Good morning, everyone, and welcome to the Marcus Corporation Second Quarter Earnings Conference Call. My name is Lauren and I will be your operator for today. At this time all participants are in 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 the program over to Mr. Neis for his opening remarks. Please go ahead, sir.

Thank you very much Lauren, I appreciate it. So welcome everybody to our second quarter conference call for our transition period ending December 31, 2015. As usual, bear with me as I again state 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 & Resorts division, our expectations about the quality, quantity and audience appeal of film products expected to be made available to us in the future, our expectations about the future trends in the business group and leisure travel industry and in our markets, our expectations and plans regarding growth in the number and type of our properties and facilities, expectations regarding various non-operating line items on our earnings statement and our 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 can impact our ability to achieve our expectations are included in the Risk Factor Section of our 10-K and 10-Q filings, which can be obtained from the SEC or the company. We'll also post our Regulation G disclosures when applicable on our Web site at www.marcuscorp.com. So with that behind, let's talk about our second quarter and first 26 weeks of our transition period that ends on December 31, 2015. More about that transition period and its impact in just a minute. First let me just say that having two distinct businesses definitely benefit us this quarter as record operating income for our hotels and resorts division helped to offset the impacts of a weaker film slate and significant number of screens out of…

Thanks, Doug. Before I begin my remarks on each division, I would like to quickly comment on the topic Doug just left off with, our year-end change. You know, we've had a May year-end since we first went public in 1972. It has had some advantages and it has had some disadvantages. As we considered making this change, we certainly felt that aligning our financial reporting schedule with virtually every other public company in our two respective industry peer groups was a good thing. Based upon the feedback we have received since we announced the change, I am glad the reaction has been positive, and that it will be easier to compare our results to others in our businesses. But I must tell you, if that was the only reason to make this change, I am not sure we would have done it. Going through a fiscal year-end change is difficult, and has some one-time costs that we will have to absorb in the transition period. Between auditing, legal, and investor relations-related costs alone, I could easily see us incurring $750,000 or more of one-time costs to make this change and that is not counting the countless hours that our dedicated associates will spend preparing for this change. I am so appreciative of their efforts. But as you know, we make decisions with long-term benefits in mind. And the key swing factor for us was how this change would benefit our associates over the long-term. Notwithstanding the fact that the weather finally gets nice around here in June and July, that is arguably the busiest time of the year for our businesses. Our accounting staff will appreciate closing the books in January and February. Our operating staffs of both divisions won't have to worry about preparing budgets, performance appraisals and…

[Operator Instructions] Our first question comes from the line of Mike Hickey from Benchmark Company.

Hey, Greg and Doug, happy holiday guys.

Hey, Mike.

I'm curious on Star Wars. Obviously, there is a fair amount of demand and that demand is selling over PLF and of course your recliners. Curious any insight on what you are seeing for average ticket price for that movie maybe in particular?

What I would just tell you, Mike, is that we have an upcharge for -- on average, we have a $3 upcharge for our UltraScreens -- UltraScreen DLXs and a $2 upcharge for our SuperScreen DLXs. So certainly seeing a large percentage of the tickets going to those screens is something that we are happy to see.

And also you've got 3D as well.

And also -- that is correct. Greg just mentioned obviously it is in 3D. We don't know what percentage ultimately 3D will be. We will see what happens. It will be interesting to see. But that certainly has a potential to drive average ticket price as well.

Good, good, good. All right, thanks. And on the theater side, obviously some pretty big margin declines and I think you gave pretty good evidence as to why that happened. And obviously you've been managing that piece of your business for a while. Curious maybe outside of Star Wars, but obviously that is a fact that you can't ignore. But thinking forward here, should we anticipate continued pressure or do you think this is sort of a one-time thing?

I think that overall, I think it's a one-time thing. I think -- as we talked about, the things that contributed to it in terms of the big contributors were the screens out of service. But we have to react better to the films as well. But I think if you look overall and say where are we going to be overall? It's a business of ups and downs, as we know, over time and we just caught a tougher period, I think. But I think overall, historically our game plan is to get back to the margins we know. That being said, we've got a higher food and beverage component and that does impact margins a little bit -- but not to what you saw this period.

