Marcus Corp (MCS) 2012 Q2 法說會逐字稿

Good morning, everyone, and welcome to The Marcus Corporation's second-quarter earnings conference call. My name is Angela, and I will 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 this conference. (Operator Instructions). As a reminder, this conference is being recorded. Joining us today are Greg Marcus, President and Chief Executive Officer, and Doug Neis, Chief Financial Officer of The Marcus Corporation. At this time, I'd like to turn the program over to Mr. Neis for his opening remarks. Please go ahead, sir.

Thank you very much. This is Doug Neis and I welcome all you to our fiscal 2012 second-quarter conference call. As usual, I need to begin by stating we plan on making a number of forward-looking statements on our call today. Our forward-looking statements could include, but not be limited, to statements about our future revenues and earnings expectations, our future RevPAR occupancy rates and room rate expectations for our hotels and resorts division, expectations about the quality, quantity and audience appeal of film product expected to be made available to us in the future, expectations about the future trends in the business group and leisure travel industry, and in our markets, expectations and plans regarding growth and the number and type of our properties and facilities, expectations regarding various non-operating line items on our earnings statement, and expectations regarding future capital expenditures.

Of course, our actual results could differ materially from those projected or suggested by our forward-looking statements. Factors, risks and uncertainties which could impact our ability to achieve our expectations are included in the Risk Factors section of our 10-K and 10-Q filings which could be obtained from the SEC or the Company. We will also post all Regulation G disclosures, when applicable, on our website at www.MarcusCorp.com.

So with that behind us, let's talk about our fiscal 2012 second-quarter results. I'm certainly pleased to be reporting the positive trends in our hotels and resorts division again, they have continued into our second quarter, resulting in significant year over year improvements in that division. Meanwhile, although our Theatre division was reporting a small decrease in operating income this quarter, we would have in fact reported an increase again, if not for the one-time accelerated depreciation on our old 35 millimeter projection systems that we reported this quarter in conjunction with our digital cinema rollout.

I'm going to take you through some of the details behind the numbers, and then I will turn the call over to Greg for his comments. As you can see, there really weren't any significant variations in most of the other income and expense lines below operating income, other than another reduction in interest expense compared to the prior year. Our interest expense was down nearly $300,000 during our fiscal 2012 second-quarter, and is down nearly $600,000 year-to-date, compared to the prior year's same period, due to primarily to reduced borrowings, and although our capital spending is starting to increase, it was relatively low during the first half of the fiscal year.

As in the past, we will likely see our debt level rise in future periods as our capital spending program picks up. Now, our total debt remains at historically low levels and our comparable debt to capitalization ratio at the end of the quarter was 37%, down from 39% in our recent May year end. And this lower debt to cap ratio is despite the fact that we repurchased approximately 560,000 shares of our common shares this year. Our effective income tax rate during the first half of fiscal 2012 was 38.6%, compared to 38.3% last year, with both years' second-quarter rates benefiting from adjustments in our year-to-date assumptions. Our fiscal 2012 second-quarter income tax expense benefited by approximately $400,000, related to a recent settlement with the IRS on certain tax matters. We certainly expect our tax rate for the final two quarters of the year to be closer to our historical 39% to 40% range, pending any further changes in assumptions, lapses in statutes of limitations, or potential changes in federal or state income tax rate.

Now, speaking of our capital spending, our total capital expenditures, including acquisitions, during the first half of fiscal 2012 totaled approximately $17.3 million, compared to $15.8 million last year, during the same period. The largest component of last year's amounts was an acquisition of a theater in Appleton, Wisconsin, but this year, approximately $5.8 million of the amount was incurred in our Hotel division, all of which was primarily maintenance capital, with renovations at our Hotel Phillips and Hotel Madison properties representing the largest pieces. Theatre division capital expenditures of approximately $11.4 million included our up-front contribution to the digital cinema rollout, a lobby remodel at one theater and expenditures related to the construction of our newest Zaffiro's Pizzeria and Bar in St. Cloud, Minnesota, in addition to other normal maintenance capital.

At the beginning of this fiscal year, we estimated that our capital expenditures for fiscal 2012 could total in the $50 million to $90 million range, recognizing that as we pointed out on our 10-K filings, the timing of several of our planned expenditures, including those related to the Corners retail Project were just estimates at that time. The estimate also include a certain level of potential unidentified growth projects. For example, we didn't know that we be purchasing a theatre in Franklin, Wisconsin, out of receivership, but we set aside dollars for opportunities like that in both of our divisions, and while several of these types of expenditures still could arise in the remaining six months of our current year, I'm going to tighten up the range a little bit, here, and tell you that my current assumption is that our estimated fiscal 2012 capital expenditures may more likely end up in the $45 million to $75 million range. Which would still be an increase compared to the last few fiscal years.

