SEC Company Response from MARCUS CORP (MCS) (CIK 0000062234) (MCS) — May 30, 2008
MARCUS CORP (MCS) (CIK 0000062234)
Date: May 30, 2008 · CIK: 0000062234 · Accession: 0000897069-08-000987
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 001-12604
Referenced dates: April 23, 2008
Letter
VIA EDGAR AND FEDERAL EXPRESS CLIENT/MATTER NUMBER 052560-0725 Mr. Kevin Woody Accounting Branch Chief Division of Corporation Finance U.S. Securities and Exchange Commission 100 F Street, N.E. Washington, DC 20549-3561 Re: The Marcus Corporation Form 10-K for Fiscal Year Ended May 31, 2007 Filed August 14, 2007 Form 10-Q for the Period Ended February 28, 2008 Filed April 8, Definitive 14A Filed September 12, 2007 File No. 001-12604
Dear Mr. Woody:
On behalf of our client, The Marcus Corporation, a Wisconsin corporation (the “Company”), set forth below are the Company’s responses to the comments of the Staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) set forth in the Staff’s letter, dated April 23, 2008 (the “Comment Letter”), with respect to the above-referenced filings. The numbered items set forth below repeat (in bold italics) the comments of the Staff reflected in the Comment Letter, and following such comments are the Company’s responses (in regular type).
Form 10-K for the fiscal year ended May 31, 2007
General
1. Please correct the file number on your Form 10-K cover page to reflect the accurate file number for your filings. Please note that your file number for reports filed under the Securities Exchange Act of 1934 is 1-12604, not 1-12609 as noted on your Form 10-K.
The Company will correct its file number in all relevant future filings under the Securities Exchange Act of 1934.
Item 1 – Business, Page 2
2. Please include a cross reference to the financial information about your business segments contained in your financial statements. We refer you to Item 101(b) of Regulation S-K.
In all relevant future filings, the Company will include a cross-reference to the financial information about its business segments contained in its financial statements pursuant to Item 101(b) of Regulation S-K.
BOSTON
BRUSSELS
CENTURY CITY
CHICAGO
DETROIT
JACKSONVILLE
LOS ANGELES
MADISON
MIAMI
MILWAUKEE
NEW YORK
ORLANDO
SACRAMENTO
SAN DIEGO
SAN DIEGO/DEL MAR
SAN FRANCISCO
SHANGHAI
SILICON VALLEY
TALLAHASSEE
TAMPA
TOKYO
WASHINGTON, D.C.
Mr. Kevin Woody May 30, 3008 Page 2
Item 7. Management’s Discussion and Analysis
Theaters, Page 22
3. Please disclose the portion of your theater revenues derived from ticket sales and concession sales, respectively. Also, if used by management, please disclose the average ticket price per person and discuss whether an increase in ticket prices contributed to an increase in revenues for the period. Similarly, please disclose the actual amount of concession sales per person and discuss whether the increase is attributed to increases in price or volume of sales.
The Company specifically provided separate line item disclosures in its summary financial results table on Page 22 of its fiscal 2007 Form 10-K setting forth the respective portions of its theatre revenues derived from box office revenues (i.e., ticket sales) and concession revenues for each of its last three fiscal years.
The Company does not believe that disclosing its average ticket price per person and/or its average concession sales per person provides any additional meaningful information to investors to better understand the Company’s results of operations or financial statements. On the contrary, the Company believes that such disclosure may cause it competitive harm and may adversely affect its customer relationships and, therefore, its results of operations and shareholder value. The Company notes, in this regard, that it already describes the comparative period percentage changes in both its average ticket price per person and average concession sales per person, including the reasons therefor and the general impact that such percentage changes have had on the Company’s comparative period theatre division revenues, so that investors may clearly understand how and why such historical trends have impacted comparative period theatre results and may impact future theatre results. The Company’s management uses this trend data, rather than the nominal dollar amount of its average ticket price per person and average concession sales per person, to analyze relevant financial performance trends in its theatre business. The Company believes that the stock market research analysts that follow the Company similarly effectively utilize this percentage change data to assess relevant financial performance trends in the Company’s theatre business. However, in order to be responsive to the Staff’s comment, in relevant future filings, the Company intends to enhance its disclosures regarding the relative quantitative impact on its theatre division revenues resulting from comparative period changes in its average ticket price per person and average concession sales per person. Specifically, the Company intends in relevant future filings to quantify the aggregate dollar amount and percentage impact that such comparative period relative percentage changes in each of its average ticket price per person and average concession sales per person have had on the Company’s comparative period theatre division revenues. Similarly, in order to be responsive to the Staff’s comment, the Company also intends in relevant future filings to provide more descriptive information on the factors impacting such comparative period changes (including, with respect to changes in comparative period average concession sales per person, the relative extent to which such changes were the result of changes in price and/or sales volume). The Company believes that providing this additional disclosure regarding the trends and factors which are similarly assessed by the Company’s management will further help enhance investors’ understanding of the trends then affecting its historical comparative period theatre results and which may impact its then expected future theatre division results.