Okay, thanks. The last question from me. Obviously, you have been very successful here with your outperformance relative to the market. But as you sort of -- I guess you think about maybe your amenity refreshes here coming towards not an end, but it feels sort of like it's late innings and maybe the comps of course are not getting easier. Maybe even you think sort of start thinking more of a normalized for growth opportunity from the theater side, do you find yourself with any greater immediacy to grow your theatrical network? And clearly M&A there are some deals being done before Star Wars, which was seemingly sort of an oddity. And now that Star Wars -- once we get through that, it seems like the window is going to open up. Just curious sort of how you are managing your expectations to try to grow the network now.

Well, it is our goal to grow the network. We’re looking at the opportunities as they come across. As you know, they aren't -- they are hit or -- there is a high variability in that, in this business, just due to the ownership structures. But we are looking at that and our goal would be to be able to increase the size and take the things that we've done. Because if you look over historically what we have been able to do to our assets, we would like to be able to apply that to other chains as well and bring capital to the table. And do the things that the markets are demanding now.

All right, guys. Thank, you. Good luck.

Thanks Mike.

Next question comes from Eric Wold, B. Riley.

Question on the hotel side. Obviously you have had this goal of kind of pushing ADR at the expense of occupancy for a while, successfully to push up ADR. I know it is going to vary by region kind of where do you think you are typically relative to the competition in our market in terms of ADR and kind of where you think you can continue to go. What is the -- how far along are you on that path of taking ADR up to where you think it should be?

Well, we overindex in all three metrics, Eric, in our markets. So we have on average -- I don't have the numbers in front of me. We actually have a slide in our investor presentation. But we are in the 110 to 120 index, with 100 being the same as everybody else in occupancy rate and RevPAR. So we -- but that is a function also of the fact that we tend to have the properties, the best properties in our markets, kind of the go-to properties. So -- but -- I am not so sure that you can just say that because of that, we can't keep pushing that. It becomes a balance between occupancy and rate. That becomes the bigger issue more so than where we are in our markets, Eric. So we have been pushing a pretty conscious strategy, in particular at a couple of properties where we are looking at it -- revenues in its totality. And so sometimes we are choosing to give up rate -- room rate -- in order to drive total revenues, i.e., food and beverage and you are seeing that in the numbers. And in some properties, we are actually looking to give up some occupancy in order to drive rate. So it's hard. Because when you put eight of these properties together, you get kind of this average. But it's really, if -- you know, it really is a property-by-property strategy.

Perfect. And then last question, still on the hotel side. I know you're looking at both finding additional opportunities for a managed property as well as possibly divesting some of yours. What is the environment like out there as the buyer? Are there a lot of attractive properties out there that are worth looking at, where sellers are reasonable both in their expectations and valuations? And how would you kind of describe that environment?

Well, that market has been pretty strong in terms of where the pricing has been. Now, the REITs are out of the market right now because their cost of capital has gone up as the -- because the price of their stock has been under pressure in the last number of months, quarters. But I am not sure there has been a big pricing change. And frankly, we are not looking to make big acquisitions of hotels right now to put out lots of capital in buying hotels. So we are not deep into the market. We still think the pricing is pretty good and again, we have these really good assets that we think will demand good prices when we want to be able to monetize them.

Perfect. Thank you both.

Thanks, Eric.

Next question comes from David Loeb from Baird.

Good morning. I have to say I lost the bet with myself on how many times people would say Star Wars.

Actually, David, we decided that the answer to every question now starts with Star Wars. So whatever you ask, we are just going to say Star Wars.

Okay. We are up to five, I think. But on that topic, can you give us an update on what advance ticket sales are to date? And I guess how long do you think this could run; how big a picture could this really be relative to what the lineup was last year?

Well, I will tackle the first part, which we are not actually allowed to provide that. We have been asked not to buy the studio. So I am not going to give you a number. It is substantial, David. It is substantial. There is no question about that. And I am not sure that we have seen anything like this.

I think they have talked publicly. It is a record.

Yes, yes.

But look, how -- boy, David, your guess is as good as mine. I have got a theory, but I mean it is only a theory. Please read the expectation section of your copy. My theory is, what I said earlier in the week, because we are going to see how it plays out. This movie is going to be -- it's going to be really good from a standpoint of how it is going to perform financially, no matter how good the movie is, right? And we had no idea. Nobody had seen it. There weren't any reviews out, nothing. I said but it if it is a great movie, it could really -- it could, has the potential, to really perform strongly beyond the first of the year, really into January, because -- and it has gotten great reviews. It has gotten great reviews. Rotten Tomatoes, I looked this morning, it's 95% fresh. It got four stars in the USA Today. It really -- I hadn't seen it yet, but all reports are it's really a great movie. It's got some real potential. So it should really perform, but we don't know. That's one of the fun things about our business, we just don't know how long it will last. But it has great potential, I will tell you that.

