The Marcus Corporation (NYSE:MCS) Q3 2023 Earnings Conference Call November 1, 2023 11:00 AM ET
Company Participants
Chad Paris – CFO and Treasurer
Greg Marcus – Chairman, President and CEO
Conference Call Participants
Eric Wold – B. Riley Securities
Mike Hickey – Benchmark Company
Jim Goss – Barrington Research
Chris Potter – Northern Border Investments
Operator
Good morning, everyone, and welcome to The Marcus Corporation Third Quarter Earnings Conference Call. My name is Alex, and I’ll be your operator for today. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session towards the end of the conference. (Operator Instructions) As a reminder, this conference is being recorded.
Joining us today are Greg Marcus, Chairman, President and Chief Executive Officer; and Chad Paris, Chief Financial Officer and Treasurer of The Marcus Corporation.
At this time, I would like to turn the program over to Mr. Paris for his opening remarks. Please go ahead.
Chad Paris
Thanks, Alex, and good morning, everyone. Welcome to our fiscal 2023 third quarter conference call. I need to begin by stating that we plan to make a number of forward-looking statements on our call today, all of which we intend to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act.
Our forward-looking statements may generally be identified by our use of words such as we believe, anticipate, expect or words of similar import. Our forward-looking statements are subject to certain risks and uncertainties, which may cause our actual results to differ materially from those expected. Listeners are cautioned not to place undue reliance on our forward-looking statements. The risks and uncertainties, which could impact our ability to achieve our expectations identified in our forward-looking statements are included under the heading Forward-Looking Statements in the press release we issued this morning, announcing our fiscal 2023 third quarter results and in the Risk Factors section of our Fiscal 2022 Annual Report on Form 10-K, which you can access on the SEC’s website.
We will also post all Regulation G disclosures when applicable on our website at marcuscorp.com. The forward-looking statements made during this conference call are only made as of the date of this conference call and we disclaim any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.
In addition, we routinely post news releases and other information regarding developments at our company that impact our investors, customers, vendors and other stakeholders. You should look to our website marcuscorp.com as an important source of information regarding our company.
We also refer you to the disclosures we provided in today’s earnings press release regarding the use of adjusted EBITDA, a non-GAAP measure used in evaluating our performance, and its limitations. A reconciliation of adjusted EBITDA to the nearest GAAP measure is provided in today’s release.
All right. With that behind us, let’s begin. This morning, I’ll start by spending a few minutes sharing the results from our third quarter with you and discuss our balance sheet and liquidity. I’ll then turn the call over to Greg who will focus his prepared remarks on where our businesses are today and what we are seeing ahead. We’ll then open up the call for questions.
This morning we reported another quarter of year-over-year revenue and earnings growth in both of our divisions. In theatres, a blockbuster movie slate that drove higher attendance combined with continued increases in average ticket price and average concession revenue per customer to deliver the division’s 25% revenue growth. In our Hotel division, comparable hotel revenues continue to grow with improvement in both occupancy and average daily rates.
Turning to the numbers. I’ll start with our consolidated results. Total revenues were $208.8 million in the third quarter of fiscal 2023, an increase of 13.7% compared to the third quarter of fiscal 2022.
Operating income was $20.9 million in the third quarter, an increase of 133.9% compared to the prior year quarter. Net earnings for the third quarter were $12.2 million compared to $3.3 million in the third quarter last year.
And finally, adjusted EBITDA for the third quarter was $42.3 million, a nearly 52% increase from the prior year’s third quarter.
We provided a breakdown of our third quarter numbers by segments in our press release and as we will discuss today, our earnings growth in the quarter was driven by strong results from both of our businesses, partially offset by the fact that we had sold one of our hotels late last year, impacting our comparisons this year.
Turning to our segment results. In Theaters, our third quarter fiscal 2023 total revenue of $126.6 million, increased 25% compared to the prior year third quarter. Comparable theater admission revenue increased 29.8% over the third quarter of 2022 with comparable theater attendance, right, increasing 15.6%. The increase in attendance primarily resulted from stronger performances from the top three blockbuster films during the third quarter of 2023 which were Barbie, Oppenheimer, and Sound of Freedom.
While the film slate for the quarter included only one more wide-release film compared to the third quarter of 2022, it featured a release calendar and box office that went deeper into the summer and it was more spread across the quarter, allowing films to perform better.
