Greg Marcus - President and CEO Doug Neis - CFO.

Pat Sholl - Barrington Research Mike Hickey - Benchmark Eric Wold - B. Riley Ryan Hamilton - Morgan Dempsey Capital Management.

Good morning everyone and welcome to The Marcus Corporation First Quarter Earnings Conference Call. My name is Shannon, 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 would like to turn over to Mr. Neis for his opening remarks. Sir, please go ahead..

The Force Awakens resulting in a higher percentage of higher price adult tickets sold last year. We are pleased to report an increase in our average concessions and food and beverage revenues per person as well, up of 2.8% for the first quarter.

Our investments in nontraditional food and beverage outlets continued to contribute to higher per capita spending. Although once again, the fact that our top two films this quarter were kids and family fare, likely had a slightly negative impact on our sales of some of those nontraditional food and beverage items.

Lastly, I’ll point out that the roughly $3 million increase in consolidated other revenues this quarter was primarily from our theatre division. About half of that increase were related to comparable theatres and was due primarily to an increase in pre-show advertising income and internet surcharge ticketing fees.

The remaining increase in other revenues is distributable to the Wehrenberg theatres including preshow advertising income, Internet surcharge ticketing fees and rental income from the retail center that we acquired in the transaction.

Shifting to our hotels and resorts division, our overall hotel revenues were up 3.6% for the first quarter thanks to a 4.4% increase in RevPAR at comparable owned hotels and 3.4% increase in food and beverage revenues.

The increase in food and beverage revenues is due in large part to the opening of the new SafeHouse in Chicago as well as an increase in SafeHouse Milwaukee revenues because the Milwaukee location was closed during a portion of last year's first quarter for renovation.

As we’ve noted in the part, our RevPAR performance did vary by market and type of property, but I'm pleased to note that seven of our eight owned hotels reported increases in RevPAR this quarter compared to last year.

Breaking out the numbers more specifically, I will tell you that our fiscal 2017 first quarter overall RevPAR increase was entirely due to an overall occupancy rate increase of 3.1 percentage points.

Our ADR actually decreased slightly during the first quarter of fiscal 2017 compared to the first quarter of fiscal 2016 because it's generally more difficult to increase ADR during our slower winter season as overall occupancy is at its lowest. As a result, our focus was on increasing occupancy during our first quarter.

Despite this annual challenge, four of our eight company owned hotels reported increased ADR during the fiscal 2017 first quarter compared to the first quarter of 2016.

Now according to data received from Smith Travel Research and compiled by us in order to compare our fiscal quarter results, comparable upper upscale hotels throughout the United States experienced increasing RevPAR of 3.2% during the fiscal 2017 first quarter.

And I'll tell you that competitive hotels in our collective markets actually experienced a decrease in RevPAR of 2.9% during our fiscal 2017 first quarter. Thus, you can see that we outperformed in this division as well this quarter.

And finally I'm pleased to tell you that as a result of these increased revenues, operating losses attributable specifically to our eight owned hotels and resorts decreased, again operating losses during this quarter because of the winter. But these losses decreased in the first quarter of fiscal 2017 compared to the first quarter of 2016.

The only reason that we're reporting a fiscal 2017 first quarter hotels and resorts division operating loss slightly higher than division losses during the first quarter of fiscal 2016 is because of several onetime items that have nothing to do with hotel operations.

Specifically, as typical with opening up a new operation, we incurred onetime pre-opening expenses during the first quarter related to the new SafeHouse in Chicago. In addition, comparisons to the last year’s results were also negatively impacted by a one-time favorable adjustment last year impacting our management company profits.

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

Thanks Doug, I’ll begin my remarks today with our theatre division. We're obviously thrilled to be reporting another record quarter for this division. Once again outperforming the industry.

As many of you know coming into this quarter, most prognosticators were suggesting that the first quarter might be the most challenging quarter of 2017, particularly compared to the strong first quarter last year. So once again our industry has proven to be very difficult to predict.

That's why you've heard me say it many times before we need to be prepared to take advantage of times like this because as we all know history tells us that there will be quarters where the film product is not live up to expectations.

Our team was clearly up to the challenge this quarter and partly the particularly strong March at the box office into record operating results.

The improvement in March box office receipts was particularly noteworthy because last year's first quarter benefited from the fact that Easter was early as movie going generally increases when students are out of school. In fiscal 2017 Easter occurred earlier in our second quarter.

