MILWAUKEE / Sept. 26, 2001--The Marcus Corporation MCS today reported increased revenues and earnings for the first quarter ended August 30, 2001.

Total revenues for the first quarter of fiscal 2002 increased 7.6% to $117,091,000, from revenues of $108,828,000 for the first quarter of the prior year. Net earnings and earnings from continuing operations increased 28.6% and 33.0%, respectively, to $14,723,000 or $0.50 per diluted share for the first quarter of fiscal 2002. For the first quarter of fiscal 2001, net earnings were $11,449,000 or $0.39 per share and earnings from continuing operations were $11,072,000 or $0.38 per diluted share. Continuing operations include The Marcus Corporation's limited-service lodging, theatre, and hotels and resorts divisions. Fiscal 2001 net earnings include the company's former KFC restaurant operation, which was classified as a discontinued business.

"We are pleased with the improvement in results for the first quarter, and especially with the record performance of Marcus Theatres," said Stephen H. Marcus, chairman and chief executive officer. "We were able to achieve these results in spite of the softening economy, as companies cut back on business travel and other operating expenses during the summer."

Buoyed by a particularly strong late-summer surge in attendance, Marcus Theatres had an excellent summer season. The division achieved record first quarter operating income, which was 39% higher than last year's first quarter. "Our total theatre revenues were second only to the first quarter of fiscal 2000, which included the exceptional results of Star Wars 1: The Phantom Menace," said Marcus. "Excellent cost controls contributed to the record operating income for the quarter."

Top-grossing movies in the first quarter included Jurassic Park III, Rush Hour 2, Planet of the Apes and Shrek. "We are encouraged by the quality and quantity of pictures scheduled for release this fall, capped by several highly anticipated films opening in November including Monsters, Inc. and Harry Potter and the Sorcerer's Stone. With these and other potential hits in the pipeline, we are optimistic about the outlook for the theatre business during the remainder of calendar 2001," said Marcus.

The increased revenues for Marcus Hotels and Resorts reflect the opening of new properties including the Hilton Madison at Monona Terrace in Madison, Wis., and Timber Ridge Lodge and Water Park in Lake Geneva, Wis. Performance at the Hilton Milwaukee City Center improved significantly in the first quarter of fiscal 2002, as a result of strong convention bookings and the new guest room and indoor water park addition which opened during fiscal 2001.

"The improvement in operating income for Marcus Hotels and Resorts is especially significant in view of the pre-opening expenses we recorded for the Hotel Phillips in Kansas City, Mo., which opened September 13, and for Timber Ridge Lodge," said Marcus. He noted that The Marcus Corporation's net earnings during the first quarter and all of fiscal 2002 will benefit from a lower effective tax rate due to anticipated historic tax credits related to the Hotel Phillips renovation.

Revenues and operating income from the Baymont Inns & Suites division decreased during the first quarter. "Like others in the mid-price lodging segment, Baymont experienced a downturn in business travel during the quarter and especially in August. Baymont's revenue per available room (RevPAR) declined 2.7% for the first quarter," said Marcus. The Marcus Corporation's net earnings did benefit from a gain on the disposition of a joint-venture Baymont Inn & Suites property during the first quarter of fiscal 2002.

"The outlook for both of our lodging divisions is uncertain at this point due to the tragic attack on America on September 11. Business and leisure travel has decreased dramatically and all of our full-service properties have experienced cancellations of group events. And even though Baymont is less reliant on group events, business travelers are the division's number-one market and as a result, the division's performance will also be affected. On the other hand, we are seeing a few signs that travelers are beginning to get back on the road and we are encouraged that many group events are being rescheduled for future dates," said Marcus.

"In response to these industry conditions, we are continuing to aggressively control costs and adjust our sales and marketing efforts as appropriate. In addition, we recently announced the outsourcing of Baymont's reservation operations, which is expected to significantly improve service at no additional cost. We are also using technology to improve efficiency throughout the organization," said Marcus.

"This is an unprecedented time in our country and in our industry. The weeks ahead will be one of the most challenging periods we have ever experienced. However, we are confident that ultimately the industry will come back as the economy ramps up and companies resume their prior levels of business travel," said Marcus. "In the meantime, our diversity will be a benefit as our theatre operations help to offset the downturn in our lodging business. The excellent outlook for film product bodes well for our theatres."

Marcus Corporation management will host a conference call today, September 26, 2001, at 3:00 p.m. Central/4:00 p.m. Eastern time to discuss the first quarter results. Interested parties can listen to the call live on the Internet through the investor relations section of the company's Web site: www.marcuscorp.com, or by dialing 1-913-981-5529. Listeners should dial in to the call at least 5 - 10 minutes prior to the start of the call or should go to the Web site at least 15 minutes prior to the call to download and install any necessary audio software. The call will be available for replay through Wednesday, October 3, 2001 on the company's Web site or by dialing 1-888-203-1112 and entering the passcode 775859.

Headquartered in Milwaukee, Wis., The Marcus Corporation is comprised of three divisions: limited-service lodging, movie theatres and hotels/resorts. The company currently operates or franchises 188 Baymont Inns & Suites in 31 states, and a total of seven Woodfield Suites in Illinois, Wisconsin, Colorado, Ohio and Texas; 473 movie screens in Wisconsin, Ohio, Illinois and Minnesota, and one family entertainment center in Wisconsin; five hotels and a resort in Wisconsin, one hotel and a resort in California, one hotel in Minnesota and one hotel in Missouri. For more information, visit the company's Web site at www.marcuscorp.com.

Certain matters discussed in this press release are "forward-looking statements" intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements may generally be identified as such because the context of such statements will include words such as the Company "believes," "anticipates," "expects" or words of similar import. Similarly, statements that describe the Company's future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties, including, but not limited to, the following: (i) the Company's ability to successfully define and build the Baymont brand within the "limited-service, mid-price without food and beverage" segment of the lodging industry; (ii) the availability, in terms of both quantity and audience appeal, of motion pictures for the Company's theatre division; (iii) the effects of increasing depreciation expenses and pre-opening and start-up costs due to the capital intensive nature of the Company's businesses; (iv) the effects of adverse economic conditions in the Company's markets, particularly with respect to the Company's limited-service lodging and hotels and resorts divisions; (v) the effects of adverse weather conditions, particularly during the winter in the Midwest and in the Company's other markets; (vi) the effects on the Company's occupancy and room rates from the relative industry supply of available rooms at comparable lodging facilities in the Company's markets; (vii) the effects of competitive conditions in the markets served by the Company; and (viii) the effects of increased energy costs. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are made only as of the date of this report and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.