Marcus Corp (MCS) 2018 Q3 法說會逐字稿

Good morning, everyone, and welcome to The Marcus Corporation Third Quarter Earnings Conference Call. My name is Mark, and I will be your operator for today. (Operator Instructions) As a reminder, this conference is being recorded. Joining us today are Greg Marcus, President and Chief Executive Officer; and Doug Neis, Executive Vice President, Chief Financial Officer and Treasurer 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.

Well, thanks very much. And welcome, everybody, to our fiscal 2018 third quarter conference call.

As usual, you know I need to begin by stating that 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 products 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 in the number and type of our properties and facilities; our expectations regarding various nonoperating 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 can be obtained from the SEC or the company. We'll 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 record fiscal 2018 third quarter and first 3 quarters. It's great to lead with our Hotels and Resorts division this quarter as the third quarter is typically one of our strongest periods. And they not only didn't disappoint, they posted some great, record results this quarter. Our theater division reported record revenues once again and had yet another very profitable quarter, but it's operating income was impacted by several onetime costs and a film mix that contributed to higher film costs this quarter.

I'm going to take you through some of the details behind the numbers, both on a consolidated basis and for each division, and then turn the call over to Greg for his comments. Before I dig into each division, let's spend just a couple minutes on a couple of the line items below operating income.

You'll note that our investment income was up slightly this quarter, and our interest expense was slightly lower than last year due to reduced overall borrowings, despite a higher average interest rate during the quarter. But other than that, the rest of the line items below operating income really were virtually unchanged from last year.

Of course, the most significant change in our line items below operating income was in income taxes due to the new tax law. Our first 3 quarters' effective income tax rate adjusted for losses from noncontrolling interest was 21.5%, significantly lower than last year's 37.8% for the first 3 quarters of the year.

As you know, we've indicated that we generally expect our effective income tax rate to be in the 25% to 26% range, and that still remains our expected rate over the long term. Having said that, during our fiscal 2018 third quarter, in addition to our new lower base rate, we also benefited from several onetime items related to various deductions that also favorably impacted our reported results.

Now shifting gears away from the earnings statement for a moment. Our total capital expenditures during the first 3 quarters of fiscal 2018 totaled approximately $45 million compared to approximately $87 million last year. Approximately $37 million of our total spend during the first 3 quarters was incurred in our theater division, the majority of which related to our continuing DreamLounger seating projects, premium large-format conversions and new food and beverage outlets and we've been discussing that for some time now. The $8 million of capital expenditures on our Hotels and Resorts divisions were primarily related to various normal maintenance projects.

Clearly, our capital spending is declining from our very high numbers from last year as the number of theater projects has lessened. Depending upon the type -- timing of payments on several projects at year-end, we would currently estimate that our total capital expenditures for fiscal 2018 will likely end up in the $55 million to $65 million range. The actual timing of the various projects currently underway and proposed will certainly impact our final capital expenditure number, as will any currently unidentified projects or acquisitions that could develop during the final couple months of our fiscal year.

Now I'd like to provide some financial comments on our operations for the third quarter and first 3 quarters. And as part of these comments, I'm going to remind you of some of the accounting changes in our fiscal 2018 financial statements that are important to note as you compare some of the line items to last year. It's important to point out, however, that while some of the changes resulted in noticeable variations in specific line items, none of these changes had a material impact on overall operating income or net earnings.

Let's begin with theaters. Our reported box office revenues increased 4.3%, and our concession revenues increased 6.6% during the third quarter and have increased 11% and 13%, respectively, year-to-date. The fiscal '18 year-to-date numbers did include the 2 new theaters that we opened during the second and third quarter of last year as well as an accounting change that negatively impacted box office revenues and favorably impacted concession revenues.

Now just as a quick reminder, as a result of adopting the new accounting standard related to revenue recognition during the first quarter, our accounting for our loyalty programs and our Internet fee revenues has changed. In accordance with the new guidance, the portion of theater admissions and concession revenues attributable to loyalty points earned by customers is now deferred as a reduction of these revenues until reward redemption. Prior to adopting this new standard, we reported independent -- we reported estimated incremental cost of redeeming loyalty points at the time they were earned in advertising and marketing expense.

As a result, during the third quarter and the first 3 quarters of fiscal 2018, while the net effect of these changes in accounting was very close to net 0 on our operating income, as I mentioned, it did result in a decrease in theater admission revenues, an increase in theater concession revenues and a decrease in advertising and marketing expense.