The single biggest variable in this range continues to be The Corners project. As you recall, we identified approximately $20 million of potential fiscal 2012 expenditures related to this project. At this point, we still don't know whether those expenditures will occur this year, or will carry over into our fiscal 2013, although the likelihood of those dollars moving in the next year is increasing. Greg will provide some additional commentary on our progress in this project shortly. Now, the actual timing of the various projects currently underway or proposed will certainly impact our final capital expenditure number, as will any currently unidentified projects that could develop during our fiscal year.

So now, I'd like to provide some additional financial comments on our operations for the second quarter, and first half, beginning with Theatres. Our box office revenues decreased 6.4% during the second quarter, but our concession food and beverage revenues were up 5.2%. Year-to-date, box office revenues were still up 0.7% compared last year, and our concession revenues were up a significant 12%. The second-quarter box office decrease is attributable to a decrease in attendance at our comparable theaters of 6.5%. Year-to-date, comparable theater attendance was down 1.1% due to the weaker film slate during the second quarter.

Our average admission price actually decreased by 0.4% for the quarter, but was increased by 0.5% year-to-date. Two of our top three pictures last year during the second quarter were presented in 3-D, compared to one this year, likely contributing to the small decrease in our average admission price. Conversely, our average concessions and food and beverage revenues per person in our Theatre division increased by 12% compared to the same quarter last year. And has increased by 11.8% for the first half of the year compared to last year.

Pricing, concession product mix and film product mix are the three primary factors that impacted our concession sales per person. Selected price increases, a change during the second half of our last fiscal year from sales tax inclusive pricing to sales tax added pricing, an operational change to more grab-and-go candy offerings any change in concession product mix, including increased sales of higher-priced non-traditional food and beverage items in our theaters all contributed to our increased concession sales per person during the second quarter and first half of the year. Our year-to-date operating margins in this division have increased to 19.4% compared to 18.4% last year, and as our press release points out, our operating income and margin would have been even better this year, both for the quarter and year-to-date, if not for over $800,000 of accelerated depreciation we reported this quarter, and $1.4 million in total that we reported for the first half of the year related to 35 millimeter film projection systems that were replaced in conjunction with our previously-announced digital cinema deployment.

Now, shifting to our Hotels and Resorts division, as we noted in our release, our overall hotel revenues were up 9.4%, and our total RevPAR was up the same 9.4% during the quarter, compared to the same period last year. Year-to-date, our RevPAR is now running 9.6% higher than it was last year at this time. As we've noted in the past, our RevPAR performance did vary by market and type of property, but all eight company-owned properties reported increased RevPAR, both for the second quarter and for the year-to-date.

According to data received from Smith Travel Research, and compiled by us in order to match our fiscal year, comparable upper upscale hotels throughout the United States experienced an increase of RevPAR of 6.2% during our fiscal 2012 second quarter, and 6.1% during our fiscal 2012 first half. So we have again, once again, outperformed the national average. Our fiscal 2012 second-quarter overall RevPAR increase was a result of an overall occupancy rate increase of 2.6 percentage points, and an average daily rate increase of 5.7%. For the first half of fiscal 2012, our occupancy rate is now running approximately 2.7 percentage points ahead of last year, and our average daily rate has increased by 6%. With that, I'll now turn the call over to Greg.

Thanks, Doug. I'll begin my remarks today with our Theatre division. After a record first quarter from this division, our second-quarter results did not quite match last year, but we're still quite pleased with where we are, halfway through this fiscal year. In fact, if not for the $1.4 million of accelerated depreciation described earlier, operating income would be over $3 million, or approximately 17% higher than we were in this division last year at the same point.

When all is said and done, this year's second-quarter film product, while not bad by any means, was probably one good film or so away from matching up with last year. The fact that we did not have quite as much depth to the film slate this time around is evidenced by noting that we had only seven films that produced at least $1 million of box office receipts for our circuit during our second quarter, compared to eight films that reached that mark last year. That second tier of films can make the difference between the record revenues we reported during the first quarter, and a good but not great quarter like we're reporting during our second quarter. I will tell you while there wasn't necessarily any one-time period during the quarter where most of our box office decline occurred, October was the month that most under-performed, and even more specifically, our worst single week from a comparison perspective was the week that Jackass 3-D was released last year, I would like to note that it's important just to know that, Doug put that into my section of the remarks, and somehow got me to say the name of that movie. Thanks, Doug.