Clearly the investments we're making in our theatres are continuing to make a difference. And when you combine those investments with our innovative marketing and pricing initiatives along with our loyalty program that is now up to 2 million members with the integration of the Wehrenberg loyalty program.

The result is record breaking performance for our theatres.

Last year’s film slate during the first quarter was particularly weighted towards strong blockbuster movies as evidenced by the fact that our top five films during our fiscal 2016 first quarter accounted for 49% of our total box office results compared to 37% of the top five films during the first quarter of fiscal 2017.

Both expressed as a percentage of total box office receipts for the period. This reduced reliance on blockbuster films during the fiscal 2017 period had the effect of slightly decreasing our film rental cost during the period.

As generally to better a particular film performs, the greater the film rental cost tends to be as a percentage of box office receipts. Increases in other revenues that Doug referred to earlier also favorably impacted our results this quarter.

Thus despite higher fixed costs such as depreciation and amortization, rent and property taxes due in part to the Wehrenberg acquisition, our theatre division operating margin also increased slightly during the first quarter of fiscal 2017 compared to the first quarter of fiscal 2016.

This was a great achievement by our entire theatre team, from our Executive Management led by Rolando Rodriguez, all the way down to our associates at each of our theatres. Certainly a great deal of our focus during the first quarter was on integrating the 14 new Wehrenberg Theatres into our circuit.

We made a conscious effort to not change too much too fast and we first took over the operations of these theatres. We were literally in the middle of some of the busiest weeks of the year at the time. I'm pleased to tell you that our integration efforts are going well.

As we shared with you last time we talked, the one thing we did do immediately was roll out our $5 Tuesday program. The very first Tuesday after we closed on the transaction and we're pleased with how that program has grown in the short time since we've introduced it.

In the months since the closing, we have been methodically making other select changes to the business including increasing operating hours and implementing many of our successful marketing and promotional programs.

That includes recently converting the 200,000 members of Wehrenberg’s previous loyalty program to our successful magically movie rewards program and rapidly increasing the sign of pace of new members. We're already beginning to see some of these efforts pay off.

The Wehrenberg Theatres were generally tracking below the industry average at the box office prior to our acquisition. And without making a single capital improvement yet, we've begun to see a reversal of that trend. Our next focus will be on capital improvements at these theatres.

Renovations are already underway at one key Wehrenberg theatre which will include adding DreamLounger recliner seating, our SuperScreen DLX conversion, our lobby remodel and expanded food and beverage offerings. And we're getting ready to get started on additional theatre renovation shortly.

As you may remember, we owned the real estate for six of the Wehrenberg theatres and we leased the other eight. One of reasons we like owning our real estate is because we can be much quicker about making capital improvements when we own.

When you have a lease, you have to work with a landlord first in order to renegotiate terms such as who pays for what and what the impact on rent will be post renovation.

At the same time, while we certainly are paying a lot of attention to the new Wehrenberg Theatres, we also continue to look for opportunities to expand our successful amenities to more original Marcus Theatres.

In fact, in addition to the Wehrenberg Theatres under renovation we are currently in the process of converting seven more Marcus Theatres to all DreamLounger recliner seating, with expected completion dates by the end of our fiscal 2017 second quarter.

Doug mentioned that we had a number of screens out of service during the first quarter because of this effort. We also expect to open one new Zaffiro’s Express and convert three existing screens to SuperScreen DLX auditorium during the second quarter of fiscal 2017 and there's more to come.

We anticipate beginning construction on additional DreamLounger conversions, SuperScreen DLX conversions and new food and beverage outlets in the near future. And finally, our press release highlighted the fact that we opened our newest theatre with all the latest amenities in Shakopee Minnesota early in our fiscal 2017 second quarter.

The theatre looks great and we're pleased with the initial customer response to it. And we’re only a couple of months away from the opening of our newest concept, our all in-theatre dining BistroPlex in Greendale, Wisconsin, we're looking forward to that.

As we look ahead, we're excited to continue to invest in both new and existing theatres during fiscal 2017 as we further expand the successful concepts and amenities that have contributed to our industry outperformance. Our press release highlighted some of the films scheduled for release during the second quarter.

On paper they look good, but coming back to how I started my remarks, it is difficult to predict a box office. We hope 2017 turns out to be another record year at the box office like some are suggesting. And if it does, we'll be prepared to capitalize like we did in the first quarter.