Now when this becomes important is when we attempt to compare our theater results to the rest of the industry. The data we received from Rentrak, a national box office reporting service for the theater industry, represents gross box office receipts reported to it. And so by definition, it would be before any such deferral of revenues for accounting purposes that we or any other exhibitor, for that matter, might record. Thus, we need to add back the impact of this revenue recognition accounting change to our reported admission revenues in order to get the numbers that we can then compare to the rest of the industry.

So according to data received from Rentrak and compiled by us to evaluate our fiscal 2018 third quarter and first 3 quarters, United States box office receipts increased 6.9% during the fiscal 2018 third quarter. After adjusting for the deferred revenue from our loyalty program, our third quarter box office receipt increased 5.5% compared to last year. As a result, we believe our box office receipts during the third quarter of fiscal 2018 slightly underperformed the industry this quarter. Greg's going to dissect our third quarter performance versus the industry in even greater detail during his prepared remarks as we do believe that there were some unusual circumstances that contributed to this rare overall underperformance for the quarter.

Performing that same calculation for our fiscal 2018 first 3 quarters, however, shows that our fiscal 2018 continues to be another strong year of outperformance for us as we find that U.S. box office receipts have increased 10% during our comparable 39 weeks, meaning that our increase in box office receipts of 12.5% after you adjust for that accounting change outperform the industry by 2.5 percentage points year-to-date. We've still outperformed the industry average overall during 16 of the last 19 quarters.

Now the third quarter theater increase in our box office revenues was attributable to an approximately 3% increase in attendance at our theaters and an increase in our average admission price of 1.3%. For the first 3 quarters of fiscal 2018, theater attendance at comparable theaters has increased approximately 6%, and our average ticket price has increased 4.6% compared to last year. A modest price increase taken in October last year and an increased number of premium large-format, or PLF, screens with the corresponding price premium contributed to our increased average price during the fiscal 2018 periods.

Conversely, we do believe that a change in film product mix had an unfavorable impact on our average ticket price during the third quarter of fiscal 2018 compared to that third quarter last year. Our top film during the third quarter of fiscal 2018 was the PG-rated family movie Incredibles 2, which results in a higher percentage of a lower-priced children's ticket sold compared to our top film during the third quarter of fiscal 2017, which was the R-rated film It, which resulted in a higher percentage of a higher-priced adult ticket sold. So we had a clear mix change that impacted that average ticket price this quarter.

We're pleased to report an increase in our average concession in food and beverage revenues per person of 3.5% for the third quarter and 6.3% year-to-date. Our investments in nontraditional food and beverage outlets continue to contribute to higher per capita spending. But having said that, we believe that the same change in film product mix that I just discussed during the third quarter likely reduced the growth of our overall average concession sales per person during the fiscal 2018 period as those family-oriented films, such as the top film during the third quarter, described -- tend to not contribute to sales of nontraditional food and beverage items as much as adult-oriented films.

I'll also point out that theater other revenues increased by approximately $600,000 during the third quarter and increased by approximately $4.3 million during the first 3 quarters in the year. And while a portion of these increases are due to increased preshow ancillary revenues, a larger portion of the increase is related to the accounting change for Internet ticket fees that I referenced earlier.

Prior to the new revenue recognition standard, we had -- we recorded these fees net of third-party commissions or service fees. And under the new guidance that we adopted in the first quarter, we're recognizing ticket fee revenues based on a growth transaction price. This change had the effect of increasing other revenues and increasing other operating expense by an equal amount, and it had no impact on operating income or net earnings.

That's enough for the numbers for you for now. I'll let Greg talk to some of the items that impacted operating income this quarter for the theaters.

Shifting over to Hotels and Resorts division. Excluding cost reimbursements, our overall hotel revenues were up 4.3% for the third quarter and are now up 2.7% for the first 3 quarters of fiscal 2018 thanks to increases across the board in room revenues, food and beverage revenues and other revenues. The largest portion of the increase in food and beverage revenues related particularly on the year-to-date numbers is due to the opening of the new SafeHouse in Chicago in March last year. And the largest portion of the increase in other revenues is due to an increase in management fees. Room revenues were up due to an increase in our revenue per available room, or RevPAR, of 5.2% during the third quarter, and now we're up 1.3% year-to-date compared to last year's periods. As we've noted in the past, our RevPAR performance did vary by market and type of property.

