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General (Policies)
 9 Months Ended
Sep. 26, 2024
Accounting Policies [Abstract]  
Basis of Presentation
Basis of Presentation - The unaudited consolidated financial statements for the 13 and 39 weeks ended September 26, 2024 and September 28, 2023 have been prepared by the Company. In the opinion of management, all adjustments, consisting of normal recurring adjustments necessary to present fairly the unaudited interim financial information at September 26, 2024, and for all periods presented, have been made. The results of operations during the interim periods are not necessarily indicative of the results of operations for the entire year or other interim periods. However, the unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 28, 2023.
Depreciation and Amortization
Depreciation and Amortization - Depreciation and amortization of property and equipment are provided using the straight-line method over the shorter of the estimated useful lives of the assets or any related lease terms. Depreciation expense totaled $17,277 and $49,992 for the 13 and 39 weeks ended September 26, 2024, respectively, and $19,150 and $51,004 for the 13 and 39 weeks ended September 28, 2023, respectively.
Assets Held for Sale Assets Held for Sale – Long-lived assets that are expected to be sold within the next 12 months and meet the other relevant held-for-sale criteria are classified as assets held for sale and included within current assets on the consolidated balance sheet. Assets held for sale are measured at the lower of their carrying value or their fair value less costs to sell the asset.
Long-Lived Assets
Long-Lived Assets – The Company periodically considers whether indicators of impairment of long-lived assets held for use are present. This includes quantitative and qualitative factors, including evaluating the historical actual operating performance of the long-lived assets and assessing the potential impact of recent events and transactions impacting the long-lived assets. If such indicators are present, the Company determines if the long-lived assets are recoverable by assessing whether the sum of the estimated undiscounted future cash flows attributable to such assets is less than their carrying amounts. If the long-lived assets are not recoverable, the Company recognizes any impairment losses based on the excess of the carrying amount of the assets over their fair value.
During the 39 weeks ended September 26, 2024, the Company determined that indicators of impairment were present at one asset group for a leased theatre location that the Company made the decision to close during the second quarter of fiscal 2024. As such, the Company evaluated the fair value of these assets, consisting primarily of land improvements, leasehold improvements, building, furniture, fixtures and equipment, and operating lease right-of-use assets less lease obligations, and determined that the fair value, measured using Level 3 pricing inputs (using estimated discounted cash flows over the life of the primary asset), was less than their carrying values and recorded a $472 impairment loss, reducing certain property and equipment and certain operating lease net obligations. The remaining net book value of the impaired assets as of the date of the asset write-down (June 27, 2024) was $0.
During the 13 weeks ended September 28, 2023, the Company determined that indicators of impairment were present at one theatre asset group. As such, the Company evaluated the fair value of these assets, consisting primarily of land, building and furniture, fixtures and equipment, and determined that the fair value, measured using Level 3 pricing inputs (using estimated discounted cash flows over the life of the primary asset, including estimated sales proceeds) was less than their carrying values and recorded a $684 impairment loss, reducing certain property and equipment assets. The remaining net book value of the impaired assets as of the date of the asset write-down (September 28, 2023) was $3,040.
Goodwill
Goodwill – The Company reviews goodwill for impairment annually or more frequently if certain indicators arise. The Company performs its annual impairment test on the first day of the fiscal fourth quarter. There were no indicators of impairment identified during the 39 weeks ended September 26, 2024 or September 28, 2023.
Earnings (Loss) Per Share
Earnings (Loss) Per Share - Net earnings (loss) per share (EPS) of Common Stock and Class B Common Stock is computed using the two class method. Basic net earnings (loss) per share is computed by dividing net earnings (loss) by the weighted-average number of common shares outstanding. Diluted net earnings (loss) per share is computed by dividing net earnings (loss) by the weighted-average number of common shares outstanding, adjusted for the effect of dilutive stock options, restricted stock units, performance stock units and convertible debt instruments using the if-converted method. Convertible Class B Common Stock and convertible debt instruments are reflected on an if-converted basis when dilutive to Common Stock. The computation of the diluted net earnings (loss) per share of Common Stock assumes the conversion of Class B Common Stock in periods that have net earnings since it would be dilutive to Common Stock earnings per share, while the diluted net earnings (loss) per share of Class B Common Stock does not assume the conversion of those shares.
Holders of Common Stock are entitled to cash dividends per share equal to 110% of all dividends declared and paid on each share of Class B Common Stock. As such, the undistributed earnings (losses) for each period are allocated based on the proportionate share of entitled cash dividends.