According to data received from Comscore and compiled by us to evaluate our fiscal 2023 third quarter results, United States box office receipts increased 37.6% during our fiscal 2023 third quarter compared to U.S. box office receipts during the third quarter of fiscal 2022, indicating that our comparable theater admission revenue growth lagged by approximately 7.8 percentage points.
However, we believe what looks like underperformance is mostly a reflection of exhibitors and other parts of the country, playing catch up in 2023, following our earlier recovery last year in our primarily Midwestern markets where we saw audiences return sooner.
We believe this is illustrated by the recovery in our admission revenues relative to pre-pandemic periods in fiscal 2019 compared with the recovery of the U.S. box office. During the third quarter of fiscal 2023, our comparable theaters’ admission revenues were 93.4% of admission revenues in the third quarter of fiscal 2019, which compares to a 93.5% U.S. box office recovery during the same period.
During the first three quarters of fiscal 2023, our comparable theaters’ admission revenues were 85.2% of admission revenues in the first three quarters of fiscal 2019, which compares to an 83% U.S. box office recovery during the same period, indicating that our recovery in admission revenues has been in line with and outperformed the recovery of the industry during 2023.
We also believe our performance in the quarter was partially attributable to an unfavorable film mix this year that was more appealing to audiences in other parts of the U.S. outside of our primarily Midwestern markets compared to a favorable film mix during the third quarter of fiscal 2022 that included Top Gun: Maverick and Minions: The Rise of Gru, two films that drove our theater circuit to outperform the national results last year in the third quarter.
Our average admission price increased by 12.8% during the third quarter of fiscal 2023 compared to last year. The increase in average admission price in the quarter was primarily driven by the favorable impact of full schedule pricing actions taken in the last year in response to inflation, the impact of the changes to our Value Tuesday promotion effective at the end of the first quarter of this year, and by a film mix featuring more films for adult audiences at higher ticket prices.
Our average concession, food and beverage revenues per person at our comparable theaters increased by 6.5% during the third quarter of fiscal 2023 compared to last year’s third quarter. Higher check averages, including the impact of higher menu prices, drove the increase in our concession, food and beverage per caps as we are still seeing the impact of inflationary price increases implemented during the last year and the favorable impact of changes to our Value Tuesday promotion.
Our top 10 films represented approximately 75% of the box office in the third quarter of fiscal 2023 compared to 83% for the top 10 films in the third quarter last year. This more balanced film slate combined with our industry-leading PLF penetration, resulted in a decrease in overall film cost as a percentage of admission revenues. Theater division adjusted EBITDA of $26.7 million during the third quarter of fiscal 2023 increased approximately 114% compared to the prior year third quarter on our higher revenues.
Finally, during the quarter, we closed three underperforming theaters as part of our ongoing evaluation of individual theater performance and our footprint. The closure of these locations is accretive to earnings and cash flow and the results of these theaters are excluded from our comparable theater financial metrics discussed today.
Turning to our Hotels & Resorts division. Revenues were $82.1 million for the third quarter of fiscal 2023 and were nearly flat compared to the prior year. The sale of The Skirvin Hilton late in the fourth quarter of fiscal 2022 had a $4 million negative impact on revenues in the third quarter of fiscal ’23 compared to the third quarter of fiscal 2022.
On a comparable hotel basis, we continued our trend of revenue growth with total revenues in the third quarter of fiscal 2023 increasing $3.8 million or 4.9%. Total revenue before cost reimbursements at our seven comparable owned hotels increased over $2.8 million or 4.1% over the third quarter of fiscal 2022.
RevPAR for our comparable owned hotels grew 5.5% during the third quarter compared to the prior year. According to data received from Smith Travel Research, comparable upper upscale hotels throughout the United States experienced an increase in RevPAR of 3.2% during our third quarter compared to the third quarter of fiscal 2022, indicating that our hotels outperformed the industry by approximately 2.3 percentage points.
When comparing our RevPAR results to comparable competitive hotels in our markets, the comparable competitive hotels experienced an increase in RevPAR of 4.7% for the third quarter of fiscal ’23 compared to the third quarter of fiscal 2022, indicating that our hotels outperformed their competitive set by nearly 1 percentage point.