How far out are you selling advance tickets now? So if I wanted to go and buy a ticket for one of your theaters, how far in advance could I do that from today?

I mean the focus has been -- I am seeing advanced tickets being sold out well over a week. I mean obviously, the weekend is the big push, where everyone felt that they wouldn't be able to see the movie unless they bought them ahead of time. So as you get past the weekend, you start to. But I --

I don't know what our outside time limit on it is. I may know in a few seconds.

Yes, but I mean, just looking in terms of what we have done, it certainly has -- we certainly have sold tickets all the way through next week.

Right. I am wondering about Christmas night, the 26, New Year's Day, things like that. So, but it's --

We are selling through New Year's.

You are, okay.

Yes.

Okay. That is pretty interesting. And what is the premium for 3D? Is that also $3? Is it the same $3 as the other screens?

It is $3, David, on average in a traditional auditorium. But in our UltraScreen DLXs, it is only an additional $1.

Okay, that makes sense. All very good, let's hope people are hungry when they come as well, because that would be even better. I am assuming that film costs on this is pretty high.

That is a good laugh line, but the fact is that that is a key learning there. I mean we are really focused in on, with all these people in the theaters, we worked hard to try to get those additional Zaffiro's Expresses open and Take 5 Lounges, because man, we think that there is a real opportunity that we can capitalize on with these food and beverage outlets.

Right, and when you are running --

And we do market to it. We create drinks that are thematic to the movie that's playing.

I can only imagine. And what else are you going to do when you are at a three in the morning movie screening? You're going to -- got to have --

Exactly. And since as long as you mentioned that, David, we have 30 of our theaters -- I believe the number is that will be 24 hours starting today, tonight. I think we still have another 19 of those that will continue that way through the weekend.

So that is clearly not something that was in the year-over-year.

Correct.

In the year-ago period, yes. Got you. That makes sense. And film costs obviously directionally, is it fair to assume that this is going to be an expensive film for you? Doesn't mean it's not profitable.

Sure, it will be.

Okay. Enough about Star Wars. I had to say it one more time. Doug, just a kind of a thank you on the info that you filed in the presentation. That will be very helpful, although we might come back and ask more. On the hotel side, you certainly have ample capital capacity. We seem to be at a time in the market where the hotel REITs are out of the acquisition market and transactions are happening slowly, but there is a lot of product available to be acquired. Are you seeing interesting opportunities? And I guess really behind that question is what's your view of the cycle, such that is this a good time to be buying hotels? If you think the prices are coming down a little.

Can I ask you that question?

Happy to answer it off-line.

Our current strategy has been not to be deploying our own capital into buying full-service hotels right this minute. As we work with other people, if they think it's appropriate, we certainly would look for opportunities in the marketplace to make acquisitions.

Certainly a big part of what Bill Reynolds is doing, David, as you know, is that if he sources a property that is an acquisition candidate, he in turn then is looking and thinking about who might be the best partner to bring together with that. As he has been developing some of these relationships. And so if there is that type of a buying opportunity, while it is not likely that it would be a Marcus Corporation buy, a key element of what Bill is trying to do is trying to put the right people together then to make that deal happen.

Okay. And last question, also on hotels. Can you just give an update on the Milwaukee market? How is it absorbing all the new supply and what else is ahead? I guess there is the Kempton Hotel that is under construction, but is that it for a while? And how is that supply being absorbed these days?

The Milwaukee market supply is being absorbed, but we are seeing some weakness in the -- I won't say weakness in the market. It has muted our market's performance I think is better way of saying it. You compare us to what's going on nationally, we are seeing some struggles year-over-year. We are seeing more supply coming online, but not much more demand. And it is sort of just -- it is eating away at the market. Now we, on the other hand, have been able to stay above that, as you know, because we've invested in the assets. You're seeing a sort of a tale of two cities. The older, more tired inventory is more challenged. So if you look at the market as a whole, you are starting to feel the pressure of the increased supply. But if you look at sort of there is the haves and the have-nots, I would say, as well.

I mean David, just to put some numbers around that, as I shared with you, we pretty much matched our market from a RevPAR perspective. But the chain scale, upper upscale for our comparable second quarter, our compilation says that RevPAR was up 5.9%. So that is directly to what Greg is talking about, is that our markets may be -- that is where you are maybe seeing some of that dampening in our particular markets.