Mr. Kevin Woody May 30, 3008 Page 3
Hotels and Resorts, Page
4. Please disclose actual amounts of RevPAR, occupancy, and average daily room rate for each of the periods reported. Currently, you disclose only the percentage change.
The Company does not believe that disclosing the actual amounts of its comparative period RevPAR, occupancy and/or average daily room rate provides any additional meaningful information to investors to better understand the Company’s results of operations or financial statements. On the contrary, the Company believes that such disclosure may cause it competitive harm and may adversely affect its customer relationships and, therefore, its results of operations and shareholder value. The Company notes, in this regard, that it already describes the comparative period percentage changes in its RevPAR, occupancy and average daily room rate, including the reasons therefor and the general impact that such percentage changes have had on the Company’s comparative period hotels and resorts division revenue, so that investors may understand how and why such historical trends have impacted comparative period hotels and resorts division results and may impact future hotels and resorts division results. The Company’s management uses this trend data, rather than the nominal amount of its RevPAR, occupancy and/or average daily room rate, to analyze relevant financial performance trends in its hotels and resorts business. The Company believes that the stock market research analysts that follow the Company similarly effectively utilize this percentage change data to assess relevant financial performance trends in the Company’s hotels and resorts business. However, in order to be responsive to the Staff’s comment, in relevant future filings, the Company intends to enhance its disclosures regarding the relative quantitative impact on its hotels and resorts division revenues of changes in its comparative period RevPAR, occupancy and/or average daily room rate. Specifically, the Company intends in relevant future filings to further quantify the aggregate dollar amount and percentage impact that such comparative period relative percentage changes have had on the Company’s comparative period hotels and resorts division revenues. The Company believes that providing this additional disclosure regarding the trends and factors which are similarly assessed by the Company’s management will further help enhance investors’ understanding of the trends then affecting its historical comparative period hotels and resorts division results and which may impact its then expected future hotels and resorts division results.
5. Please furnish us with copies of the relevant portions of the Smith Travel Research reports that you reference in the last paragraph on Page 25 and again in the third paragraph on Page 27. Please mark the copies to highlight the information that supports your disclosure.
Accompanying the copy of this response provided to the Staff by Federal Express, we are supplementally providing a copy of the relevant portions of the referenced Smith Travel Research reports, together with the Company’s spreadsheet which compiles and aggregates these monthly statistics so that appropriate and accurate fiscal year-over-fiscal year comparisons may be made by the Company. Such reports have been highlighted to reflect the information that is compiled by the Company to support the referenced disclosure.
Mr. Kevin Woody May 30, 3008 Page 4
Item 8. Financial Statements and Supplementary Data
Consolidated Statements of Earnings, Page 39
6. Please tell us how your current presentation of Equity losses from unconsolidated joint ventures, net complies with Rule 5-03(b) of Regulation S-X. Please also consider the presentation of this line item within your periodic filings on Form 10-Q as well.
The Company notes that Rule 5-03(b)13 of Regulation S-X specifically states that “if justified by the circumstances, this item (equity in earnings of unconsolidated subsidiaries) may be presented in a different position and a different manner” than that suggested in Rule 5-03(b). Rule 5-03(b)13 further references Section 210.4-01(a), which notes that “financial statements should be filed in such form and order, and should use such generally accepted terminology, as will best indicate their significance and character in the light of the provisions applicable thereto.”