Breaking out the third quarter numbers for the comparable owned hotels more specifically, our overall RevPAR increased during the fiscal 2023 third quarter compared to the third quarter of last year was due to a 2.7% increase in our average daily rates or ADR and an overall occupancy rate increase of 2 percentage points. Our average fiscal 2023 third quarter occupancy rate for our owned hotels was 76.5%.
Finally, our Banquet and Catering operations continued to perform well. Food and beverage revenue at our comparable owned hotels was up 1.8% in the third quarter of fiscal 2023 compared to the prior year quarter and was negatively impacted by approximately 1 percentage point due to the ballroom renovations at The Pfister Hotel during the quarter.
Hotel division adjusted EBITDA of $19.4 million for the third quarter of 2023 increased $400,000 or approximately 2%. The sale of The Skirvin Hilton had a $500,000 negative impact on adjusted EBITDA in the third quarter of fiscal ’23 compared to the prior year third quarter. Excluding this impact, comparable hotel adjusted EBITDA in the third quarter of fiscal 2023 increased $900,000 or 4.7% on higher revenues.
Shifting to cash flow and the balance sheet. Our cash flow provided by operations was $21.3 million in the third quarter of fiscal 2023, an increase of $16.2 million or more than three times our prior-year third quarter cash flow from operations. Total capital expenditures during the third quarter of fiscal 2023 were $9.9 million compared to $11.1 million in the third quarter of fiscal 2022, and were impacted by timing of cash payments for projects when compared to the prior year.
A large portion of our capital expenditures during the third quarter were invested in the guest rooms and meeting space renovation at the Grand Geneva Resort & Spa and the meeting space renovation at The Pfister Hotel, with the balance of capital expenditures going to maintenance projects in both businesses.
Based on our current expectations for the timing of capital projects, we expect capital expenditures of $35 million to $40 million for fiscal 2023 with our lower estimate for the year due to changes in timing of projects. We ended the third quarter with $36 million in cash and over $256 million in total liquidity with a debt to capitalization ratio of 27% and net leverage of 1.3 times net debt to adjusted EBITDA.
Subsequent to the end of the third quarter, we announced that we completed the refinancing of our revolving credit facility. This new $225 million five-year facility will extend our maturities until October 2028 and is an example of our proactive approach to maintaining our strong balance sheet. Our new revolver, which is currently undrawn, ensures that we have significant liquidity and financial flexibility to move quickly when opportunities to invest in future growth arise.
I would like to thank our lender group for our strong long-term relationships and for their continued support.
With that, I will now turn the call over to Greg.
Greg Marcus
Thanks, Chad. Good morning, everyone.
As I shared in our last quarterly call, the third quarter got off to a strong start in July. In Theaters, a string of blockbusters drove huge audiences to see movies on the big screen. And we had a deeper slate of films for the rest of the summer than we did a year ago.
In Hotels, favorable weather and solid leisure demand continued to support strong rates and improving occupancy. I’m happy to share that the positive trends we saw in July continued through the end of the summer, and we had a great third quarter with both of our businesses contributing to our revenue and earnings growth. Our teams executed really well, serving our customers with excellence during our seasonally busiest quarter of the year.
The third quarter that we are reporting today once again continues our trend of year-over-year improvement and we’re very happy to share these results with you. I’ll start with Theaters. This quarter, both higher attendance and strong growth in per caps drove our results. While the second quarter this year included a few films that missed the mark and third quarter included a few films that exceeded expectations in a big way.
Strong performances from the cultural phenomenon known as Barbenheimer and Sound of Freedom drove customers out the theaters for these must-see films, while a steady cadence of movie releases continued into late summer and supported the habit of movie going, resulting in attendance growth over 15%.
The impressive performance of these films underscored an audience appetite for a variety of narratives and it was a great reminder to all of us in the entertainment industry of the power of theatrical exhibition and building awareness of great movies. We continued our trend of significant increases in per person revenues with our admission revenues per person growing nearly 13% year-over-year and our concessions, food and beverage per caps growing over 6%.
As we previously shared, our strategic pricing initiatives including our Value Tuesday promotion changes, continued to favorably impact both admissions per caps and concession, food and beverage per caps. We also have been successful driving admission per caps by leveraging our expansive footprint of premium large format screens.