The following table illustrates the computation of Common Stock basic and diluted net earnings (loss) per share, provides a reconciliation of the number of weighted-average basic and diluted shares outstanding, when applicable, and provides the weighted-average number of anti-dilutive shares excluded from the computation of diluted weighted-average shares outstanding:
13 Weeks Ended39 Weeks Ended
September 26, 2024September 28, 2023September 26, 2024September 28, 2023
Net earnings (loss) per share - basic:
Common Stock$0.74 $0.39 $(0.28)$0.52 
Class B Common Stock$0.69 $0.36 $(0.26)$0.48 
Net earnings (loss) per share - diluted:
Common Stock$0.73 $0.32 $(0.28)$0.46 
Class B Common Stock$0.69 $0.31 $(0.26)$0.46 
Numerator:
Net earnings (loss) $23,314 $12,234 $(8,773)$16,234 
Denominator (in thousands):
Denominator for basic EPS31,953 31,691 32,002 31,645 
Effect of dilutive employee stock options17 41 — 48 
Effect of restricted stock units47 — — — 
Effect of convertible senior notes14 9,242 — 9,242 
Diluted weighted-average shares outstanding32,031 40,974 32,002 40,935 
Weighted-average number of anti-dilutive shares excluded from denominator (in thousands):
Employee stock options2,800 2,965 2,809 2,965 
Restricted stock units— — 49 — 
Performance stock units139 — 141 — 
Convertible senior notes— — 14 — 
Total2,939 2,965 3,013 2,965 
For the periods when the Company reports a net loss, common stock equivalents, restricted stock units, performance stock units, and shares related to the convertible senior notes are excluded from the computation of diluted loss per share as their inclusion would have an anti-dilutive effect. Performance stock units are considered anti-dilutive if the performance targets upon which the issuance of the shares are contingent have not been achieved and the respective performance period has not been completed as of the end of the current period. Shares related to the convertible senior notes are excluded from the computation of diluted earnings per share in periods when the effect would have been anti-dilutive using the if-converted method.
Fair Value Measurements
Fair Value Measurements - Certain financial assets and liabilities are recorded at fair value in the consolidated financial statements. Some are measured on a recurring basis while others are measured on a non-recurring basis. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. A fair value measurement assumes that a transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability.
The Company’s assets and liabilities measured at fair value are classified in one of the following categories:
Level 1 - Assets or liabilities for which fair value is based on quoted prices in active markets for identical instruments as of the reporting date. At September 26, 2024 and December 28, 2023, the Company’s $7,332 and $5,364 respectively, of debt and equity securities classified as trading were valued using Level 1 pricing inputs and were included in other current assets. At September 26, 2024 and December 28, 2023, the Company’s $15,014 and $37,018, respectively, of investments in money market funds were valued using Level 1 pricing inputs and were included in cash and cash equivalents.
Level 2 - Assets or liabilities for which fair value is based on pricing inputs that were either directly or indirectly observable as of the reporting date. At each of September 26, 2024 and December 28, 2023, none of the Company’s recorded assets or liabilities were measured using Level 2 pricing inputs.
Level 3 - Assets or liabilities for which fair value is based on valuation models with significant unobservable pricing inputs and which result in the use of management estimates. At each of September 26, 2024 and December 28, 2023, none of the Company’s recorded assets or liabilities that are measured on a recurring basis at fair market value were valued using Level 3 pricing inputs. Assets that are measured on a non-recurring basis are discussed above under Long-Lived Assets.
The carrying value of the Company’s financial instruments (including cash and cash equivalents, restricted cash, accounts receivable and accounts payable) approximates fair value. The fair value of the Company’s $160,000 of senior notes, valued using Level 2 pricing inputs, is approximately $160,917 at September 26, 2024, determined based upon discounted cash flows using current market interest rates for financial instruments with a similar average remaining life. The fair value of the Company's $13,649 of convertible senior notes, valued using Level 2 pricing inputs, is approximately $20,183 at September 26, 2024, determined based on market rates and the closing trading price of the convertible senior notes as of September 26, 2024. The carrying amounts of the Company’s remaining long-term debt approximate their fair values, determined using current rates for similar instruments, or Level 2 pricing inputs.
Defined Benefit Plan
Defined Benefit Plan - The components of the net periodic pension cost of the Company’s unfunded nonqualified, defined-benefit plan are as follows:
13 Weeks Ended39 Weeks Ended
September 26, 2024September 28, 2023September 26, 2024September 28, 2023
Service cost$62 $122 $186 $366 
Interest cost445 453 1,334 1,358 
Net amortization of prior service cost and actuarial loss(16)(16)(48)(48)
Net periodic pension cost$491 $559 $1,472 $1,676 
Service cost is included in Administrative expense while all other components are recorded within Other expense outside of operating income in the consolidated statements of earnings.
Revenue Recognition
Revenue Recognition – The disaggregation of revenues by business segment for the 13 and 39 weeks ended September 26, 2024 is as follows:
13 Weeks Ended September 26, 2024
TheatresHotels/Resorts CorporateTotal
Theatre admissions$68,980 $— $— $68,980 
Rooms— 40,019 — 40,019 
Theatre concessions62,118 — — 62,118 
Food and beverage— 22,283 — 22,283 
Other revenues(1)
12,090 16,699 87 28,876 
  Revenue before cost reimbursements143,188 79,001 87 222,276 
Cost reimbursements655 9,737 — 10,392 
Total revenues$143,843 $88,738 $87 $232,668 
39 Weeks Ended September 26, 2024
TheatresHotels/ResortsCorporateTotal
Theatre admissions$158,156 $— $— $158,156 
Rooms— 88,728 — 88,728 
Theatre concessions141,230 — — 141,230 
Food and beverage— 57,718 — 57,718 
Other revenues(1)
26,524 44,338 250 71,112 
  Revenue before cost reimbursements325,910 190,784 250 516,944 
Cost reimbursements655 29,648 — 30,303 
Total revenues$326,565 $220,432 $250 $547,247 
(1)Included in other revenues is an immaterial amount related to rental income that is not considered revenue from contracts with customers.