We specifically note that on Page 20 of the Company’s fiscal 2007 Form 10-K under the subheading Management Discussion and Analysis – Current Plans section, the Company states that “a number of the projects that we are currently exploring may also include some small equity investments.” The Company believes that equity earnings or losses from unconsolidated joint ventures is currently a significant line item, and may in the future be even a more significant line item, for the reader of its financial statements, as further evidenced by the Company’s inclusion of this line item in its business segment footnote to its financial statements. As a result, it is the Company’s belief that the “significance and character” of this specific line item dictates that it should be presented in a position and manner generally accepted by other similar theatre and lodging companies, so that “in light of the circumstances under which they are made, the [financial statements] are not misleading” (Section 210.4-01(a)).
In this regard, the Company has specifically reviewed the earnings statements of companies in its peer group index, as well as other large theatre and lodging companies, such as Marriott International, Inc., Starwood Hotels & Resorts Worldwide, Inc. and Cinemark Holdings, Inc. As a consequence, the Company’s decision to present Equity losses from unconsolidated joint ventures as a pre-tax line item in the “Other Income/Expense” section of the Company’s earnings statements in its Form 10-K and 10-Q filings is further supported by the fact that the Company found this presentation to be the predominant form and order used by these peer companies for this specific line item.
Definitive 14A for the fiscal year ended May 31, 2007
Election of Directors, Page
7. Please describe the business experience during the past five years of each director and each person nominated to become a director. Please refer to Item 401(e) of Regulation S-K.
Each director has held the same principal occupations and employment listed for at least the last five years. The Company will clarify this information in its proxy statement for its 2008 annual meeting of shareholders, and in all other relevant future filings.
Mr. Kevin Woody May 30, 3008 Page 5
Compensation Discussion and Analysis
Role of Our Compensation Committee, Page 11
8. We note that the committee uses benchmark data in determining compensation amounts. Please revise to identify the peer companies used and the specific compensation components used in those comparisons. Also, please clarify whether the comparisons are limited to base salaries of similarly situated executives or if other data from peer companies is also used. In your disclosure regarding base salary of your named executive officers, please clearly describe how these benchmarks compared to the base salaries awarded to each person.
Watson Wyatt provided the Company’s Compensation Committee, in connection with its compensation decisions described in the Company’s 2007 proxy statement, with proprietary and confidential general market survey data on the base salaries and total direct compensation (i.e., base salaries and bonuses) for executives that are similarly titled or hold similar positions to those of the Company’s named executive officers within the five general sector and industry categories set forth on Page 11 of the Company’s 2007 proxy statement. Watson Wyatt did not provide, and, in making its decisions, the Company’s Compensation Committee did not receive or review, and was not aware of, the identities of the individual peer group companies that comprised Watson Wyatt’s general market survey data used by the Committee.
The Company already describes on Page 11 of its 2007 proxy statement the two compensation components which the Compensation Committee receives and analyzes from the general market survey data provided to it by Watson Wyatt – namely, base salary and total direct compensation (i.e., base salary and bonus).
In order to be responsive to the Staff’s comment, the Company will expand its disclosure in its 2008 proxy statement and all other relevant future filings to more specifically describe how the Company’s named executive officers’ base salaries compare to the general market survey data on the base salaries of similarly situated executives provided to the Compensation Committee by Watson Wyatt (or any other compensation consultant used by the Committee).
Base Salary, Page 12
9. Please expand your discussion of base salary awards to explain specifically how each of the seven factors was used to determine individual base salaries. For example, under the third factor, describe each executive officer’s past and anticipated future contributions to your performance and how the committee’s evaluation of performance factored into the amount of salary awarded. Provide similarly detailed disclosure for each factor.
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FOLEY & LARDNER LLP
ATTORNEYS AT LAW
777 EAST WISCONSIN AVENUE
MILWAUKEE, WISCONSIN 53202-5306
414.271.2400 TEL
414.297.4900 FAX
www.foley.com
May 30, 2008
WRITER’S DIRECT LINE
414.297.5662
sbarth@foley.com EMAIL
VIA EDGAR AND FEDERAL EXPRESS
CLIENT/MATTER NUMBER
052560-0725
Mr. Kevin Woody
Accounting
Branch Chief
Division of Corporation Finance
U.S. Securities and Exchange Commission
100 F
Street, N.E.