Breaking out our numbers more specifically. Our fiscal 2018 third quarter RevPAR increase was due to an overall occupancy rate increase of 2.1 percentage points and a 2.5% increase in our average daily rate, or ADR. Our fiscal 2018 first 3 quarters RevPAR increase was entirely due to a 1.2% increase in ADR as our overall occupancy rate is even with last year. All 8 of our company-owned properties reported increased RevPAR during the fiscal 2018 third quarter compared to the third quarter of fiscal 2017. And 4 of our 8 company-owned properties reported increased RevPAR for the first 3 quarters of the year compared to last year.

Now according to data received from Smith Travel Research and compiled by us in order to compare our third quarter and first 3 quarter results, comparable upper-upscale hotels throughout the United States experienced an increase in RevPAR of 2.1% during our fiscal 2018 third quarter, meaning that we outperformed the industry during the fiscal 2018 third quarter. Finally, I'm pleased to tell you that as a result of the increased management fees and improved performance at our owned hotels, hotel division operating income and operating margin increased significantly during the third quarter and first 3 quarters of fiscal 2018 compared to the same periods last year.

With that, I'll turn the call over to Greg.

Thanks, Doug, and I'll begin my remarks today with our theater division. It was an interesting and I would even say unusual quarter for this division. On the one hand, we reported another record quarter for revenues, and we saw a nice recovery in July and August box office performance versus last year. Of course, we also knew we would be going up against a very unusual September last year thanks to the breakout blockbuster It. And as expected, this year's box office in September couldn't match that. Doug shared with you that we slightly underperformed this quarter versus the U.S. box office. So that was certainly unusual as well.

There were a number of factors that we believe contributed to our small overall industry underperformance this quarter despite the fact that once again our Marcus Wehrenberg theaters outperformed the industry, at times by a pretty wide margin. To begin with, we believe that the film mix during the third quarter of fiscal 2018 compared to the third quarter of fiscal 2017 likely had a negative impact on our comparative performance versus the overall industry numbers, particularly during August and September. One of the top films during those 2 months, Crazy Rich Asians, performed extremely well on the East and West Coast but generally underperformed in our Midwestern markets. Conversely, our theaters do very well with the horror genre, and we definitely outperformed last year on It, making the September comparison even more difficult for us.

And then finally, the fact that the Major League Baseball teams in 3 of our key markets, Milwaukee, Chicago and St. Louis, were competing for the playoffs during the final months of this season, September 2018, likely had a negative impact on our attendance compared to the industry as a whole. All of this sounds like excuses, but they're not meant to be. They're just the reality of the circumstances we dealt with this quarter. Last quarter the film mix was perfect for us, so was the weather. This quarter we had a couple of headwinds to deal with, but so be it. Those things tend to even out over time, and our outstanding year-to-date results reflect that.

The same thing holds true as we shift to operating income performance this quarter. We had some usual things happen there as well. For example, we had 2 onetime items: a larger-than-normal insurance claim this year and a large film costs adjustment last year that accounted for nearly $900,000 of our operating income differential this quarter versus last year.

In addition to the onetime film cost adjustment last year, film costs also increased this year during the third quarter due to unusual -- there's that word again -- mix of films compared to last year. The top films of our fiscal 2018 third quarter, Incredibles 2 and Jurassic World: Fallen Kingdom, were summer blockbuster films. And film costs expressed as a percentage of admission revenue are generally greater for summer blockbuster films. As we've just talked about, our top film during the third quarter of fiscal 2017 was a less-expensive September film, resulting in an unusual, almost apples and oranges comparison this year. Again, not meant to be excuses, just the way it was this quarter. When you consider that we have increased fixed costs, such as depreciation and, to a lesser extent, labor due to the investments we've made and new food and beverage amenities we've added, it makes it more difficult to overcome when unusual things happen like they did this quarter.

Last quarter, I talked about the fact that there was a lot of leverage in our operating margins due to the relatively large fixed cost component to our operating structure. While leverage works both ways, in this quarter, it worked against us just a little bit. I share all this because this is our third quarter earnings call and you want to know what went on this quarter. But as you know, our perspective is much greater than any one quarter.