Okay.

Yes, you are right. The Kempton is the next one online and then there is the announced hotels. We got the Springhill Suites coming pretty soon over near the convention center. And then there's some other -- there is an announced Weston; there is an announced Extended Stay hotel that is taking up an old Italian pizza place that -- a building they are rehabbing.

Okay, great. Thank you for all that.

Thanks David.

Next question comes from Jim Goss from Barrington Research.

Thank you. The concessions accounting, I am sort of curious in that the food service operations are increasingly straddling both theaters and hotels. Zaffiro's, for example. How are you accounting and allocating some of those shares? And is there any interest on your part in almost carving it out as a separate third category between your hotels and your theatrical group?

Yes. So what we have been doing Jim, as we have continued to report all of those concession and food and beverage revenues on that concessions line on the face of our statement. Feeling, with our sense, feeling that that is better and more useful reporting to you, investors, versus pull it out and start co-mingling food and beverage with our hotel food and beverage on the face of the statement. Those of you that have been -- David will remember this back in the days when we had a restaurant division, that is what was happening. So when you looked at food and beverage, you saw it was a combination of hotels and restaurants. So I don't think -- from our perspective right now, since the food and beverage that we have for the most part is so inherently tied into just our overall theater operation, I don't see it being a separate segment. I will tell you internally, we absolutely manage it as separate businesses. We produce separate P&Ls for these outlets and we think that is the best way for us to try to manage the business because they do have different cost of sales, as Greg mentioned earlier, as a margin question. So it's -- I don't think it's of a size that would warrant separate SEC segment type, but -- so we are trying to report it the best way we can to you for it to be useful by combining it with our concession revenues.

Okay. But like, at Zaffiro's itself, if you have one that is next to a theater and it sort of ties into the theater, then you decide that that's either part of the theater or not? And --

Well, we've got -- if you are alluding to our standalones, we do have three -- we call them standalone, but they are built into the theater. We have three Zaffiro's restaurants and bars that where we actually took an auditorium out and put a restaurant into the theater. And we are reporting those revenues on that same line because while certainly there is a component of the sales and we've talked about in the past that is truly that's someone coming for lunch or for dinner and not going to movie, it still is pretty integrated with a theater. And so we have continued to report it. We have to pick one or the other and we continue to pick -- choose to have it be part of the theaters.

Okay. And if you look at the lost revenue impact in the quarter from the theater closings for the upgrades, is there a way to quantify that or I am sure there is a way. Are you willing to quantify that? And are you closing entire theaters during that process or are you doing certain auditoriums that's one at a time? How do you manage that process and not lose the audience to other habits by your customers?

Well, I tell you, certainly it's a challenge and even as fair amount of guys are listening to this call right now, they are shaking their head saying yes, it's tough because but we are what we are do not close our theaters; we do not I mean, we got some theaters; we have had some theaters where there is a lot of activity and we try to make this customer friendly as we can. But there is -- that is the reality when you are going through as much changes we are going through. We will do auditoriums -- selective auditoriums at a time. What is unique about this particular time period Jim was, first of all, we did more at one time than I can recall as ever doing in terms of how many different theaters were being impacted. These were also in general, our largest auditoriums because again the key focus here was in getting in the large format, UltraScreen and SuperScreen format in place for Star Wars. So it was almost without exception, our largest auditoriums with the most seats at each of these theaters that were being impacted. So they were all out of commission, out of service for varying periods of time as that was happening. When we do DreamLounger allocations, we tend to take a handful of screens at a time, could be four a time, 2, 6, it depends and can vary. But we tended to them in terms of -- take certain number of amount of service at a time.

And it becomes very distracting for the manager on site even if he tries to manage the construction; it becomes -- the bigger the project, the tougher it's for the manager and the management team on site. It's a challenge to operate in that environment. I think to go back to I think your question really is -- was reflecting earlier question which is how we're looking at this business. And the way we are looking at this -- take the long-term look and the historical look and say yes, other than some probably some a little bit of margin pressure from -- margin from a mixed shift to a little more often be. Predominantly, we are going to look at -- our expectations are -- our margins are going to be -- where they have been historically.