It certainly is too early to tell how the holiday and early winter film season will perform, but on paper, the product looks promising. With a couple of films that opened near the end of our second quarter, including the Twilight sequel and The Muppets, and have carried over nicely into our third quarter, but Harry Potter and Tangled also carried over well last year during this same time period, so that has been essentially a push. The season really starts for us tonight and tomorrow when Mission Impossible opens up exclusively on our ultra-screens and other large-format screens across the country, and the next Sherlock Holmes and Alvin and the Chipmunks sequel opens up nationally. Mission Impossible goes to wide release the following week, and five additional pictures open up between now and Christmas Day.

We've listed several of those titles in our release as well, we're hoping for good weather, particularly during the busiest movie-going week of the year, the week between Christmas and New Year's. Speaking of those holidays, I will point out that the calendar is not particularly helpful this year, as Christmas Eve and New Year's Eve both fall on a Saturday, which is traditionally our highest-grossing day of the week. Christmas Eve is the one night a year that we close our theaters, so that may impact us slightly.

Shifting away from the movies, it is evident by our numbers that the real story of our second quarter and year so far has been our ability to increase our average concession and food and beverage revenues per person by approximately 12% during both periods. Doug went over some of the contributing factors to this outstanding performance, and we continued to execute on several of the strategies we have previously outlined in our effort to expand both our traditional and non-traditional food and beverage offerings in our future.

As our press release notes, construction continues on our second full-service Zaffiro's Pizzeria and Bar, this time in conjunction with a major renovation of our Parkwood Cinema in a suburb of St. Cloud, Minnesota. And we recently broke ground on our third Zaffiro's location at the Ridge Cinema in New Berlin, Wisconsin. We don't necessarily expect to report double-digit increases in our concession per capitas every quarter, but this is an area of emphasis for us, and I'm pleased our results. I also want to commend our operating team on our system-wide rollout of digital cinema. Once we made the decision to move ahead with digital, we wanted to deploy as rapidly as possible, and in a matter of roughly 45 days. Our digital cinema team and vendor partners deployed this state-of-the-art technology on over 90% of our screens, further contributing to our reputation as a leader in our industry. Finally, as our release indicated, yesterday we purchased a 12-screen theater in Franklin, Wisconsin, out of receivership, the second individual theater we were able to acquire over the last 15 months. We will continue to look for further opportunities to expand our successful theater circuit in the future.

With that, let's move onto our other division, Hotels and Resorts. You've seen the segment numbers, and Doug gave you some additional detail. Certainly, we were very pleased with yet another quarter of significant year over year improvement. And as Doug shared with you, it is gratifying to see us continue to outperform the industry during this recovery. Particularly encouraging in the detail behind our numbers, is the fact that we reported an overall increase in our average daily rate of nearly 6% again this quarter, our fourth straight quarter of increased ADR and second straight in the 6% range. Seven of our eight owned properties reported an increase in rate this quarter compared to the same quarter last year.

That is not to say that we aren't still experiencing pressure on our rates in this current environment. Our fiscal 2012 second quarter and first-half ADR is still over 7.5% lower than it was during the same time period in our pre-recession fiscal 2008, an indication that there is still room for improvement. It is interesting to note however, that our fiscal 2012 second-quarter and first half RevPAR is only less than 1% lower than our pre-recession fiscal 2008 performance, thanks to approximately eight additional points of occupancy this year, compared to the comparable year-to-date results of fiscal 2008. In fact, our combined occupancy for our eight owned hotels has never been higher, and that same dynamic is occurring nationally as well.

Our team did a nice job this quarter of maximizing our flow-through, as we converted approximately 44% of our increased division revenue this quarter to our operating income. Our overall operating margin increased this quarter from 7.2% during last year's second quarter to 10.4% this year and year-to-date. We also have gained nearly 3 points in our margin, increasing from 11.4% to 14%. The story behind these improved results remains the same. The resurgence of business travel is leading the way. All three primarily sub-segments of this customer, the individual business traveler, the corporate volume customer, and even group business continues to show improvement over the prior year.