You may recall that I shared that same perspective 3 months ago after our incredible second quarter. When we step back and look at our fiscal 2018 year-to-date results with one quarter to go, we're extremely happy with where Rolando Rodriguez and his outstanding team have taken us so far. Record revenues were up over 12% from last year, and we are once again outperforming the industry. Record operating income was up over 13%. And we've increased our overall operating margin even with all the significant investments we've made in the business. As we look ahead, we are excited to continue to invest in both new and existing theaters during fiscal 2018 as we further expand the successful concepts and amenities that have contributed to our industry outperformance.

We also continue to be very interested in expanding our circuit with selective acquisitions if appropriate opportunities arise. We'll always stay disciplined in our approach, but we also believe that we are demonstrating currently how we can add value to theaters and we'd welcome the right chance to bring our secret sauce to more theaters in the future.

Even though baseball impacted attendance at our Milwaukee theaters in the early weeks of October, I think it is pretty well known that the fourth quarter box office has started very strong thanks to some of the films noted in our release. Our press release highlighted some of the films scheduled for release during the remaining 2 months of the fourth quarter. We're hoping to build decent cushion heading into December as we fully expect comparisons in December to be more difficult without a Star Wars picture this year.

One of the great things about the movie business, however, is that there is always the possibility of one or more surprises. So we're always optimistic. In fact, we're starting to see some of the films scheduled for release in November and December and so far they look very good. And of course, you probably heard about that the early buzz on the 2019 film slate is very positive. Regardless, you can count on one thing for sure: We will be prepared for whatever happens, unusual or not.

With that, let's move on to other division, Hotels and Resorts. You've seen the segment numbers, and Doug gave you some additional detail. It was a great quarter for this division, with record revenues and operating income. I'm very proud of our entire hotel management team, from our sales team that helped drive those record revenues to our operating team that did an absolutely outstanding job of converting those increased revenues to the bottom line. You can do the math. Excluding cost reimbursements, we were able to convert nearly 90% of our increased revenues into increased operating income. As a tremendous flow-through percentage, that is the result of a lot of hard work by many, many associates.

Doug shared some of the numbers with you. RevPAR was up over 5%. As is often the case with our hotels, we rise and fall with group business, and this was a very good quarter for that segment of our customer base. Harley-Davidson's 115th anniversary celebration in Milwaukee certainly helped. And as we noted in our press release, the very thing that likely had some negative impact in our theater business, baseball, appears to have had some positive impact on our hotel business.

Looking to future periods, our group room revenue bookings for the remaining period in fiscal 2018, something commonly referred to in the hotels and resorts industry as group pace, is currently running slightly ahead of our group room revenue bookings for the remaining period last year at this time. The same holds true for our 2019 group pace, which is also currently running ahead of where we were last year at this time for 2018. And since playoff baseball came to Milwaukee this year, our total business at our hotels has certainly benefited as well, the benefits of having complementary businesses, I guess.

From a growth perspective, as you know, 2018 has been a good year so far, with the addition of 3 new management contracts, and we saw some of the benefit of those new contracts and the new properties we added in late 2017 show up in our increased other revenues this quarter. We continue to actively review our opportunities to add to our portfolio of managed hotels in the coming year. We also continue to seek opportunities where we might invest equity in new hotel opportunities as well.

And finally, reinvesting in our existing hotels will always be an important part of our success as well. We're about to begin a significant reinvestment in our Hilton Madison hotel as we head into the slower season, and we are actively preparing for our 2019 conversion of InterContinental Milwaukee hotel into an exciting new independent, immersive-arts-focused hotel. The big reveal of the new name will be in November, and we're very excited about what lies ahead for this hotel.

Before we open the call for questions, I want to once again thank all our hardworking associates, both in the field and in our corporate office, that work so hard every single day making ordinary days extraordinary for our guests. It's very easy to spend all of our time talking about movies, group business, investments, et cetera, and forget about the people who make it all happen, without whom we would not be reporting the record results we have so far this year. Thank you to each and every one of you.

With that, at this time, Doug and I will be happy to open the call up for any questions you may have.

(Operator Instructions) And we'll go first to Jim Goss of Barrington Research.

I was wondering, in the absence of M&A deals that you might be able to close, is there any new-build potential in any of your existing markets where you might extend your franchise? Or is it conceivable to start a new market from scratch, maybe one that's somewhat contiguous but might offer some opportunity? Is that even an option these days?