Washington, DC 20549-3561
Re:
The
Marcus Corporation
Form 10-K for Fiscal Year Ended May 31, 2007
Filed August
14, 2007
Form 10-Q for the Period Ended February 28, 2008
Filed April 8,
2008
Definitive 14A
Filed September 12, 2007
File No. 001-12604
Dear Mr. Woody:
On
behalf of our client, The Marcus Corporation, a Wisconsin corporation (the
“Company”), set forth below are the Company’s responses to the comments of
the Staff (the “Staff”) of the Securities and Exchange Commission (the
“Commission”) set forth in the Staff’s letter, dated April 23, 2008 (the
“Comment Letter”), with respect to the above-referenced filings. The numbered
items set forth below repeat (in bold italics) the comments of the Staff reflected in the
Comment Letter, and following such comments are the Company’s responses (in regular
type).
Form 10-K for the fiscal
year ended May 31, 2007
General
1.
Please
correct the file number on your Form 10-K cover page to reflect the accurate
file number for your filings. Please note that your file
number for reports filed under the Securities Exchange Act of 1934 is 1-12604,
not 1-12609 as noted on your Form 10-K.
The
Company will correct its file number in all relevant future filings under the Securities
Exchange Act of 1934.
Item 1 – Business,
Page 2
2.
Please
include a cross reference to the financial information about your business
segments contained in your financial statements. We refer
you to Item 101(b) of Regulation S-K.
In
all relevant future filings, the Company will include a cross-reference to the financial
information about its business segments contained in its financial statements pursuant to
Item 101(b) of Regulation S-K.
BOSTON
BRUSSELS
CENTURY CITY
CHICAGO
DETROIT
JACKSONVILLE
LOS ANGELES
MADISON
MIAMI
MILWAUKEE
NEW YORK
ORLANDO
SACRAMENTO
SAN DIEGO
SAN DIEGO/DEL MAR
SAN FRANCISCO
SHANGHAI
SILICON VALLEY
TALLAHASSEE
TAMPA
TOKYO
WASHINGTON, D.C.
Mr. Kevin Woody
May 30, 3008
Page 2
Item 7.
Management’s Discussion and Analysis
Theaters, Page 22
3.
Please
disclose the portion of your theater revenues derived from ticket sales and
concession sales, respectively. Also, if used by
management, please disclose the average ticket price per person and discuss
whether an increase in ticket prices contributed to an
increase in revenues for the period. Similarly, please disclose the actual
amount of concession sales per person and discuss whether
the increase is attributed to increases in price or volume of sales.
The
Company specifically provided separate line item disclosures in its summary financial
results table on Page 22 of its fiscal 2007 Form 10-K setting forth the respective
portions of its theatre revenues derived from box office revenues (i.e., ticket sales) and
concession revenues for each of its last three fiscal years.
The
Company does not believe that disclosing its average ticket price per person and/or its
average concession sales per person provides any additional meaningful information to
investors to better understand the Company’s results of operations or financial
statements. On the contrary, the Company believes that such disclosure may cause it
competitive harm and may adversely affect its customer relationships and, therefore, its
results of operations and shareholder value. The Company notes, in this regard, that it
already describes the comparative period percentage changes in both its average ticket
price per person and average concession sales per person, including the reasons therefor
and the general impact that such percentage changes have had on the Company’s
comparative period theatre division revenues, so that investors may clearly understand how
and why such historical trends have impacted comparative period theatre results and may
impact future theatre results. The Company’s management uses this trend data, rather
than the nominal dollar amount of its average ticket price per person and average
concession sales per person, to analyze relevant financial performance trends in its
theatre business. The Company believes that the stock market research analysts that follow
the Company similarly effectively utilize this percentage change data to assess relevant
financial performance trends in the Company’s theatre business. However, in order to
be responsive to the Staff’s comment, in relevant future filings, the Company intends
to enhance its disclosures regarding the relative quantitative impact on its theatre
division revenues resulting from comparative period changes in its average ticket price
per person and average concession sales per person. Specifically, the Company intends in
relevant future filings to quantify the aggregate dollar amount and percentage impact that
such comparative period relative percentage changes in each of its average ticket price
per person and average concession sales per person have had on the Company’s
comparative period theatre division revenues. Similarly, in order to be responsive to the
Staff’s comment, the Company also intends in relevant future filings to provide more
descriptive information on the factors impacting such comparative period changes
(including, with respect to changes in comparative period average concession sales per
person, the relative extent to which such changes were the result of changes in price
and/or sales volume). The Company believes that providing this additional disclosure
regarding the trends and factors which are similarly assessed by the Company’s
management will further help enhance investors’ understanding of the trends then
affecting its historical comparative period theatre results and which may impact its then
expected future theatre division results.