During the third quarter, nine of the top 10 movies were on PLF screens on opening weekend, where eight of these nine films opening on PLF screens during the quarter, 40% or more of our opening weekend box office came from PLF showings, with four films grossing more than 60% of our opening weekend box office on PLFs.
In addition, according to Comscore data, on opening weekend, Marcus Theatres led the industry in gross box office PLF percentage on all nine of the films opening on PLFs in the third quarter. Our proprietary UltraScreen and SuperScreen provide us with significant flexibility in scheduling multiple films on our PLF screens, particularly in theater locations where we have multiple PLFs.
As we look ahead, the fourth quarter in our Theater division is once again off to a good start with growth over last year, led, of course by Swift Eras, Taylor Swift: The Eras Tour, a constant film that debuted as the second highest October opening weekend of all time for any kind of movie and continues to play well in our circuit with our market share of total box office growing each week.
Going to see Eras wasn’t just going to see a movie, it was an experience that became a pop culture event. Once again, we are leveraging our PLF screens to present the film the way our customers want to see it most, dancing in the aisles in front of a giant screen with immersive Dolby Atmos sound. In fact, we are leading the industry with over 50% of Eras’ gross box office coming from PLF screens for each of the three weekends since opening.
While Taylor Swift isn’t a class Rome, we do believe that Eras is an example of the breadth of content we can play. Another big music icon will leverage the appeal of theatrical experience to connect with fans through a concert film in early December with Renaissance, a film by Beyonce.
As we look ahead to the rest of the year, the holiday film slate includes Trolls, band Together, Wish, Wonka, Aquaman and The Lost Kingdom, and Migration, a strong set of family films that should play well to our Midwest audiences. The film slate is rounded out with a healthy dose of content targeting adult audiences that we’re excited about, including The Marvels, Hunger Games, Ballad of Songbirds and Snakes, Napoleon and The Color Purple. Last quarter, I provided some thoughts on the strikes in Hollywood, and our view on this topic remains largely the same.
The disruption from the strikes is not helpful. As expected there have been some shifts in the release calendar, and we will not have better visibility to the ultimate impact on the 2024 film slate until the strike is settled and film production resumes. At the end of the day, this remains a short term supply chain disruption. The product isn’t going away or skipping theatrical exhibition, it’s getting moved around and shifted out.
With the writer’s strike settled, the beginning of the supply chain is working again restocking the script inventory. We are encouraged by the very active negotiations in the last week between the Screen Actors Guild and the studios, and while we have no insight into the discussions, we are cautiously optimistic for a resolution in the near term.
Shifting to our hotel and resorts division, you’ve seen the segment numbers and Chad shared some additional detail, including the bridge from our reported results to our comparable hotel results following the sale of the Skirvin Hilton Light last year. This quarter is typically our strongest with the summer travel season at its peak, and this year was no different. As you may recall, last year the hotel division posted record results for any third quarter, either pre or post pandemic.
This year, our hotels team broke that record again with 19.4 million of adjusted EBITDA. Despite having one less hotel. This level of success speaks to both the high level of execution by our team and the quality of our hotel assets. There are a few hotel division highlights in the third quarter that I’d like to point out. Overall revenue before cost reimbursements at our comparable properties grew over 4.1% compared to the prior year.
We outperformed both the national upper upscale RevPAR growth and RevPAR growth of our competitive sets. We continue to see strong average daily rates and improving our occupancy. RevPAR grew at six of our seven of our comparable owned hotels, with average daily rate growth at five of our seven hotels and occupancy growth at four out of seven hotels, resulting in overall RevPAR growth of 5.5%. Occupancy grew on both weekends and weekdays with weekends almost back to pre-pandemic levels.
While the trend of leisure demand returning to pre-pandemic levels continues following record demand in fiscal 2022, overall leisure demand remains healthy and our properties continue to capture our share of leisure travel.
Group demand in the quarter continued to increase with weekday and weekend growth increasing our Group rooms revenue to approximately 41% of our total rooms revenue in the third quarter of fiscal 2023, compared to approximately 39% in the third quarter last year. This compares to our pre-pandemic Group mix of approximately 44% in the third quarter of 2019.