But if one of the quarters disappoint, we’ll be prepared for that as well. We’re looking at this business like we always do with a long-term perspective.

And with that same long-term perspective in mind I would be remiss if I didn't note that we continue to be very interested in expanding our circuit with selective acquisitions if appropriate opportunities arise. With that let's move on to our other division hotels and resorts. If you see the segment numbers and Doug gave you some additional detail.

Given that most of our company owned hotels are located in Midwest, we typically lose money in this division during the winter months and the first quarter of fiscal 2017 was no exception.

But as Doug shared with you, thanks to a great effort led by our Executive Management - by a great effort by our Executive Management led by Joe Khairallah as well as our sales team and the hard working teams at each of our owned and managed hotels, we outperformed the industry and increased occupancy and reduced our operating losses in our company owned and operated hotels.

We continued to do a nice job of managing costs and increasing profitability while continuing to maintain our high levels of customer service. Additional group and transient business drove our increased occupancy during the fiscal 2017 first quarter compared to last year.

I’ll also note that the timing of Easter has the opposite effect at hotels and resorts versus the impact on theatres that I mentioned earlier.

In that business travel tends to decline around Easter, thus the fact that Easter was in the first quarter last year and in the second quarter this year, helped our fiscal 2017 first quarter comparisons and will hurt our second quarter comparisons a little bit.

Looking to future periods, although our group room revenue bookings for future period in fiscal 2017, something commonly referred to in the hotels and resorts industry as group phase is running slightly behind our group room revenue bookings for future periods last year at this time.

Our owned hotels had a slightly above average group looking period during the first quarter of fiscal 2017. And as a result, we have reason to be hopeful that we will be able to make up the shortfall in group room revenue bookings for future periods in the coming months.

By now, you’ve read and heard that a big event during fiscal 2017 first quarter was the opening of our newest SafeHouse restaurant and bar in Chicago. As Doug shared with you, pre-opening cost from this property negatively impacted our reported result this quarter, but that is part of opening the new operation.

We had a soft opening on March 1 and a grand opening celebration on March 30. So it's way too early to draw many conclusions about the place yet. I will tell you this, the restaurant looks great and the early response from customers on social media has been everything we'd hoped for and a little more.

The SafeHouse in Milwaukee has been around for over 50 years, so we’ll obviously be patient as we build awareness about a concept to [indiscernible] presence consisted of a nondescript door, a couple of wall lamps and a sign for international exports. But we're excited to have this new location opened and look forward to the months ahead.

Our hotels and resorts division operating results should benefit in future periods from two current growth initiatives. We continued construction on 29 new all season villas at the Grand Geneva resort and spa, and we expect to begin opening completed units during our fiscal 2017 second quarter.

We are also preparing for the summer 2017 expected opening of the new Omaha Marriott Downtown at the capital district in Omaha, Nebraska. A hotel that we will manage and in which we will hold a minority interest.

Also from a growth perspective, we continue to actively review opportunities to add to our portfolio of managed hotels in the coming year and we hope to have one or more of these come to fruition in the coming months.

Conversely I will also share with you that early in the second quarter of fiscal 2017 we ceased management in the Sheraton Madison Hotel in Madison, Wisconsin and sold our 15% minority ownership interest in the property for a small gain. We do not expect this transaction to significantly impact our fiscal 2017 operating results.

We also continue to actively review opportunities to sell one or more owned hotels depending upon a number of factors that we've previously described. It is no secret the hotel transaction market has not been particularly robust in the last year. So we’ll continue to show patience as we review such opportunities.

Before we open the call for questions, I want to conclude my remarks by highlighting the final balance sheet section of today's press release. During the first quarter, we showed once again the willingness and ability to return capital to shareholders while still pursuing an active growth strategy.

For the third time in two years, we increased our quarterly dividend this time by 11.1%. And despite a continued active CapEx plan and a significant acquisition in 2016, our debt to capitalization ratio remains at 42%, giving us a great deal flexibility to preserve future opportunities, wherever they may arise.

Lastly, I want to say thank you to all the hardworking associates of the Marcus Corporation. The results we are sharing with you today are the direct result of a lot of hard work in both of our divisions and for that, I am grateful. With that, at this time, Doug and I would be happy to open the call up for any questions you may have..

[Operator Instructions] And we’ll go first with James Goss of Barrington Research. Your line is now open..