The disaggregation of revenues by business segment for the 13 and 39 weeks ended September 28, 2023 is as follows:
13 Weeks Ended September 28, 2023
TheatresHotels/ResortsCorporateTotal
Theatre admissions$63,652 $— $— $63,652 
Rooms— 36,456 — 36,456 
Theatre concessions54,551 — — 54,551 
Food and beverage— 20,214 — 20,214 
Other revenues(1)
8,382 15,443 83 23,908 
  Revenue before cost reimbursements126,585 72,113 83 198,781 
Cost reimbursements— 9,985 — 9,985 
Total revenues$126,585 $82,098 $83 $208,766 
39 Weeks Ended September 28, 2023
TheatresHotels/ResortsCorporateTotal
Theatre admissions$180,274 $— $— $180,274 
Rooms— 82,959 — 82,959 
Theatre concessions156,633 — — 156,633 
Food and beverage— 53,980 — 53,980 
Other revenues(1)
22,904 41,857 263 65,024 
  Revenue before cost reimbursements359,811 178,796 263 538,870 
Cost reimbursements— 29,179 — 29,179 
Total revenues$359,811 $207,975 $263 $568,049 
(1)Included in other revenues is an immaterial amount related to rental income that is not considered revenue from contracts with customers.
The Company had deferred revenue from contracts with customers of $34,463 and $38,034 as of September 26, 2024 and December 28, 2023, respectively. The Company had no contract assets as of September 26, 2024 and December 28, 2023. During the 39 weeks ended September 26, 2024, the Company recognized revenue of $17,208 that was included in deferred revenues as of December 28, 2023. During the 39 weeks ended September 28, 2023, the Company recognized revenue of $14,545 that was included in deferred revenues as of December 29, 2022. The majority of the Company’s deferred revenue relates to non-redeemed gift cards, advanced ticket sales and the Company’s loyalty program.
As of September 26, 2024, the amount of transaction price allocated to the remaining performance obligations under the Company’s advanced ticket sales was $2,031 and is reflected in the Company’s consolidated balance sheet as part of deferred revenues, which is included in other accrued liabilities. As of September 26, 2024, the amount of transaction price allocated to the remaining performance obligations related to the amount of Theatres non-redeemed gift cards was $14,181 and is reflected in the Company’s consolidated balance sheet as part of deferred revenues. The Company recognizes revenue as the tickets and gift cards are redeemed, which is expected to occur within the next two years.
As of September 26, 2024, the amount of transaction price allocated to the remaining performance obligations related to the amount of Hotels and Resorts non-redeemed gift cards was $4,074 and is reflected in the Company’s consolidated balance sheet as part of deferred revenues. The Company recognizes revenue as the gift cards are redeemed, which is expected to occur within the next two years.
The majority of the Company’s revenue is recognized in less than one year from the original contract.
New Accounting Pronouncements
New Accounting Pronouncements - In November 2023, the Financial Accounting Standards Board (FASB) issued ASU No. 2023-07, Segment Reporting (Topic 280: Improvements to Reportable Segment Disclosures (ASU No. 2023-07), which requires disclosure of incremental segment information on an annual and interim basis. ASU No 2023-07 will be effective for the Company’s fiscal year ending December 26, 2024, and the Company’s interim periods beginning in fiscal 2025. The Company is evaluating the effect that the guidance will have on its consolidated financial statement disclosures.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740: Improvements to Income Tax Disclosures (ASU No. 2023-09), which requires improvements to income tax disclosures primarily related to rate reconciliation and income taxes paid information. ASU No. 2023-09 will be effective for the Company in fiscal 2025 and must be applied prospectively with retrospective application permitted. The Company is evaluating the impact that ASU No. 2023-09 will have on its consolidated financial statement disclosures.
Leases
The Company determines if an arrangement is a lease at inception. The Company evaluates each lease for classification as either a finance lease or an operating lease according to Accounting Standards Codification No. 842, Leases. The Company performs this evaluation at the inception of the lease and when a modification is made to a lease. The Company leases real estate and equipment with lease terms of one year to 45 years, some of which include options to extend and/or terminate the lease.
The majority of the Company’s lease agreements include fixed rental payments. For those leases with variable payments based on increases in an index subsequent to lease commencement, such payments are recognized as variable lease expense as they occur. Variable lease payments that do not depend on an index or rate, including those that depend on the Company’s performance or use of the underlying asset, are also expensed as incurred. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term.