And I suppose you Jim; I'm not going to give you any specific numbers. But I will tell you this. That if you look at our -- if you look at maybe the top 20 theaters of ours in terms -- when I look at and rank the decline in the operating income that we saw in this particular quarter and just rank those. And if I look at the 20, that had the highest dollar amount outside of -- was half of them where these theaters. And so there is no question that was a disproportionate impact because of these particular theaters.

Okay. One last thing, I appreciate that. But one last thing, with the Paramount, Paranormal et cetera experiment sort of it recently in the rear view mirror, is there a way to work for the theaters theatrical group to work with the studios to be flexible about the window while participating in home video pre-sales? Though you both benefit and you are both in the same page.

All I'm going to say on that is, look, we have to be very careful as an industry with what we do. I will never say never to anything. I'm not going to say no or -- the industry has openly stated we are willing to talk to the studios about ideas but on the same time, I'm going to talk about to look historically what's going on. And to be very, very sensitive to thinking about the value of that window of exclusivity and how the customer views it. And I think if you go out and ask the average customer what they think the average window is, I think you would say window, they wouldn't know what we are talking about. They would be saying what the average -- what the average length of time before it comes out on your home TV. They would say two months, when it's four months. And so as you shrink it, you will continue to shrink that yield impact that that value looks exclusivity and you will start to see further pressures and we have already -- why you think $5 Tuesday is so positive, such a good thing because of -- people left our industries started watching at home. We are not immune to the laws of supply and demand. And as you fill that -- the fire hose is coming to your house with product. It becomes easier and easier for the customers say know what, unless I move to go out to theater. I'm not here telling you that they are not going to go to the movies, there is a kitchen in every house, people still go out to eat. But our marginal customers are most profitable and as you fill that pipeline with cheap content it puts pressure upstream. And so I would tell any studio I was seating with -- well, as we talk about anything let's be very, very careful because this is the only venue where you get paid per capita. And let's think about what the definition of the word window. The definition of the word window is to sell the same product to the same customer over and over. Well, as you start to shrink the window, you start to lose your duplicate sales. And the studios know this. And they want to help the theater business. And not only need to look at -- all of a sudden -- maybe we shouldn't have Netflix all that product so early, well, that's an window in issue in a way. And so they get it. It's an ongoing discussion. But it's important we keep all that in mind. I will now step back myself back and just say Star Wars.

All right. Well, thanks very much. I appreciate it.

Thanks Jim.

Next question comes from Spencer Markby from Gabelli.

Hi, thanks for taking the question. Just real quick, any changes thinking on the real estate strategy given the fed announcement yesterday to raise rates?

In terms of what? In terms of potential monetization of hotel assets or --

Yes, in terms of monetizing the real estate, the hotel assets, yes.

No. We don't know what the long-term impact is going to be of rates going up and love to see. I have looked historically as I'm sure you have it at the gap between where the -- where historical cap rates have traded for commercial real estate and where the -- and the risk free rate basically. And that gap has increased over time that spread has increased just -- and so there maybe some room for that rates to come a little bit on the bottom side not have that spread narrow too much. Now, where rates going longer term that's an issue. But for us, one of the other bigger issues that we have talked about is that we want to be tax efficient with what we do. So we are looking for the opportunity to make 10/31 transactions and light exchanges into real estate that we want to be in as we do this. So there is a whole bunch of things that come as not as strictly a rate play.

Great. Thank you.

[Operator Instructions] Next question comes from Brian Rafn from Morgan Dempsey.

Good morning, Greg. Good morning, Doug.

Hi, Brian.

Greg, you talked a little bit about managing a little weaker film slate, flip it around on the other side, you got star wars, what are the challenges to Star Wars crowding things out and how do you manage it, certainly running at 24 hours, what are some of the challenges you face with something that's just a blockbuster epic?

Well, I mean look, it's going to be tried -- I think our biggest challenge is going to be delivering a high-quality guest experience. People -- it's very interesting people love a crowd, people love to be part of something that's really big, so that we get some of that. But, when you have that many people coming through the door, for us our biggest challenges are going to be making sure that we give them a great experience. That we are able to sell them concessions because there is just only so many terminals. It's something we have been preparing for months. And we have been thinking about it and trying to work on it, but it is not without its challenges, but they are great opportunities. And I think a great opportunity for us really is that for the -- we are going to see people who haven't been to the movie theater in a long time. People who haven't been since -- they were younger and went to Star Wars, people who are just want to be part of the spectacle. And for us that's an opportunity to get some people back into the theaters who haven't been there and get customer -- build our customer base too -- make it larger. And so with that in mind, we got to take good care of them.