Group booking trends remain positive with our Group room revenue bookings for the remainder of fiscal 2023 or group pace in the year – for the year running approximately 11% of where we were at the same time last year. Group pace for fiscal 2024 is running approximately 14% of where we were at the same time last year for fiscal 2023. In addition, Banquet and Catering pace for the remainder of fiscal 2023 and fiscal 2024 is similarly running ahead of where we were at this time last year.
Finally, I would like to recognize our hotels team for several awards that our properties recently received. As many in our hospitality industry know, the Conde Nast Traveler’s Readers’ Choice Awards are the longest running and most prestigious recognition of excellence in the travel industry.
And in October, our properties won several of them. In Milwaukee, The Pfister Hotel was named the number two top hotel in the Midwest, and Saint Kate was named the number four top hotel in the Midwest. The Kimpton Hotel Monaco Pittsburgh was recognized as the number nine top hotel in the Mid-Atlantic and The Garland in North Hollywood, California was rated the number 16 top hotel in Los Angeles.
In addition, The Pfister Hotel also recently received the USA Today Reader’s Choice Award as the number six best historic hotels in the United States. We are incredibly proud of these awards won by our hotels, our part rooms and amenities, what truly makes a hotel special is the hospitality and experience our guests have while they stay with us. We win these awards because of the incredible effort and care that our associates deliver each day to make our guests stay extraordinary. I’d like to thank and congratulate the hotel team on a job well done.
And while I’m tossing out congratulations, I also want to reflect on Chad Paris and his team’s great job with our banking facility. That was impressive work in this environment, and it speaks to our company’s long standing foundational belief in the managing the strength of our balance sheet.
Before we open up the call for questions, I want to once again express my appreciation for our dedicated associates at The Marcus Corporation. Their outstanding work and commitment to serving our customers is responsible for our success. We appreciate all that they do every day. So, on behalf of our Board of Directors and our entire executive team, thank you to all of our associates.
And with that, at this time, Chad and I would be happy to open up the call for any questions you may have.
Question-and-Answer Session
Operator
(Operator Instructions) Our first question for today comes from Eric Wold of B. Riley Securities. Your line is now open. Please go ahead.
Eric Wold
Hi, good morning, everybody. Thank you for taking my questions. A couple of questions, I guess one, following the three theaters that were closed in the quarter, anything left on that front to close? And then how is the acquisition or new build pipeline for theater shaping up at this point?
GregMarcus
I’m sorry. What – I didn’t hear. What did you say about the three that we closed? What was your specific? I lost..
Chad Paris
Any more…
Eric Wold
Just if there’s anything else that needs to be closed?
GregMarcus
Not that we know of. I mean, again, these were very special situations in a market that we’ve got, you know, very good coverage in, and, you know, that business is just going to be picked up in other theaters. And these theaters were – you know, one was a lease that was ending, and the other two were, you know, we just – we had made the decision that we weren’t going to make the investments that you need to have. You know, how we feel about having our fiscal plans in top shape and competitive. I think that – I think we were talking about I think it puts our recliner penetration, it’s got to be over 90% now because those didn’t have recliners.
Eric Wold
And then – new build or acquisitions.
GregMarcus
No new builds. And, you know, there is – I would say that, you know, we’re starting to see some stuff pop up. You know, nothing that we’ve had an interest in yet, but it feels like, you know, that the ice is breaking up a little bit, but I have nothing to report to you.
Eric Wold
Got it. And then shifting to the Hotel segment. Any update on the decision around, you know, Milwaukee Hilton? Can you remind us kind of what the – any deadline is with that and kind of maybe what ultimately needs to be done to that property to kind of get near to the convention center opening next year or the expansion opening next year?
Chad Paris
Yes, Eric, we’re continuing to work on it. You know, this is one that we hope to have some idea of the path forward by the end of the year and something to share on our next call in late February. But again, it’s one where we’re trying to make the returns make sense and with a hotel of that size, the capital investment is significant and, you know, we’re working on it.
So no update right now, but hopefully we’ll have something next quarter.
Eric Wold
But that’s not something where a decision – where there’s a deadline looming. You’ve got time on that one, correct?
GregMarcus
Well, no. I mean we have to – we do have to make – there is no – we don’t have a deadline to report, but there is – look, there’s a lot of things that, you know, that we have to take into account, and, you know, that includes, you know, just the fact that we have – the community has just made a big investment in a new convention center and – or, you know, an addition to the convention center and refurbishing the older section. And, you know, it would be helpful to have this complement that.
