Reading International Reports Second Quarter 2024 Results
Reading International (NASDAQ: RDI) reported its Q2 2024 results, showing declines due to lingering effects of the 2023 Hollywood Strikes. Total revenues fell to $46.8 million from $65.1 million in Q2 2023. The company reported an operating loss of $4.4 million compared to operating income of $1.8 million in Q2 2023. Global cinema revenue decreased 30% to $42.9 million. Real estate revenue declined slightly by 4% to $5.0 million.
Despite challenges, Reading saw some positive trends, including record F&B sales per person in Australia and the U.S. The company is taking steps to improve liquidity, including selling assets and marketing properties. Management expressed optimism about the movie slate for late 2024 and 2025, citing potential blockbusters like Beetlejuice Beetlejuice, Avatar 3, and Superman.
Reading International (NASDAQ: RDI) ha riportato i risultati del secondo trimestre del 2024, mostrando un calo a causa degli effetti persistenti degli scioperi di Hollywood del 2023. I ricavi totali sono scesi a 46,8 milioni di dollari rispetto ai 65,1 milioni di dollari del secondo trimestre del 2023. L'azienda ha registrato una perdita operativa di 4,4 milioni di dollari rispetto a un profitto operativo di 1,8 milioni di dollari nel secondo trimestre del 2023. I ricavi globali del cinema sono diminuiti del 30% a 42,9 milioni di dollari. I ricavi immobiliari sono leggermente calati del 4% a 5,0 milioni di dollari.
Nonostante le sfide, Reading ha osservato alcune tendenze positive, inclusi record di vendite F&B per persona in Australia e negli Stati Uniti. L'azienda sta compiendo passi per migliorare la liquidità, tra cui la vendita di beni e la commercializzazione di proprietà. La direzione ha espresso ottimismo riguardo al programma cinematografico per la fine del 2024 e il 2025, citando potenziali blockbuster come Beetlejuice Beetlejuice, Avatar 3 e Superman.
Reading International (NASDAQ: RDI) reportó sus resultados del segundo trimestre de 2024, mostrando disminuciones debido a los efectos persistentes de las huelgas de Hollywood de 2023. Los ingresos totales cayeron a 46,8 millones de dólares desde 65,1 millones de dólares en el segundo trimestre de 2023. La compañía reportó una pérdida operativa de 4,4 millones de dólares en comparación con un ingreso operativo de 1,8 millones de dólares en el segundo trimestre de 2023. Los ingresos cinematográficos globales disminuyeron un 30% a 42,9 millones de dólares. Los ingresos del sector inmobiliario cayeron ligeramente un 4% a 5,0 millones de dólares.
A pesar de los desafíos, Reading vio algunas tendencias positivas, incluyendo ventas récord de F&B por persona en Australia y EE. UU. La empresa está tomando medidas para mejorar la liquidez, incluyendo la venta de activos y la comercialización de propiedades. La gerencia expresó optimismo sobre la cartelera de películas para finales de 2024 y 2025, citando posibles éxitos de taquilla como Beetlejuice Beetlejuice, Avatar 3 y Superman.
리딩 인터내셔널(나스닥: RDI)은 2024년 2분기 실적을 발표했으며, 2023년 할리우드 파업의 여파로 인해 감소세를 보였습니다. 2분기 총 수익은 6,510만 달러에서 4,680만 달러로 감소했습니다. 회사는 2분기 운영 소득이 180만 달러였던 것에 비해 440만 달러의 운영 손실을 기록했습니다. 전 세계 영화 수익은 30% 감소하여 4,290만 달러를 기록했습니다. 부동산 수익은 소폭 4% 감소하여 500만 달러를 기록했습니다.
어려움에도 불구하고 리딩은 호주와 미국에서 1인당 F&B 매출 기록 등 긍정적인 경향을 보았습니다. 회사는 자산 매각 및 부동산 마케팅을 포함하여 유동성을 개선하기 위한 조치를 취하고 있습니다. 경영진은 2024년 말과 2025년의 영화 라인업에 대한 긍정적인 전망을 제시하며 비틀주스 비틀주스, 아바타 3, 슈퍼맨과 같은 잠재적인 블록버스터를 언급했습니다.
Reading International (NASDAQ: RDI) a annoncé ses résultats du deuxième trimestre 2024, montrant des baisses dues aux effets persistants des grèves d'Hollywood de 2023. Les revenus totaux ont chuté à 46,8 millions de dollars contre 65,1 millions de dollars au deuxième trimestre 2023. L'entreprise a déclaré une perte d'exploitation de 4,4 millions de dollars par rapport à un bénéfice d'exploitation de 1,8 million de dollars au deuxième trimestre 2023. Les revenus mondiaux du cinéma ont diminué de 30 % pour atteindre 42,9 millions de dollars. Les revenus immobiliers ont légèrement baissé de 4 % pour atteindre 5,0 millions de dollars.
Malgré ces défis, Reading a observé certaines tendances positives, notamment des ventes record de F&B par personne en Australie et aux États-Unis. L'entreprise prend des mesures pour améliorer sa liquidité, notamment par la vente d'actifs et la commercialisation de propriétés. La direction a exprimé son optimisme concernant le programme cinématographique de fin 2024 et 2025, citant des blockbusters potentiels comme Beetlejuice Beetlejuice, Avatar 3 et Superman.