Hi. This is Pat Sholl in for Jim Goss. Thanks for taking the questions. I just had a couple of questions on the integration of Wehrenberg.

With the new initiatives that you guys have been putting in place, has a lot of the improvement that you've seen in terms of the performance relative to the industry, has that mostly been coming from attendance gains, I think that was kind of what you had been seeing when you rolled these out at the markets here, so is that correct..

Yes, Pat. That would be correct. We have not made any major pricing changes at all at Wehrenberg. And since we have yet to have any new DreamLounger locations open up yet, they were just under construction with our first one, there certainly have been no price adjustments related to that either. So it's really been attendance..

What would be sort of the pacing that you would like to add --.

Hey, Pat.

I'm going to even jump in there and follow up and say if anything, because we've rolled out the $5 Tuesday program, I don't have the numbers in front of me, but if anything probably, it's -- even maybe had a slightly negative effect on our average ticket price, because just like when we first rolled out the $5 Tuesdays to all of our regional Marcus theaters, as we grow that business, the mix changes slightly.

So it definitely has been attendance that’s been driving it..

And I would even add to that a little bit, which is, look at that, that is one of the focuses of the business is we realize the importance of attendance. And that is whether we talked about scheduling show times and $5 Tuesday appropriately pricing, is it maybe the better way to look at it to drive attendance.

And because that has lots of ancillary benefits as you know..

Okay.

And then putting in those initiatives, has that been kind of what's been driving the acceleration in the membership for the Wehrenberg, I think you posted that at around 200,000 at Q4, is that still roughly where it is?.

I don't have an update of the number at my fingertips right now, but yes, it’s certainly -- there's been a strong push path to get new sign ups and just like what kind of playing out exactly as it played out with our original Marcus theaters, Tuesday is a major initiative in that regard, because as you know you get the free popcorn if you're -- only if you're a member and so I think while we're signing people up every day of the week, Tuesday is a key day for us in sign ups..

Thank you. And our next question comes from the line of Mike Hickey of Benchmark. Your line is now open..

I guess I just wanted to check your recliners solution guidance for Q2.

Actually Q1, do you have, Doug, where you were in terms of total installations for your network?.

At the end of Q1, it was the same as at the end of Q4 last year. So we had no new ones open up in the first quarter. So we're still at that 48% penetration of the original Marcus circuit and only one of the 14 Wehrenberg theaters with the recliners.

But that's going to be changing, we've already -- we've opened up a new theater, as you know, in Minnesota that has all recliners.

And then as we mentioned, we have actually eight theaters right now under construction or under renovation with recliners, seven Marcus and one Wehrenberg that are all scheduled to open thereabout by the end of the quarter.

They will kind of come on during the quarter, but certainly probably won't have a lot of impact in the quarter itself, maybe a little bit mid quarter..

All right. So you've got 8 –.

I don't have a screen count at the top of my mind here for you, but I mean we're on pace as we've talked about when we talked about in our K and everything else that, I mean if all these projects hit and we can get them going, I still see us that by the end of 2017 or early in 2018, we're targeting including Wehrenberg to be in the 60 plus percent range in terms of penetration..

Okay.

So that was 18 potential new installations for recliners this fiscal year, right, is that the number you had before?.

Yeah. Nothing has changed from what we indicated in the K at this point in time.

Again, timing is the wildcard, Mike, as you know and Greg alluded to in his prepared remarks in terms of the challenge for example on the Wehrenberg side is that 8 of them are -- 8 locations are released and so we've just got to let that process play out and so we don't have complete control over that timing.

We're working hard to try to get the bunch of these projects go and as soon as we can. So, nothing has changed in terms of -- possible that we listed in the 10-K..

All right. That’s fair. Thank you. The second question, looks like the Q1 concession gross margin was down a bit compared to prior year. Theater operations however was up.

That sort of performance for the quarter, should that be a trend as we think about the integration of Wehrenberg through the remainder of the year or how should we think about the margin performance profile? Thank you..

So, if you look at -- you’re talking about that concessions cost as a percentage of the concession revenues, that number..

Yeah. I look at it from a gross margin perspective, which was down a bit, couple of hundred basis points maybe..

Well and I will just tell you that that can and does bounce around. I’m looking at that same percentage for fiscal 2016 and we had two quarters that I'm looking at from a cost perspective, you have the invoice, but on the cost perspective, in the second and third quarters, we were at 28.4% and 28.5% and this quarter, we were at 27.2%.

