant in the safe house.I mean, if you want to do more, do I think so?Off is an opportunistic, where you can get some synergies, or would you consider buying a chain restaurant like you would like to buy a chain theater?Greg Marcusse asked me to answer the first question about the market, the acquisition market, and I would say --About starplex, I think it's too early to say it's so fresh.I don't think that with this opportunity that we are looking for, it may not have much impact.We are looking for something that we can add value and we come in and do what we have been doing because for us --It's not just adding something and then adding it to our deal.We need to be able to add value.So we haven't seen much change yet, and I think it's too early.There are things that we have the opportunity to look at and we are looking at, but we will be disciplined about what we do and we always do.I mean, I can't tell you that we are looking for a chain restaurant, but I will always tell you that our job, which we think is the manager of Capital, if we have capital, we can go to other places to see, but now we have enough opportunities in our own business, we don't have to see major acquisitions, completely different thingsOperator your next question comes from a route that the Benchmark Company [cannot identify.Please proceed.Unknown analysts on the hotel's side speculated about what friction would be caused by the sale of one or two of these assets, and in the past few quarters, you expressed an Open wish, I think this is more or less confident in your ability to execute in potential sales?Doug nesaw Mike you get [invisible] we always hedge our bets here and say because when you talk about things, a lot of things happen like this, we 've listed a few things that are important for us to pull the trigger in the transaction, but I 've said that, I mean I'll reiterate what we said in the prepared comments that it's not-Of course, this is not surprising at all in fiscal 2016, and most likely in 2016 you will see us implementing this strategy.The meaning of the unknown analyst on your balance sheet is obvious that you have a very good balance sheet, and of course, I think it's important in terms of design, however, in the face of the favorable environment for the development of business through mergers and acquisitions, I think you are willing to improve a little internally. I think it may be to achieve performance growth and integration, especially when you think of organic elements, organic growth.Perhaps the specific things you are doing may have defined potential M & A transactions internally in the past.Doug neissey will answer the second question, half of the question, and I will have Greg answer the first half of the question based on Will and balance sheet.But look at us.One thing to say is that we will be open to any acquisition opportunities that may arise.One more thing is more intentional.I mean, we did it on purpose, Mike.In fact, we have hired some third party assistance to help dig out the field outside, because as you know, this is a very broad area, it is very scattered and there are a lot of families here.and very much.So we are interested and this is the best way I can answer this question, not just waiting for the phone to ring.Greg, because it's about our will to the balance sheet, would you like to address this?Greg MarcusWe has good cash flow, we have-I mean, we obviously have more leverage on our balance sheet, and given that we are real estate companies, one can argue that we can take on more leverage.Therefore, we are very satisfied with the ability to execute transactions now with our balance sheet.When you look at the deal, it is clear that you say that your real estate is a big factor, but at this point, is it important for the theoretical network you want to acquire to own land or lease land?Greg marcussett is a little bit-Mike, I'll give you a subtle answer because in some cases it may be important to us and where it is, and we 've talked about it publicly, this is back to other strategies related to the hotel and in some cases we have something very important.I do not know that we are the ones who have made a significant contribution to this small impairment charge today, but the reality is that we have achieved some very significant gains.Accounting does not work like this, but we have embedded some very significant gains in these assets, which have income tax considerations and are very effective, not only effective but effective strategy is to make 1031 transactions where you can sell some real estate and buy some real estate there, which of course is one of the tools in our toolbox, when we see this, we will definitely consider it.It's not the only thing and it doesn't get in the way of us looking for opportunities without real estate or without that much, but it's certainly one of the things we're looking.My last two small questions are to keep the subject of Q &.Greg, I think you said you could add 3 to 4 units, 16 on the theater or recliner, give me-I heard it wrong.But I would like to know what the return profile of these late recliner installations looks like compared to your initial installation, where you seem to be converting a theater network that performs less?Greg marcuso's obstacle is the obstacle, so we set a barrier rate that we expect to encounter before we release capital to our department, and that's-and really -It would be great if it played well.