Mr. Kevin Woody
May 30, 3008
Page 3
Hotels and Resorts, Page
25
4.
Please
disclose actual amounts of RevPAR, occupancy, and average daily room rate for
each of the periods reported. Currently, you disclose only
the percentage change.
The
Company does not believe that disclosing the actual amounts of its comparative period
RevPAR, occupancy and/or average daily room rate provides any additional meaningful
information to investors to better understand the Company’s results of operations or
financial statements. On the contrary, the Company believes that such disclosure may cause
it competitive harm and may adversely affect its customer relationships and, therefore,
its results of operations and shareholder value. The Company notes, in this regard, that
it already describes the comparative period percentage changes in its RevPAR, occupancy
and average daily room rate, including the reasons therefor and the general impact that
such percentage changes have had on the Company’s comparative period hotels and
resorts division revenue, so that investors may understand how and why such historical
trends have impacted comparative period hotels and resorts division results and may impact
future hotels and resorts division results. The Company’s management uses this trend
data, rather than the nominal amount of its RevPAR, occupancy and/or average daily room
rate, to analyze relevant financial performance trends in its hotels and resorts business.
The Company believes that the stock market research analysts that follow the Company
similarly effectively utilize this percentage change data to assess relevant financial
performance trends in the Company’s hotels and resorts business. However, in order to
be responsive to the Staff’s comment, in relevant future filings, the Company intends
to enhance its disclosures regarding the relative quantitative impact on its hotels and
resorts division revenues of changes in its comparative period RevPAR, occupancy and/or
average daily room rate. Specifically, the Company intends in relevant future filings to
further quantify the aggregate dollar amount and percentage impact that such comparative
period relative percentage changes have had on the Company’s comparative period
hotels and resorts division revenues. The Company believes that providing this additional
disclosure regarding the trends and factors which are similarly assessed by the
Company’s management will further help enhance investors’ understanding of the
trends then affecting its historical comparative period hotels and resorts division
results and which may impact its then expected future hotels and resorts division results.
5.
Please
furnish us with copies of the relevant portions of the Smith Travel Research
reports that you reference in the last paragraph on Page
25 and again in the third paragraph on Page 27. Please mark the copies to
highlight the information that supports your disclosure.
Accompanying
the copy of this response provided to the Staff by Federal Express, we are supplementally
providing a copy of the relevant portions of the referenced Smith Travel Research reports,
together with the Company’s spreadsheet which compiles and aggregates these monthly
statistics so that appropriate and accurate fiscal year-over-fiscal year comparisons may
be made by the Company. Such reports have been highlighted to reflect the information that
is compiled by the Company to support the referenced disclosure.
Mr. Kevin Woody
May 30, 3008
Page 4
Item 8. Financial
Statements and Supplementary Data
Consolidated Statements
of Earnings, Page 39
6.
Please
tell us how your current presentation of Equity losses from unconsolidated
joint ventures, net complies with Rule 5-03(b) of Regulation S-X.
Please also consider the presentation of this line item within your periodic
filings on Form 10-Q as well.