Jim, yes, look, it's -- yes. The answer to your question is yes. But it's not a huge number, meaning that the world is -- does not need a ton of new movie screens. I think we know that. The -- but I would even broaden it to say that it doesn't have to necessarily be in a contiguous market. That's -- it's a great thing. But frankly, we look at opportunities throughout the country. We believe that -- we've operated businesses for many years throughout the country. At onetime when we had Baymont, we were in 28 states. So we're comfortable with operating at a distance, and we've had -- as I've said, we look at other opportunities. But I think it's not a -- it's an opportunity but maybe with a small "O," not a giant "O."

Okay. And to the extent that the now Marcus-Wehrenberg properties are pretty much up to speed, I'm wondering if you are detecting any differences in -- between those properties in St. Louis' somewhat bigger market versus some of the other markets that, aside from maybe Milwaukee and Chicago, don't quite match those characteristics in terms of reception to films. Or any other of those areas you've talked about as differentiating factors?

No. Actually, we think it's actually performed pretty much sort of -- it's performing like a Midwestern market. It performs -- the film -- we tend to see films that perform relatively similarly. I suspect if there was a Cardinals documentary, it might perform better there than it does here. But beyond that, no. It's, again, similar, the same impact. Baseball impacted similarly. One advantage that we have in St. Louis is, unfortunately for St. Louis, there's no football there anymore. And so that's something we always -- we've always fought up here on with the Packer Nation. But St. Louis doesn't have that. So we saw that as one of the benefits actually when we went with the deal.

Okay. And is -- to the extent that you are in some of the markets that might be competitive with, say, AMC, perhaps in Chicago or wherever else, that are introducing these loyalty programs, are you seeing any competitive impact against those loyalty programs -- or the subscription programs, I should say?

We have not seen that yet, but -- and our feeling on that, just to -- for anyone that has that question to nip that, is that subscription is an interesting phenomenon. It is a phenomenon in the country. And we -- as is true to us always, we were always looking forward. And the question is, really, what will subscription look like? I don't know necessarily if AMC knows what it's ultimately going to look like. This is where they came out of the box, but they even admittedly said, "Well, we don't -- this is our initial -- our opening ante." But we watch those markets very closely, and we're not really seeing much impact. But I would tell you that it probably also -- as it relates to that, it's probably more impactful on the coasts, because the price of the ticket is so much higher. And that was the same thing that seem to happen with MoviePass. On the coasts, we think that there was a much larger impact than in our markets. But all that being said, we're looking forward and saying, what is subscription going to look like? And we're talking to our studio partners and saying, "We need to experiment and try and figure out what that model does look like." And I could sit here for an hour and give you 19 different variations of what a subscription model might look like, maybe not as across-the-board broad as all you can eat, any movie you want to see any time, but you could imagine lots of different flavors of that. And we want to be out front of that and be thinking about what will be the successful model. I'm not sure what that is yet. I don't think anybody's proven it out yet.

Okay. One last one on that. Did the Internet -- InterContinental relationship lapse? Or did you terminate that relationship in order to move on to the next variation?

We would at the end of the contract.

(Operator Instructions) Our next question comes from the line of Brian Rafn with Morgan Dempsey Capital Management.

When you're coming up -- and you talked a little bit about the movie slate for the holidays. When you have a Dr. Seuss Grinch, The Nutcracker Four Realms, and I'm thinking in the past with Elf or Polar Express, do those kind of movies in the holiday season, are they -- are they maybe not blockbusters like a Star Wars, but does that help the movie slate?

Oh, absolutely. And look, they've -- those are typical November pictures. If you go back over the years and look at the slate, that seems to be the time period that they like to release the kind of pictures you're describing. And I think their thought process -- I mean, I can't get into their heads, is that they're getting people ready for the season, and I think they're hoping that they have some good legs as well that takes them beyond Thanksgiving and into the holiday season. And so those typically perform well. I mean, they've still got to deliver the goods, right? The movies still got to be good, but those types of films typically do well.

Okay. Now that you guys -- you're kind of developing your second BistroPlex, Brookfield Square, is that a concept, guys, be it geography, demographics, psychographics or whatever, that can be rolled out across your circuit? Or are there unique characteristics in your whole market in Milwaukee that might prevent that?