The advanced booking pace for groups continues to be good, but as group business levels get closer to pre-recessionary levels, we will likely see that pace plateau at some point. And so, while we continue to see opportunities for occupancy growth, the emphasis continues to be on gradually increasing our average daily rate. For the first time in several years, as we negotiate our corporate volume agreements for the next year, we are finding some receptivity to modest price increases. And we've been able to continue to decrease our reliance on the various Internet distribution channels, contributing to our improved average rate. We will need more of the same over the next nearer year or two in order to get back to prior levels.

One of the factors that allows us to avoid the deep discounts in some of our competitors have resorted to at various times is the fact that our hotels are generally the highest rated properties in their respective markets. We focus on our overall value proposition, versus just price, and I believe that has contributed to our ability to outperform the market. Looking ahead, bookings seem to be generally optimistic about the future and that optimism comes in part by our belief that companies learned their lesson from prior tough economic times and have made a conscious effort to keep the people on the road, selling their product, whatever that may be. In the nearer term, our fiscal third quarter is historically our weakest quarter due to our large Midwestern hotel presence, in fact, this division has always reported a loss during the quarter. But we do hope to report continued year over year improvement during the remainder of the fiscal year, assuming no major disruption or changes in the economic environment.

Finally, as you know, we also continue to look for opportunities to grow our hotel business through a variety of different ways. Our hotel division continues to seek additional management contracts, and has the ability to make minority investments in projects when the opportunity arises. Bill Reynolds has hit the ground running as Senior Managing Director of our newly-formed investment business, MCS Capital, and he is exploring additional opportunities that could provide long-term value to The Marcus Corporation. We don't have a timetable that might force us to do something that doesn't make long-term sense, we remain patient investors, and we believe value-added opportunities will become available in this industry.

As I wrap up our prepared comments, let me briefly touch on two corporate-related topics. As our press release indicated, we've repurchased another 119,000 shares during the quarter, pursuant to an existing Board authorization, bringing our purchased total to 561,000 year-to-date. You can see the result of this on our earnings statement, as our net earnings increased 35.5% during the quarter, but our earnings per share increased 42.9%. And while we still have plenty of room to consider growth opportunities in both of our businesses, with a debt to capitalization ratio well under 40%, approximately $117 million revolving credit availability as of quarter-end and $150 million in universal shelf registration statement on file and effective with the SEC, we have the flexibility to explore and follow through our potential growth and value creation opportunities that may arise during the months and years ahead. We will continue to manage our balance sheet very carefully in the future, but we are committed to executing the strategies necessary to provide value to our shareholders, over the long-term.

I also wanted to give you a brief update on The Corners at Brookfield, our proposed open-air fashion mall project, anchored by one of the most sought-after department stores in the Midwest, Von Maur. As I have said in the past, there are many pieces to this puzzle, and we continue to make progress on each of these pieces. For example, the design elements have really come together, and I'm confident that our discussions with the local community will result in a mutually-beneficial public-private partnership for the development of this important gateway location for the region. The majority of our current focus is on leasing up the over 200,000 square feet of retail space that will surround the Von Maur department store. I'm pleased to report that the response to this project from potential tenants has been very encouraging. Approximately 70% of the retail space is currently in play, with specific tenants, and of those tenant, approximately 50% of them are in letter of intent negotiations at this time.

This is great progress, but at the risk of being repetitive, let me reiterate that we will not build this center until its future success is assured. As Doug noted, there certainly still is the chance that everything will come together and allow us to begin construction in the spring, but Von Maur has gone on record as indicating that they only will open a new store in the fall of a given year, thus if it takes longer to get to our desired lease-up level, and we can't begin construction this spring, then so be it. Our expected expenditures would be pushed into the following fiscal year, and the project will likely open in the fall of 2014, rather than the fall of 2013. Again, we're patient, we'll be prepared for either scenario. With that, at this time, Doug and I would be happy to open up the call for any questions you may have.

Thank you. (Operator Instructions). Your first question will come from the line of Mr. David Loeb with Baird. Please proceed.

I wanted to ask you first about corporate -- corporate expense is usually a bit higher in the first quarter than the second quarter. This quarter was more like the first quarter. Did some of that have to do with management transition related issues? Or is there something else? Is this a better run rate going forward? Could you give us a little more color?

Yes. You know what, it's kind of all of the above. There's several things there, there's some expenditures that we have chosen to conservatively expense, related to The Corners project, legal costs and some things along those lines. So, that's an unusual item that's keeping that number a little higher. We are absorbing the costs associated with MCS Capital and everything associated with that right now, so that's also driving some of that as well. And certainly there would be some transition costs as well involved in that.

So, looking ahead, is the $3.5 million expense level, is that a better run rate then kind of more like $2.8 million or so?