So we were lower than the second and third quarters. You're right. It was high. That cost was higher in the fourth quarter. So mix makes the difference.

And certainly, we're going to have a slightly new world, as it relates to some of the food and beverage that's going on at Wehrenberg and we’ll be kind of changing that out over the year, but they have some existing solutions -- some existing food and beverage.

So you're right, the mix could be changing a little bit, but I wouldn't -- I don't think that it was -- we don't view it as if there was any major shift occurring there..

Okay. And the -- on the theater operations, I guess the same question, the cost was lower, your margin was actually better compared to prior years. I'm just trying to think through the integration here and –.

I get it, although again if you look at the first quarter last year, cost was 85.9%, the first quarter this year was 85.7%. So it actually was quite comparable as it relates to the quarter.

So I do caution that there is some seasonality to this and so, we get that in the fourth quarter, we get those huge weeks that certainly have the fixed cost of the fixed cost and then we have that huge December and those couple of huge weeks that certainly can have an impact on that percentage.

So when I look at that number, I actually saw that it was pretty comparable to look at the first quarter’s number with last year..

Okay. Fair enough. I guess, we'll see how it works out.

The last question for me, I think Wehrenberg had three IMAX screens, and of course we had [indiscernible] takeaways from seeing how IMAX has performed versus your UltraScreen, kind of that has sort of maybe changed the mix as you think forward about maybe integrating IMAX in to your greater circuit. Thank you..

We're always open to the idea of working with IMAX. It's -- we haven't made any decisions yet. It's interesting that we have inherited now and we're working with it and we're seeing how things are going with it.

It's really too early to tell how it all plays, because really the argument for IMAX is, it's sort of -- it's halo effect on an entire complex. And it has its positives and negatives. I mean, its negatives are you're stuck with whatever they're playing.

We have a really -- when we use our screens, our ultrascreens and our super screens, we have a fair amount of flexibility over what can play. And so that's very helpful, especially in the digital world. The IMAX doesn’t have that flexibility, but the IMAX has a very solid brand.

And so we’ve really -- all of 12 weeks under our belt, we’re really meeting more like 16 to 18 weeks, too hard to tell right now, Mike, where we're going to go with it. I did check and we're up to 2.1 million MMR members for people that are keeping..

Thank you. And our next question comes from the line of Eric Wold of B. Riley. Your line is now open..

Hey, good morning, guys. Just a few questions. One, a follow-up on one of the original ones around pricing at Wehrenberg, I understand you implemented the $5 Tuesday, so have a I guess initially adverse effect on average pricing.

When you think about base level pricing, where were they relative to the markets they're in and maybe relative to where you think they should have been? Is that an opportunity to increase the base level pricing, possibly in to the summer months or is that something you want to wait for the upgrade of amenities to getting those theaters before you take that price?.

I think, their pricing, they had fair pricing and I don't think we're going to make aggressive price changes with them off of that, but we're going to improve the theaters and again, I think we got to go back to our theory of the right price for the right customer at the right time and so when we had an UltraScreen or a SuperScreen, we have the ability to get a premium for that premium experience.

When, but on Tuesdays, we're going to have a great deal for customers. They're looking for a price that that would be appropriate for a Tuesday and then on the weekends, we will continue to remain competitive and again as we had DreamLoungers, again every time when we add the amenities, we look for the ability to take the prices..

Okay.

And then when you put in play, I know it’s again early days here, but when you put in place the $5 Tuesdays promo at those theaters, what was the response relative to what you saw when you first implemented at Marcus, I mean is it similar level of response and demand improvement on those Tuesdays relative to the weekends and we kind of looked at it to get a sense of, only one change you made, but it kind of, you think back to where Marcus was back, then you started making changes and now you’ve immediately grown the results that Marcus, legacy Marcus theatres.

How should we think about comparing that to what you think is opportunities with Wehrenberg from where they are?.

I think the opportunity is relatively similar. They did have a $5, they had a discount Tuesday program going, $6 actually. They had -- so it wasn't totally brand new, but it wasn’t -- we take a different approach to it obviously and we're very aggressive about marketing it and sharing it with the customers what we do.

The one thing interesting about what we've been doing is, we're now what 3.5 years into this. So it's a program that’s evolved and it started off and it was strong and it got a lot of attention and this is doing the same thing there. We're seeing good results there, but it takes time..