Eric Wold
Understood. Thank you, both.
Operator
Thank you. Our next question comes from Mike Hickey of Benchmark Company. Your line is now open. Please go ahead.
Mike Hickey
Hi, Greg, Chad. Good morning, guys. Great quarter. Thanks for taking our questions here. I think just two from us. One, obviously, Chad, Greg, you guys don’t guide ’24. Your peer-set doesn’t either. But just curious, so this – as much as you can sort of frame for us your ’24 growth opportunity on revenue as you see it today. Obviously, there’s some moving pieces on theater side in terms of the strike and impact, et cetera. I’m curious if you think – you also have some leverage in the model in ’24 and beyond. That’s the first question.
Second question is, it sounds like on the hotel side, you’ve got some pretty good leading indicators there on growth. And so maybe that sort of offsets this question. But just curious, an update on the consumer specifically within that segment. Obviously, the business side being more impacted by the economy and sentiment, and leisure here seems like it’s had a heroic effort, Greg, over the last year or two. Just curious if the economy or sentiment or just the pullback in spend is impacting or you think it could impact that piece of your business. Thanks, guys.
GregMarcus
Sure. Well, you know, actually we’re going to be holding a seance next week to figure out what the theater business is going to look like next year. We just don’t know. We have no, you know, I mean, we don’t even know when we know what’s coming, you know. It is a – as we talked about on the call, right, was – in the prepared remarks, nobody could have guess – nobody ever can guess what a specific as movie is going to do. And if someone would have told me that Barbie was going to just absolutely go bananas and that other films were not going to perform as expected but there were some.
You just, you know, there’s no telling. And so it all comes down to the number of films released and we don’t, you know, in Hollywood, as you know, is not really disclosing, you know, so like, there’s been some moves, you know. We know that Dune 2 moved to next year. Well, okay, that’s going to fill a little bit of a hole. It left us with a little bit of a hole, but all of a sudden Taylor Swift showed up, you know, She rode in on a horse to save the day.
So, you know, we just – it is just a business where you don’t know will ultimately come down to the number of films released. You know, if you look at the stats this year, which I think is some great stats to look at. We have about 15% less films released than pre-pandemic and we’ve got about a 15% decline in box office compared to pre-pandemic. So – and that’s an increase from last year.
So as the pipeline gets refilled, you know, business will come back. And you know us. We’re not looking quarter to quarter, we’re looking at the overall, you know, where is the business trending overall. And that’s how we see that.
On the hotel side, you know, we – the leisure traveler has, you know, I think the revenge travel period is over, but people are still traveling and want to go about and we still have a strong leisure business. But as we talked about today, our pace for Group business is looking more solid, you know, as we look, you know, is improved over last year.
You know, in Milwaukee specifically, this market is going to see some real positive benefits from the Republican convention that’s coming and the opening of the convention center, which again, not only speaks to just next summer, but really long term. That’s a big – that was over a $400 million investment in this market, so – in the convention center. So, you know, good things in the long run.
Mike Hickey
Greg, just a quick follow-up. You can’t control the fan product, obviously, I wish you could, that’d be great.
GregMarcus
I think, none of us.
Mike Hickey
But on your screen count, just to sort of piggyback off the first question you look at, obviously, you’re optimizing here, which is a good thing, and it’s accretive, which is also a really good thing. But when you look at your screen count, your network, you’re sorted down looks like 10% versus where you were pre-pandemic. And of course, you moved the other direction historically and created a lot of value. And I know that sounds like you’re incrementally more positive maybe on the M&A market, but just curious if, philosophically or otherwise, you’re still motivated here to grow your screen count.
And when you look at, you know, the deals that are starting to come through, you say you’re not interested. Is that you’re not interested, say, in the asset that you’re looking at? Is it the price? Is it both? Is it protecting your balance sheet, just given how much you still don’t know about ’24 slate, maybe the economy? Just curious because, you know, we hold the 79 theaters through, you know, the next couple of years. I think it’s less appealing than baking in some sort of M&A as part of your philosophy in driving growth. Thanks, guys.