Brian, the concept of enhanced food and beverage is really one that's proliferating throughout the industry. Now I would tell you that we are on the -- we're among the leaders in that, and it's been really interesting to see that. But -- so the idea of a dine-in theater, those exist around the country. That is not just unique to our markets. So the answer to your question is, yes, that's got application throughout the country. But I would tell you that if you think about what's been going on in our theaters, just what we call a traditional theater, with our enhanced food and beverage, the line between a dine-in theater and a traditional theater is blurring, at least in our circuit. And we're testing lots of new ways to deliver the food, blurring that line even further, because we believe that in order to have that competitive advantage over who we believe our true competition is, which is somebody's couch, we have to give people the reason to get off the couch. And our team has been great at that. Rolando and that team has done a phenomenal job of getting people to move off the couch, but that's from making the investments in recliners and PLFs and enhanced food and beverage. So BistroPlex is an extension of that, but it's not unique to our market.

Yes, no, I get that. I think your food is still the best in the country, but I beg to differ on that. Let me ask you from the standpoint with the Brookfield Square one, I think it was the old Sears property. I think [General Woods], at the end of the Second World, he ended up buying all the real estate under a lot of his Sears stores. Were you guys able to acquire that real state? Or is that part of the larger Brookfield Square ownership?

In this particular transaction, we'll be leasing the real estate.

Got you. Got you. Okay. You mentioned, too, a lot of times with the movie slate having more children's picture -- or more adult pictures are better for food and beverage. With Incredibles 3, the Transylvania picture, do you see any little pick up in candy and concessions and that type of things for -- especially in the summer for more younger children's pictures than versus the loss on the food and beverage?

So you're right, I mean, that -- and historically, if we go in our time machine and go back 5 years, that's what we would have been talking about. We would have been talking about the fact that pictures like Incredibles 2 and these family pictures was helpful for our concession business, and that still is the case. But now that the enhanced food and beverage is such a large -- obviously, at higher prices in general and higher average ticket versus some of the enhanced food and beverage. So that's such a larger part of our mix. That's why we're now highlighting that it's an interesting dynamic where we -- we kind of -- they're actually kind of in competitive competition with each other, where when the film mix goes more towards adult-type stuff, we see probably a quicker or a higher increase on our average concessions per person, I use that word concessions broadly, because of that enhanced food and beverage. And just the opposite when we now have kids and family pictures, we see a nice increase -- we do well at the concession stand, but we just don't do as well at the -- I mean, not a lot of kids are at the bar.

It's -- actually in a funny way, Brian, I'm glad you brought it up, because it's a win-win for us, right? Now it's -- historically, it's great to get them into the -- to get the higher-margin concession items to kids, historically it was, but now we're actually -- well, when it's not a kid's movie, to sell higher margin beverages. And so we see a little bit of trade-off obviously depending on the movie mix.

Yes, I got you. Another -- one more kind of a strategic, more of a macro question. Jim talked about maybe new-builds contiguous. If you looked at all of the technology in a new multiplex that you have today, the UltraScreens, the DreamLoungers, the stadium seating, all of your vast array of Reel Sizzle and Take Five Lounges, what kind of -- if you went back, say, 15 years, 20 years ago versus, say, today, how much is the incremental construction cost up? And I know you don't have a hard figure, but might it be 30% more expensive today to build a 12-auditorium multiplex than maybe it was 20 years ago? And you'd take out, certainly, inflation from materials in that, but just with the tremendous technology that you have today.

Look, obviously, construction costs are higher today than they were then. But there's -- and there's certainly been trade-offs that we've made. We don't build as many screens as we used to build. The complexes aren't as large as they were 20 years ago. We were building much larger complexes. But we also -- we don't need to build as high a stadium. In fact, it's actually advantageous to have a lower stadium build in a -- with recliners just because of the screen -- because of the angle. So I don't exactly -- I don't have those numbers off of my head...

Yes, no, I'm just kind of curious. And just one more. With the St. Louis market Wehrenberg, is there a possibility of doing a flagship down there like Majestic? Or do they have something similar to that? Or is that flagship construction like you have, I think you have one at Sun Prairie, is that kind of episodic, hit or miss?

We actually -- we have one, Ronnie's, which is in St. Louis is a -- is what we would consider the flagship there [with all the bells and whistles] and it's been very well received.

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

Well, thanks, everybody for joining us. We appreciate it. We look forward to talking to you once again in February when we release our fiscal 2018 fourth quarter and year-end results. Until then, thank you, and have a great day.

That concludes today's call. You may now disconnect at any time.