Again, I wouldn't call the number that's in there currently as the run rate because certainly there is some -- again, the timing of some of the expenditures in The Corners is distorting that. So, I would not -- I would suggest the run rate would be a little less than what we are currently looking at.

Okay. That makes perfect sense. Can you give us a little update on the MCS Capital, and where do you see that playing out, and what are the early thoughts? I know that's another business where patience is required, but what do you think about the direction that's heading, and where do you think that will go?

You're right on, David -- patience is required. We're making headway, I'm seeing -- the pipeline starts to see things fill into it, whether that actualizes, I don't know. But I like what we're seeing. But it's going to take time. I think as we've seen the transaction levels drop off nationally, with the REIT's currency going away, and we're being picky, but we are looking around. As I said, I like what I'm seeing, but I don't have anything I can tell you that we're ready to do right this second.

Great. One last one on the hotel business. This was clearly a very good quarter. I'm guess I'm trying to understand if it was an exceptionally good quarter, how much do you think the Brewers' play-off performance helped in this quarter? Was it material, or do you think it was really just $100,000 or $200,000?

I would tell you that it was not material. And in fact, there were some times when we were actually hoping for certain games to go certain ways because we were actually relatively busy in the market, and we were trying to figure out where everybody was going to go. And so, I don't think it was material. I couldn't tell you the exact numbers, but --.

So, this really is a testament to the strength of your markets, and really it's more about what you're doing at the hotel level in the markets rather than any kind of exogenous events like that?

I think it's what you're seeing is -- it's maybe investment driven; the investments that we made when things were really challenging, I think we're seeing some of that pay off. I think that the shift in mix from [aux] ADR, you're starting to see that pay off and help. So, it seems to be a number of factors coming together.

Okay. Great. That's all I had. Thank you.

(Operator Instructions). Your next question comes from the line of Greg Macosko with Lord Abbett. Please proceed.

Just to talk a little bit about the -- you're talking about the pricing relative to the group business. That sounds -- you're suggesting that it's coming in better, and people are willing to -- the groups are willing to pay up a little more?

Yes. It is, I wouldn't say people are drunk with -- ready to rebel and go nuts, but it's what I think is just a continuation of the measured improvement in the business that we've been seeing. And as the patterns seem to be playing out relatively typically, albeit again at a measured pace, where you see -- I think we talked about this, we've been talking about it for a few years where occupancy comes first, and then ADR should follow. And probably I would editorialize and say occupancy came faster than we thought, and I don't think ADR is coming as fast as we would like.

With regard to the group business, what's the forward look? Are you able to look out as far today as you were two or three years ago, in December, and see what you had for the spring and summer?

No. I mean, I could tell you -- it's a little choppy. I can't tell you that we got great stuff coming. I know Milwaukee's convention calendar, which benefits us a fair amount, is weak next year, but we've worked around that before, and we go out and find stuff to fill in when that's a problem; I can't tell you what's going to happen this year. But you're right, your underlying point, which is, the booking windows are a lot shorter.

So, they're shorter than they have been historically, is the point?

Yes.

Okay. But you're also suggesting that you're able to work and not be as dependent upon the websites that basically sell rooms at the last minute for a lower price?

That would be a hallelujah. Again, at different times of the year, you make decisions. We have guys who are making those decisions on a daily and weekly basis in terms of how much inventory to provide to those sites and -- but yes, overall, we've been able -- some of this shift and some of that 6% increase in ADR wasn't that you just changed the rates by 6%, it is just that you had mix change.

Right. And the occupancy, you're saying it's never been higher in your eight owned hotels? I mean, do you feel as if, kind of going forward, that you have a better handle on that occupancy, and sort of look at it on an ongoing basis on a higher level?

I'm not sure I follow the question.

Well, you're saying right now that occupancy has never been higher, and yet we haven't -- we're still not, relative to the economy and et cetera, we haven't come back to that yet, and yet you're at a good occupancy level. So, I guess it's a reflection of the properties that you have, that you expect -- do you expect that to kind of maintain at a higher level?

I can't make a prediction as to where it will be. I know that I would trade some rate for occupancy, honestly. It's just better on the margin. The properties don't get beat up so much when you do that, as you know.

Okay. And then with --?

Greg, I would add that while -- we are overall outperforming in our markets and national numbers, that particular trend is a national trend. I think I saw some statistic recently, 18 of the top 20 markets all have like some of the highest rooms sold ever right now, so that is a dynamic that's being played out nationally.