[Illegible] I mean, we picked a low hanging fruit in the first place, but that being said, we still want to reach our threshold when we make these investments.Unidentified analysts stand on the last of the window, share your ideas or possible plans with us, work with Paramount to deploy movies, theater movies to numbers next timeGreg makussi guess what I'm going to say is that I 've been listening to it for years and I 've [couldn't hear it] the public's position on the window issue, I said, man it goes back five years I said be careful we don't want to be a frog in a frying pan and in a frying pan they will slowly reduce the overtime hours of the windows and we will end-We never thought [it] was unrecognizable.Therefore, we must be alert to these windows.You see, our chain represents the law of supply and demand in the market, the windows and the products, why is the $5 effect so good on Tuesday and why do people come back to the cinema?We lowered the price.Because I don't know, we lowered the price because the scheduling period was shortened and the availability of downstream products was also great.This is a fire hose, when you can drink in the fire hose, because I don't know how much it costs to watch what, movie or something, why not? It affects upstream value when compared to pricing and upstream value drops, so when they change the exclusivity period.So they have to be very, very careful about what they do.I have been talking about it for many years and I will continue to talk about it.The next question comes from Brian lafen of Morgan Dempsey Capital Management.Please continue.Brian RafnI thinks Greg, you talked a little bit about the big-screen bistro standing free, what's the difference, besides the dinner thing?You know the layout, would the auditorium describe it a little if you could?Greg MarcusWe is still working on the exact details of what we want for the auditorium, we have completed the different versions of the big screen bistro where we have a more counter where the seats can be moved on, we went to more places with our dream recliner in front of your seatIt is basically a theater dedicated to the concept of catering.So we are now in [invisible] four dining concept screens and three in Majestic, part of a larger complex where we do big-screen bistro express.It's going to be all screen diningIt just makes it say what the concept of the customer is, and that's exactly the concept, and we think it's clear that people have been successful in these areas, and we believe this is what we need to experiment.Greg, Brian loughnis from Hall 12.Each theater has 5 screens, is it the same or will the logistics change with all the mealsIn a big bistro?Greg Markush's screen, I don't think we 've ever actually built half of it, Brian, I can't help it, it's three smaller theaters.Brian lafen, let you guys-$5 on Tuesday, how do you feel about food and value guidelines [ph?Greg MarcusWe thought there was a chance to add this naturally, obviously it was a valuable customer, so it lowered our cap when we ran the program, but we also-I mean, as we get better, we know we have a chance to increase that.It's hard for people to serve them naturally, so the more we can serve those people we think have the opportunity.Brian RafnOkay.When you open the palace [invisible], you have a little consensus that you know the expectations and reality of what's going on and give me a feeling of what you 've been through?Greg marcussett was very active.When you say expectations, you have to depend on who you ask and there are some people in our company who have high expectations for you.Everyone has high expectations and some are a little higher than others.But we are very satisfied with the performance.Brian RafnI didn't see anything, what would be the difference when the grand concept started a few years ago?What's the difference between Greg Marquez?It is more delicate and smaller in size.When we were doing Majestic and Brookfield, I mean, it was really talking about R & D, everything was brand new there, we never did a big screen bistro before.We never had five lounges, we never had Zaffiro's pizza before, so the way we set up the building, we learned a lot from it, so when we have the opportunity to build another building from scratch like this, we apply a lot of learning to how we lay out the building.It was spectacular when you walked into the hall.I mean, you don't miss it in the "five breaks" lounge, it's there and you have an outdoor fire pit area.So we are from our variousWhat we do here and try to incorporate it into the design of this particular theater.Doug Nesi thinks it's interesting that it proves our [technical difficulties] business and our long-term thinking process and vision as it's an improvement that we're open --We open our doors in Brookfield.-Greg makussi thinks we might be looking at 9-10 years now?Doug NeisSo we are doing the same thing, just in a more refined way, more experienced and smarter, but we know that food and drinks are important.10 years ago, 9 years ago, we had a strategic plan to say that food and drinks are coming and that's important to our business, how do we plan, to be honest, I don't know how important this is, it may be more important.Brian RafnOkay.When you talk about the field, Greg, I think you have some numbers about the top 5 that compare 2015 or 2014, give me a feeling, maybe 6 to 20 movies, how about deep years-over-year?Greg marcouswell, so we represent this in the prepared comments Brian, and at this point we see something that looks very consistent every quarter, the numbers will tell us this is a deeper slate, okay?But now it's hard to evaluate it, it's apples and oranges, and we really believe that what we're doing is driving as we drive more often, there is a