The
Company notes that Rule 5-03(b)13 of Regulation S-X specifically states that “if
justified by the circumstances, this item (equity in earnings of unconsolidated
subsidiaries) may be presented in a different position and a different manner” than
that suggested in Rule 5-03(b). Rule 5-03(b)13 further references
Section 210.4-01(a), which notes that “financial statements should be filed in
such form and order, and should use such generally accepted terminology, as will best
indicate their significance and character in the light of the provisions applicable
thereto.”
We
specifically note that on Page 20 of the Company’s fiscal 2007 Form 10-K under
the subheading Management Discussion and Analysis – Current Plans
section, the Company states that “a number of the projects that we are currently
exploring may also include some small equity investments.” The Company believes that
equity earnings or losses from unconsolidated joint ventures is currently a significant
line item, and may in the future be even a more significant line item, for the reader of
its financial statements, as further evidenced by the Company’s inclusion of this
line item in its business segment footnote to its financial statements. As a result, it is
the Company’s belief that the “significance and character” of this specific
line item dictates that it should be presented in a position and manner generally accepted
by other similar theatre and lodging companies, so that “in light of the
circumstances under which they are made, the [financial statements] are not
misleading” (Section 210.4-01(a)).
In
this regard, the Company has specifically reviewed the earnings statements of companies in
its peer group index, as well as other large theatre and lodging companies, such as
Marriott International, Inc., Starwood Hotels & Resorts Worldwide, Inc. and Cinemark
Holdings, Inc. As a consequence, the Company’s decision to present Equity losses from
unconsolidated joint ventures as a pre-tax line item in the “Other
Income/Expense” section of the Company’s earnings statements in its
Form 10-K and 10-Q filings is further supported by the fact that the Company found
this presentation to be the predominant form and order used by these peer companies for
this specific line item.
Definitive 14A for the
fiscal year ended May 31, 2007
Election of Directors, Page
3
7.
Please
describe the business experience during the past five years of each director
and each person nominated to become a director. Please
refer to Item 401(e) of Regulation S-K.
Each
director has held the same principal occupations and employment listed for at least the
last five years. The Company will clarify this information in its proxy statement for its
2008 annual meeting of shareholders, and in all other relevant future filings.
Mr. Kevin Woody
May 30, 3008
Page 5
Compensation Discussion
and Analysis
Role of Our Compensation
Committee, Page 11
8.
We
note that the committee uses benchmark data in determining compensation
amounts. Please revise to identify the peer companies used
and the specific compensation components used in those comparisons. Also,
please clarify whether the comparisons are limited to base
salaries of similarly situated executives or if other data from peer companies
is also used. In your disclosure regarding base salary of your named executive officers, please clearly
describe how these benchmarks compared to the base salaries awarded to each person.
Watson
Wyatt provided the Company’s Compensation Committee, in connection with its
compensation decisions described in the Company’s 2007 proxy statement, with
proprietary and confidential general market survey data on the base salaries and total
direct compensation (i.e., base salaries and bonuses) for executives that are
similarly titled or hold similar positions to those of the Company’s named executive
officers within the five general sector and industry categories set forth on Page 11 of
the Company’s 2007 proxy statement. Watson Wyatt did not provide, and, in making its
decisions, the Company’s Compensation Committee did not receive or review, and was
not aware of, the identities of the individual peer group companies that comprised Watson
Wyatt’s general market survey data used by the Committee.
The
Company already describes on Page 11 of its 2007 proxy statement the two compensation
components which the Compensation Committee receives and analyzes from the general market
survey data provided to it by Watson Wyatt – namely, base salary and total direct
compensation (i.e., base salary and bonus).
In
order to be responsive to the Staff’s comment, the Company will expand its disclosure
in its 2008 proxy statement and all other relevant future filings to more specifically
describe how the Company’s named executive officers’ base salaries compare to
the general market survey data on the base salaries of similarly situated executives
provided to the Compensation Committee by Watson Wyatt (or any other compensation
consultant used by the Committee).
Base Salary, Page 12
9.
Please
expand your discussion of base salary awards to explain specifically how each
of the seven factors was used to determine individual base salaries.
For example, under the third factor, describe each executive officer’s
past and anticipated future contributions to your performance and
how the committee’s evaluation of performance factored into the amount
of salary awarded. Provide similarly detailed disclosure for each factor.
The
sev