And then last one on the theaters, remind us kind of what your situation is with the reserved seating, reserved seating fees and those kind of becoming topic out there, what percentage of your admissions in the quarter were reserved and kind of how we should think about the fee flow from that?.

So we’ve put in reserve seating when we go to the DreamLoungers. And we have -- and we referred to the fact that our other revenues certainly continue to increase and Internet ticketing surcharges are a big part of that. It’s certainly a key part of that number.

And so I think that's what you see happen Eric is that when you go to reserved seating, I think there becomes a shift towards more people using buying their tickets ahead of time and buying their tickets online and that's where that corresponding benefit then in turn occurs.

So as I mentioned, I mean if you look, we had $3 million of increased other revenues for the entire company, with pretty much all theaters and a 1.5 million of that was our existing core circuit, pre-show advertising and the Internet surcharge and the 1.5 million was Wehrenberg with pre-show advertising, the Internet surcharge and then the rental revenues as well.

So I mean that's important money, that’s important dollars that flow through to the bottom line..

Do you know what percentage of your admissions for the legacy Marcus circuit was -- were from reserved fees?.

It starts to get up. I don't have that off the top of my head, but maybe someone who's listening is going to send that into me, while I'm sitting here, but we used to hover in the single digits.

I think it gets up in the 40% to 50% range where you're getting, look, everything is reserve, it’s 100% reserve, but how many you're buying ahead of time I think is the good thing you’re trying to find out..

Okay. That makes sense.

And then last question on the hotel side, I know you mentioned that you’re coming out of the Wehrenberg, it’s kind of tough to take price out of ADRs to move those up, as you move out of that, what are your thoughts on, now that you’ve kind of completed the construction, getting into hopefully a stronger year, is that something that you want to lead on in terms of price or is the market competitive enough that you kind of want to sit back and see how that flows?.

Well, as a question are we going to be pushing ADRs, is that the general question?.

Pretty much yeah or kind of wait until to see how the market responds for us to kind of not be the leader, be more the follower or not?.

We would like to push rate, we try to push rate. These are decisions that are literally made daily and hourly.

We're constantly looking at and seeing what happens and watching pace and seeing if we have -- and look, if we have the opportunity to push rate, we're going to, but I don't know how, I've been surprised that the world has not been able to push rate more than it has.

But I think probably the transparency brought on by the Internet has made that a little bit challenging. And then in Milwaukee, we’ve gotten a lot of products. So occupancies are holding up, but you're not going to be able to push, to absolutely just push rate like crazy, which is we wish we could..

[Operator Instructions] Our next question comes from the line of find of Ryan Hamilton of Morgan Dempsey Capital Management. Your line is now open..

You guys were just kind of touching a little bit on one of the questions that I had.

I was just curious if there's any other dynamics that you're kind of seeing with your rewards program and your online ticket sales that are forcing you to or not forcing you, but making you adjust kind of your business or the way you kind of do things?.

I’m not sure I completely followed it. Say it again, Ryan..

Like for instance, perhaps, you're seeing more online sales where people are picking up at a kiosk or something like that.

Is that making it, so you have less people, maybe working at a collar or register or something like that?.

Well, look, I think that you're asking an interesting question. Yeah. We do -- we obviously see that, especially Tuesdays, it really is quite aggressive in terms of people buying online and trying to get their tickets early.

But I think that ultimately I do think that this -- that there's going to be just like in a lot of businesses, there's going to be a movie technology that's going to ultimately reduce the reliance on labor. I sort of suspect and we’re starting to see touches of it.

When you walk up to a box office, it might look more like you're walking up to, ticket counter with an airline..

Okay. Yeah. I was kind of thinking, maybe you’re adjusting more people to concessions versus at the door or something like that. My other question was, what are the plans right now with that recently acquired retail space? In St. Louis. Yeah..

We’re managing it. If you remember, real estate is, well, well, it’s called real estate, one of our, the hidden business and so we're managing it and we haven't had any terminations to what we’re going to do with it. Yeah..

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

Well, thank you everybody for joining us today. Really appreciate it. Maybe, we'll see some of you next week at our upcoming annual meeting. It’s on Thursday May 4th at our Majestic at Brookfield cinema. For those of you can't attend, we certainly will be webcasting the meeting as always.

We also look forward to talking to you once again in July when we release our fiscal 2017 second quarter results. Until then, thank you and have a great day..

That concludes today’s call. You may now disconnect your lines at any time..