GregMarcus
Look, at the end of the day, it is ultimately – I’ll work backwards on what we would acquire for anything. It would be simply – it has to have good economics. And we’re not seeing the economics that we’d want to see at this point. And the – because at the end of the day, we believe in growth, you know, that we believe that it’s important to grow our businesses.
And the – so that’s the goal. But on the other hand – but really, the end of day is to have the most cash flow at the bottom line. You know, it feels good to say that I’m a certain size, but I’d rather have more cash flow at the bottom line. And, you know, that’s how we think about stuff, and so – but we can do both. But we are just going to have – but we’ll be patient and deliberate as we’ve always have been, and then when we see the opportunities, we’ll move.
Mike Hickey
Thanks, guys.
Chad Paris
Thanks, Mike.
Operator
Thank you. Our next question comes from Jim Goss of Barrington Research. Your line is now open. Please go ahead.
Jim Goss
All right, thanks much. You mentioned earlier in explaining why the apparent underperformance, despite the strong gain in revenues, might have related somewhat to your recovering sooner than the rest of the industry, which recovered a little later. Are you – do you think you’re now running at what you might consider a more comparable basis such that the comps would be more true going forward?
Chad Paris
It seems like it, Jim. If you look at the comparisons to 2019 that I shared on the Call, you’ll notice that we were basically in line in the third quarter, but still ahead on a year-to-date basis. So that catch-up has been progressing throughout the course of the year.
And, you know, you remember we were open much earlier. So rehabitualizing the customer to movie going, I think, happened in our circuit sooner, and that certainly benefited us in 2022 last year, which was evidenced by the outperformance numbers that we reported a year ago. So it seems like we’re – everybody is sort of getting back on par here as we get to the latter part of the year.
GregMarcus
Yes, I think it just gets modulated by…
Jim Goss
Okay.
GregMarcus
I think it just gets modulated by now by product. You know, It’s not going to be huge amounts of, you know, but it just sort of tilts.
So, for example, we – as we talked about in the remarks, a good slate of family stuff should adhere to our benefit, you know, over the – you know, for the holidays.
Chad Paris
Which hurt us in the third quarter comparison….
Jim Goss
Okay.
Chad Paris
Versus Q3 last year because we had two films that we pointed out that where we really outperformed the market versus the mix that we had this year, which we did well on, but not as well as we did in terms of overperformance last year.
Jim Goss
All right. And a couple of questions about the cluster of films that sort of led the way in the summer. Barbenheimer and Sound of Freedom sort of sucked up a lot of the oxygen in the room. It seemed like Mission Impossible was one of the odd men out, and maybe the Indiana Jones movie did a little bit better, but not quite as well. With your collection or your – of multiple PLF screens, were you able to take better advantage of Mission Impossible than was true in the industry as a whole? Or did it also wind up being sort of squeezed out a little bit in your theaters as well?
GregMarcus
I don’t remember off top of my head exactly how it played out with that. I – look, I think it still ended up getting a little pinched, but we had more opportunity than anybody else, but it was – it didn’t get to have the same.
Now, by the way, Mission Impossible, if you look at the history of Mission Impossible, we all went into this. Again, this is why I said, we – you know, we should have a regular weekly seance to figure out what the films are going to do to make predictions, because a bottoms up analysis is extremely challenging in this industry.
And if you look at the history of Mission Impossible movies, it actually wasn’t a tremendous, you know, underperformance, but it’s Tom Cruise. We were all thrilled with what he did last year, with what’s it called with Top Gun. Very optimistically. But, but by the way, I love Mission Impossible. I watched that movie over and over.
Chad Paris
Yes, Jim, maybe I can add just a little color because I’ve got the numbers in front of me. I mean, we led the industry with Mission Impossible on our PLF screen. 67% of our opening weekend box on that film came from PLF, but you had Barbie and Oppenheimer debuting the same weekend shortly thereafter, and we used all of our PLFs in that opening weekend, essentially for those two films. So I think the Mission Impossible was probably hurt, really, just by the calendar, more so than anything else. It didn’t get a share of PLFs once those other two films premiered.
Jim Goss
All right. And one other thing in that area, IMAX took an outsized share of Oppenheimer box office. It really pushed that particular film and did really well with it. I’m wondering if that had any impact on what you feel you might have taken or was it not really that much of a comp issue in your particular markets?
