On Sept. 25, hotel-and-movie maven Marcus Corp. (NYSE:MCS) reported first-quarter 2008 earnings for the period ending Aug. 30, 2007.

  • Oh no -- higher sales but lower profits! The tax man had something to do with this, as last year's tax credits for renovating a hotel in Oklahoma City weren't renewed this year.
  • Marcus is trying to monetize its theaters in new ways, like screening Green Bay Packers games in Wisconsin theaters, through the magic of digital projection.
  • On the hotel and resort side of things, Marcus likes to sign management deals to run the operations of other people's facilities, rather than building its own. Partners include Hilton Hotels (NYSE:HLT) and Starwood Hotels & Resorts (NYSE:HOT), and management is actively looking for more of these low-cost opportunities.
  • Marcus enjoys a three-star ranking in Motley Fool CAPS, our free interactive stock database. While other hotel and movie mavens may be sparse, Marriott (NYSE:MAR) also holds three stars, while Regal Entertainment (NYSE:RGC) has only two.

(Figures in thousands, except per-share data)

Income Statement Highlights

Q1 2008

Q1 2007

Change

Sales

$112,141

$93,407

20.1%

Net Profit

$11,731

$13,707

(14.4%)

EPS

$0.38

$0.45

(15.6%)

Diluted Shares

30,686

30,436

0.8%

Get back to basics with the income statement.

Margin Checkup

Q1 2008

Q1 2007

Change*

Gross Margin

52.1%

53.5%

(1.4)

Operating Margin

21%

22.7%

(1.7)

Net Margin

10.5%

14.7%

(4.2)
*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q1 2008

Q1 2007

Change

Cash + ST Invest.

$12,629

$46,268

(72.7%)

Accounts & Notes Rec.

$20,517

$16,201

26.6%

Inventory*

$6,942

$0

N/A

Liabilities

Q1 2008

Q1 2007

Change

Accounts & Notes Payable

$14,722

$18,697

(21.3%)

Long-Term Debt

$184,277

$127,231

44.8%
*Condos held for sale, down from $76.4 million last November.

The balance sheet reflects the company's health.

Cash Flow Highlights

Free cash flow is a Fool's best friend, but there's no friendly cash flow statements today, folks.

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