Marcus Corp. lost $19.3 million during the first three months of 2020 as the coronavirus pandemic forced the Milwaukee company to close its hotels and theaters.
Marcus Corp.'s loss for the period ending March 26 amounted to 64 cents a share. That compared to net income of $1.9 million, or 6 cents a share, for the year-earlier period.
The company's first quarter revenue was $159.5 million, a 6 percent drop from $170 million.
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Its rising costs included property closure expenses and impairment charges tied to the pandemic.
The company's Marcus Theatres Corp. division in March closed all 91 cinemas, with 1,106 screens, in Wisconsin and 16 other states.
Its Marcus Hotels & Resorts Inc. division owns or manages 20 hotels, totaling 5,400 rooms, in Wisconsin and seven other states. It closed the hotels in March and April.
The pandemic's "unprecedented challenges" led to "some very difficult decisions during the quarter, including temporarily closing our movie theatres, restaurants and bars, as well as subsequently temporarily closing our hotels and resorts due to an increase in cancellations and a decrease in occupancy," said Greg Marcus, president and chief executive officer.
"We believe the actions we took were the right thing to do to help ensure the safety and well-being of our associates, customers, guests and communities,” Marcus said, in a statement.
In response, Marcus Corp. recently secured a $90.8 million loan provided through an existing agreement with several lenders.
“Amidst these unprecedented times, we are on strong financial footing that we believe will help sustain our business and weather the challenges created by the COVID-19 pandemic," Marcus said.
That bank loan led to further questions about whether the company should return federal cash designed mainly to help small businesses cope with the pandemic.
Marcus Corp., like other larger, publicly traded companies, will undergo a federal review over the $11 million in forgivable loans it obtained through the federal Paycheck Protection Program.
Marcus Hotels received PPP forgivable loans for nine properties. Those include three upscale downtown Milwaukee hotels: the Hilton Milwaukee City Center, Pfister Hotel and Saint Kate — The Arts Hotel.
That federal cash, totaling $11 million, is being used to keep 1,400 to 1,500 employees on the company's payroll for eight weeks.
The program was meant to mainly help small businesses. But it included a provision allowing larger hotel and restaurant chains to seek loans for individual locations.
Larger companies have faced criticism for taking those loans — especially since the program quickly ran out of its first round of $349 billion. Congress and President Donald Trump last month approved $310 billion in additional funds.
The U.S. Small Business Administration issued an advisory saying the money should be returned by Thursday unless a company can prove it was truly eligible for a loan.
Tom Daykin can be emailed at tdaykin@jrn.com and followed on Instagram, Twitter and Facebook.
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Marcus Corp. posts $19.3 million first quarter loss as coronavirus pandemic closes its hotels and theaters - Milwaukee Journal Sentinel
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