On that same thought Greg, did you have a 24-hour run when you say Titanic or Avatar and what in a 24-hour showing, what kind of concessions do you see traffic, you run a full staff, I'm just curious on the 24 basis?

Look, we have never done it before. We never had this kind of front-end knowledge, first, in the business, the world had changed, we are selling more tickets online upfront so that helps us -- get us a little more window into what kind of traffic we are going to see. I don't know what's going to happen from the concession standpoint, we just going to have to play it by year. And -- but our goals to do what we have been doing in this line and continue to maintain our share of wallet.

Okay. Talk a little bit maybe about your value Tuesday $5, maybe your progress on concessions sales, you had like Thursday college and then your retro series, how were those different things pacing?

Look, we will tell you is that the -- that number is a -- we sell less concessions on $5 Tuesday; it is a value oriented customer. But, we are making progress on getting that concession per cap to be a little bit better. And we continue to work at it and we are looking at new strategies, it's a -- we are making progress. And it's a work in progress. But, I call a high class problem, right? I'm trying to figure out; I got a lot of customers there. And I'm trying to figure out how to efficiently able to monetize those customers more efficiently.

Okay. Your new flagship in Sun Prairie, is that met by this expectations anything you learned from it versus say the Majestic when you launched it?

It certainly met expectations. It is -- we were always learning, I would tell you, but it met expectations. One nice thing about Sun Prairie, the one big difference, we did the Majestic that was a lot of R&D; we were really trying to figure out where the business was going. You see where -- we were right in a lot of ways. We were but those ways need a refinement. And I would say the Sun Prairie was really the refinement of those ideas.

Let me ask you, I get a 12-year-old that lives at Marcus and bring all those buddies and I get a pay for it. When you have a lot of the amenities you have in all of the restaurants and the different stuff, I see my guys going into a movie then they go a restaurant. Then they want to go to a second movie with the Marcus managerial award, can you track that phenomenon, or am I the only guy that [vote] [ph] for two movies?

Well, I'm hoping that as long as they are paying, we can track that phenomenon.

Yes, I thought. Okay. If you look at -- we certainly had a very mild winter -- weather with El Nino. Year-over-year comparisons that we have a mild winter through and your heating cost, snow plowing and will that have a meaningful comparison versus 2014?

It could -- it could have particularly on the -- I would say particularly on the heating. Snow plow was not -- snow plowing costs were not particularly high last year, I think it was two years ago that was very, very high. Last year it was, I think from a snow perspective it wasn't so bad. So we can go the other way, either if we have all the slip, we have a lot more snow, I could see that swing in the other way a little bit. But certainly I think -- I think we do have the potential to -- to have some savings on our heating cost if this holds on. With the big challenge for us, is snow where people can't get to the theater, right? That for us, like freezing cold and no snow is a recipe for success because you can't do anything and there is not really not much to do, yet you can get to the theater. That's -- but no snow is helpful.

Yes, you mentioned [school quotient] [ph] that's a probably a pretty good thing for you --

Yes, absolutely.

I got you. One more question, on the DreamLounger side, are those always installed with a Dolby Atmos Ultra or a SuperScreen or if you put those in a standard screen format?

All of our original UltraScreen's didn't have that Brian, but now, we only, I think only have four left that have not been converted to what we call DLX, which includes the Dolby Atmos and the recliner seats. So we have converted -- the handful that we did, that weren't like that we converted most of them. And so everything else as the whole combination.

When we have a super and UltraScreen DLX that comes with Dolby.

Correct.

Yes, I got you. And then Doug on the food beverage side, there has been some commodity deflation in food stock grains and meat and some dairy, has that helped you guys in margins at all?

Look, we ride that really close to like anyone else certainly to degree that's occurred we do benefit. It's just not when you roll it all up into our numbers and the size of the numbers, I'm not sure you are going to see that so much. But, just look at our concession cost, the line item that we do have of both food and beverage and concession and divide that by the revenues, you will see that we've done pretty well with those margins.

All right. My partner wants to give you one message.

Yes, may the force be with you guys.

Once again, Star Wars.

Star Wars.

David [indiscernible]. Thanks guys.

All right. Thank you.

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

So listen, we like to thank you all, again, for joining us today. We look forward to talking to you once again in February. It will be in February, when we release our final results for the 31-week transition period that ends on December 31, 2015, until then thank you. We wish you a very Merry Christmas and a happy New Year and Star Wars. Take care.