Good. And then with regard to the theaters, just talk a little bit about the restaurants that you've been working on, and you were reasonably optimistic last quarter or you talked about that, I didn't hear any comments there. Give us sort of an update on that.

Look, we continued -- I don't think any -- truth is, at the end of the day right now, nothing that we're doing is material to the bottom line of the business, I don't think. But we keep refining the process, we like the Zaffiro's concept, we like what it imbues on a complex itself. And people love the product. And we continue to refine what we're doing. The nice thing about -- this is a mix of things here. We can do -- in-theater dining is good, but you're limited to what movie is playing in the theater. When you do a stand-alone restaurant, the restaurant can serve everybody in the theater, and that's very nice. The challenge typically is theater locations are not always necessarily great restaurant locations. At nighttime, they're very good.

One of the things we see is we can't put more people in the restaurant at dinnertime, we turn the thing a number of times, and it's jammed to the gills. The true path I think to profitability, and good profitability, for these will be building out the shoulder periods on them. But it's hard -- like, lunchtime in a theater complex is sort of an empty parking lot, so it's not as inviting. But we continue to just work on it. And we believe in the product sincerely. People love the product. That's a great place to start.

With regard to the CapEx budget, which you brought down just a little bit, is there any for the Franklin acquisition there? Do you have CapEx for that in there?

Yes. When I gave that $45 million to [$70] million number, it was -- I built into that, the Franklin acquisition. It wasn't in the $17 million that I said we would spend for the first half of the year. But yes, my estimate includes it.

Okay. And finally, I know I've asked a lot of questions, but finally, what did you pay on the 119,000 buybacks?

Oh, it was the low $9s, Greg. It was -- I think my weighted average on all 560 now is like $8.70.

And low $9s for what you --?

That last piece was in the low $9s, $9.25, somewhere, on average, somewhere in that neck of the woods.

Okay. Thanks very much.

(Operator Instructions). Your next question will come from the line of Jonathan Pong with Robert W. Baird. Please proceed.

Hi, good morning. I just wanted to push a little bit deeper on the hotel section, and focusing particularly on rate. I know you guys -- this is the second quarter in a row now that you guys have highlighted occupancy rates being very high. How aggressive have you guys been in pushing ADR this quarter? How do you envision being in pushing that in following quarters?

I will tell you that we're being as aggressive as we can be. What we have to watch for, and what sometimes we're seeing is that when we push it too hard, it just starts to drop off faster than we would like, and you start to lose your RevPAR. So, but we will get -- push as hard as we can to shift the mix, get out of the OTA guys, and work to fill it with business that's going to be more profitable to us. And in addition, drive food and beverage. We look at all those factors. And on top -- and sometimes we weigh the [facts] in the other direction, which is, well, what's going to be the overall spend. We may drop the rates to get somebody in the hotel who is going to eat in our restaurants, and shop at our stores, whatever we've got, depending on the property.

Just what I would add to it, Jonathan, is that if you start to bifurcate each of the customer segments, you're negotiating that rate at different times. Some of them you're negotiating daily, with the transit traveler, but as we mentioned in our prepared remarks, this is the time of year when we're out there negotiating our corporate volume business, RFPs, and that number is set for a year at least. And so, that was one of the comments we made is that, for maybe the first time in two, three years, we're at least getting some ability -- to push that rate a little bit. And so, but Greg used the word measured before, and that's the right word.

Okay. And could you guys go a little bit into market-specific performance, RevPAR-wise? Maybe look at the urban properties like the Four Points in Chicago versus some in the secondary markets? How are those doing in comparison to each other?

Yes, Jonathan, since we only have they eight properties, we just refrain from getting too specific, and that would in turn, from a competitive perspective, tell too much about any individual properties. So in general, as we mentioned, they are all up. Overall, we were up 9%. And that range was, boy, I don't know, the lowest was probably in the mid-single digits, 5%, 6%, and we certainly had several properties that were in double-digit increases. But we just don't think that it's appropriate for us to talk too specific about individual properties.

Sure. No problem. That's all I had. Thanks a lot, guys.

Thank you. At this time, it appears there are no other questions. I'd like to turn the call back over to Mr. Neis for any additional or closing comments.

Thank you very much. I want to thank everybody for joining us today. We look forward to talking to you again, once again in March when we release our third-quarter fiscal 2012 results. Thanks, and we wish you all a very Merry Christmas, Happy Hanukkah, and Happy New Year.

That concludes today's call. You may disconnect your line at any time. Good day.