better performance for the next layer of film, so the numbers now will reflect that this is a deeper slate, and I don't know if all this has been said and done, everyone else will agree with this, or the national number will agree with this, or not, because it may be how it makes the same kind of film that they have always had.I'm just telling you that our numbers are going to reflect it deeper and we think that what Hollywood does is what we have to do.Brian lovelokai, and one more, actually $5 on Tuesday.Correct me if I'm wrong you have something like college or student $5 on Thursday and then you have something special, for example, a women's night on Monday or you have this niche major, some others make $5 on Tuesday.Greg marcussey is fine.We were happy with their performance and it was clear that they were not that strong. They just don't have half of the marketing promotion, and it does help us to focus, the word is even more detailed than we spread throughout the communication, but this goes back to our theory about the right customers, at the right time, at the right price.Learning from the hotel business is a great thing because it's revenue management in the hotel business and what we get in the theater business.Your next question comes from the Jim Goss series at Barrington Research.Please proceed.Jim Gauss would ask a couple, one about the dream recliner, and when AMC started its process it seemed to focus on its typical urban area, some poorly performing properties, and try to find a way to expand the audience and create some loyalty.You have different geographical locations and markets.I would like to know if there is anything in common with the approach you have taken with the dream recliner, and if there are certain markets that might not be good to do such things, as it may not be possible to get a return.Greg makussi might say, first of all, we look a lot and our model is very similar to what AMC is doing.I want to say it now, but wewe are now -We have made some attempts in other markets and the rewards have come across our obstacles because you know what a good way to watch a movie is, we believe that it can drive incremental customers and it allows us to invest in returns at the right price, and we think that we are not just going in general, but in the Dream Lounge, remember that we are doing a full package, we are placing the Dream Lounge, we are going to put a Zaffiro Express and we are going to put five lounges.We're really upgrading the whole experience, so at some point you can describe one thing you know, that's-We talk to the whole experience.Jim gossokai, so are you saying that it might be more broadly applicable than you originally thought?Greg marcussey, I think-Our competitors have already talked to us.There is an organic growth and there is a growth in share transfer.So, will the return be exactly the same if you don't have a share transfer?No, they won't, but they're still fine, they're still [invisible] Jim, you actually mentioned another part of math in your question, that's math, and we did, because we have.You still lose about 50% of your seats, so we still need to do an exercise to determine the impact of the seat reduction, and we get more data than you can use it to see, annualized, to determine if we can, so your question is, where you may not be able to do it, you will be rewarded, the answer is yes, you may have such a place, there are some, there.Jim Goss, maybe there's another issue, a bit of an end, but they're adding value when you're talking about your M & A strategy.It sounds like you'll be easier to fix some of your [unrecognizable] changes and you're looking for those that don't need too much of them, why are you joining this infrastructure, I would like to know if there will be more changes considering the additional investment we need, these types of properties are offered at a more reasonable price, or you may even want to put in a description because of your strategy.As time will tell us, Greg marcoustjim, but this is one of our therapies, and one of our assumptions, if you like, is yes, we talked about when digital movies came along, there could be such a big wave of mergers and acquisitions, which of course did not happen, as the operators of the theater who effectively paid for the conversion fees did not think so.Now we're starting to talk about recliner chairs, food and drinks, which is the main goal of theater operators, so it could be an opportunity if someone could be subject to more capital constraints, so this is certainly one of the things we will focus on, not the only but only thing we will focus on, and I will tell you that we are still early in the M & A process, this is because we really spent the first few years, and in the last few years we 've been very focused on using this circuit to have the opportunity to say if I'm going to take the capital and make it work, let's put it in markets that we know and understand very well, and what I want to say is that we also know about other markets that we think are applicable, but let's start with these markets, so why are we doing this.Thank you.There seems to be no other problem at this time, I want to transfer this call back to Mr.Neis for any additional or closing comments.Doug nice OK, thank you all for joining us today.We really appreciate it.We look forward to talking to you again in just a few months as we release our first quarter results for fiscal 2016 in September.Before that, thank you and wish you a happy stay.The operator who finished the call today.You can now disconnect your line at any time and have a great day.