And also related to that, they’re bringing back Oppenheimer to the biggest screens. Are you thinking of doing something similar given the lack of some of the new content right now?
Chad Paris
So IMAX, you know, led with Oppenheimer on the weekend that those films debuted. We had the ability to play both Barbie and Oppenheimer on our PLF screens, particularly because we have a lot of multi PLF locations and because we were doing some flexible scheduling with those two films. So as I look at how we performed on PLFs, both of those films, I think, you know, we got more than our share, certainly of box office from PLFs.
Jim Goss
Okay. And on the hotel side, any construction status update aside from the ballroom at The Pfister? Are there any other things going on? And with that completion of that project, are you looking for some pretty good comps going forward with the renovated ballroom?
Chad Paris
I’ll start with the last part first. The sales teams have had some really nice success in selling that space in bookings, and we’ll see that over the next couple of years. But it, you know, it’s been really well received, particularly for social events.
Active construction projects, we are kicking off the meeting space renovation here later in the quarter at Grand Geneva. And then we also have the rooms renovation at Pfister, which will begin right after the holiday. So that – and that’ll continue throughout the course of the spring and end with some of the common space and lobby renovations later in the spring. So the entire renovation at the hotel will be done before the RNC convention next summer. So there’s quite a bit of construction activity still happening in the hotel business.
GregMarcus
And it’s the original part of the Pfister building that’s getting the rooms renovation, not the whole hotel. The other hotel was the…
Jim Goss
Okay.
GregMarcus
Tower was done pre-pandemic. Yes.
Jim Goss
All right, that’s it for now. Thanks. Thanks very much.
Operator
(Operator Instructions) Our next question comes from Chris Potter of Northern Border Investments. Chris, your line is now open. Please go ahead.
Chris Potter
Hi, guys. I was just thinking about how well your business is cooking along. And in terms of revenue, with a couple of exceptions, a couple of quarterly exceptions, in 2019, this looks like this most recent quarter revenue was the highest in the company’s history. Your long term borrowings, if I’m looking at this right, are the lowest they’ve been in the company’s history. It just doesn’t seem like the market is giving you the credit it should in terms of your equity price.
And I’m just wondering if you’ve given any thought to separating the businesses, spinning off the hotels from the theaters. If I had to guess, the hotel business is probably worth as much as the whole enterprise value of the company. Just curious about your thoughts on that.
GregMarcus
Well, they say – that’s a good question. Look, we…
Chris Potter
I’m guessing that separated the market would give them a lot more credit than combined for some reason.
GregMarcus
The only comment I could really make on that, obviously, and that is that we constantly look at our structure and what is the optimal structure for the company going forward and what is the best way to manage the balance sheet, to manage the returns, to manage the value of the public market valuations.
We are – we look at it regularly. And I have nothing to announce here on this phone call, and – but – and I appreciate the thought and what you’ve just suggested. And the best I can say is we always look at these things. There’s no shortage of investment bankers who would call on us to present the ideas.
Chris Potter
Okay, thank you. I just had one more, if I can, and forgive me, I missed the beginning of the call. So if you already spoke about this, but, can you just comment on what the property market is like as you’re seeing it, in terms of, you know, these theaters that you close, and if there are other underperforming theaters that might be candidates for sale? What the appetite is for those kinds of properties?
GregMarcus
Well, the properties that we closed, one was just coming off lease, so that just is something that we are – we don’t have to deal with that anymore in terms of what the obligation is. The – of the other two, one is – has active interest, and the other one has – we just don’t know yet. But the math we really did was looked and said, okay, even with the cost of – at an absolute minimum, with the cost of carry because of where they sit in relation to other theaters, we will be better – we can capture enough business in the other theaters that the cost of carriers is just justified being closed. Very unique situation. We do not have too many of those floating around where we can do that.
Chris Potter
Understood. Thank you.
GregMarcus
Thank you.
Operator
Thank you. At this time, we have no further questions, so I’d like to turn the call back to Mr. Paris for any additional or closing remarks.
Chad Paris
Thanks, Alex. We would like to thank you once again for joining us today, and we look forward to talking to you again in late February when we release our fiscal 2023 fourth quarter results. Until then, thank you. and have a good day.
Operator
Thank you for joining today’s call. You may now disconnect your lines.