Reading International (NASDAQ: RDI) hat seine Ergebnisse für das zweite Quartal 2024 veröffentlicht, die Rückgänge aufgrund der anhaltenden Auswirkungen der Hollywood-Streiks 2023 zeigen. Die Gesamterlöse sanken im Vergleich zu 65,1 Millionen Dollar im zweiten Quartal 2023 auf 46,8 Millionen Dollar. Das Unternehmen meldete einen Betriebsverlust von 4,4 Millionen Dollar im Vergleich zu einem Betriebsgewinn von 1,8 Millionen Dollar im zweiten Quartal 2023. Die Globalen Kinosphäreinnahmen gingen um 30 % auf 42,9 Millionen Dollar zurück. Die Erlöse aus Immobilien gingen leicht um 4 % auf 5,0 Millionen Dollar zurück.
Trotz der Herausforderungen verzeichnete Reading einige positive Trends, einschließlich Rekordumsätzen für F&B pro Person in Australien und den USA. Das Unternehmen unternimmt Schritte zur Verbesserung der Liquidität, einschließlich des Verkaufs von Vermögenswerten und der Vermarktung von Immobilien. Das Management äußerte Optimismus über die Filmveröffentlichungen für Ende 2024 und 2025 und nannte potenzielle Blockbuster wie Beetlejuice Beetlejuice, Avatar 3 und Superman.
- Record food and beverage sales per person in Australian and U.S. cinema divisions
- Authorized negotiation for new Reading Cinema lease in Noosa, Australia
- U.S. real estate business posted second-highest Q2 revenue in company history
- Australian real estate division achieved highest Q2 revenues since 2019 and highest Q2 operating income since 2018
- Extended license agreement for Minetta Lane Theatre
- Successful debt facility amendments and maturity extensions
- Total revenues decreased 28.1% to $46.8 million in Q2 2024 compared to Q2 2023
- Operating loss of $4.4 million compared to operating income of $1.8 million in Q2 2023
- Global cinema revenue decreased 30% to $42.9 million
- Global real estate revenue decreased 4% to $5.0 million
- Net loss attributable to Reading increased to $9.3 million from $2.8 million in Q2 2023
- Adjusted EBITDA loss of $0.2 million compared to positive Adjusted EBITDA of $6.7 million in Q2 2023
Insights
Reading International's Q2 2024 results show significant challenges, primarily due to the lingering effects of the 2023 Hollywood strikes. Total revenues decreased by
Despite these challenges, there are some positive indicators. The company's U.S. cinema division showed resilience, with Q2 2024 performance stronger than most quarters since Q4 2019. Additionally, food and beverage sales per person reached record levels in some markets. However, investors should note the increased interest expense due to rising rates and the company's efforts to improve liquidity through asset sales.
The cinema industry's recovery trajectory is evident in Reading's results. While Q2 was challenging, June 2024 showed significant improvement with blockbusters like Inside Out 2 driving performance. This trend continued into July with Deadpool & Wolverine's success. The upcoming slate for late 2024 and 2025, including Avatar 3 and Mission: Impossible 8, suggests potential for stronger future performance.
However, challenges remain. The weakening of Australian and New Zealand currencies against the USD impacted results. Additionally, the company's real estate segment saw slight declines, though the Australian portfolio maintains a strong 95% occupancy rate. Reading's strategic moves, including cinema closures and potential new openings, indicate efforts to optimize operations amidst changing market dynamics.
Reading International's financial maneuvering to address debt maturities and interest expenses warrants attention. The company has successfully extended loan maturities with National Australia Bank and for the 44 Union Square property. They've also entered into an Interest Rate Collar agreement, demonstrating proactive financial management.
However, the ongoing negotiations for a loan extension with Santander Bank, which matured on June 1, 2024, introduce an element of uncertainty. Investors should monitor this situation closely. Additionally, the increased legal expenses related to Pennsylvania assets suggest potential legal challenges that could impact future financial performance. The company's strategy of asset monetization, while potentially improving liquidity, may have long-term implications for revenue streams and should be evaluated carefully.
Earnings Call Webcast to Discuss Second Quarter Financial Results
Scheduled to Post to Corporate Website on Friday, August 16, 2024
NEW YORK, Aug. 14, 2024 (GLOBE NEWSWIRE) -- Reading International, Inc. (NASDAQ: RDI) (“Reading” or our “Company”), an internationally diversified cinema and real estate company with operations and assets in the United States, Australia, and New Zealand, today announced its results for the Second Quarter ended June 30, 2024.
Second Quarter 2024 Summary Results
The anticipated lingering effects of the 2023 Hollywood Strikes negatively impacted our second quarter 2024 global box office as the movie line-up featured not only fewer blockbuster films due to changes in studio release dates, but also a number of underperforming films. The expected hit to the box office, which was most pronounced in April and May 2024, permeated our key financial results leading to an overall weaker quarter compared to Q2 2023. The 2023 Hollywood Strike impacts began to dissipate in June 2024 with the release of the record setting Inside Out 2, which has now become the highest grossing animated film of all time, and the overperforming Bad Boys: Ride or Die. Reflecting the June 2024 momentum, compared to the first quarter 2024, during the second quarter 2024 each of the Company’s cinema divisions reported (i) increases in total segment revenue and (ii) improvements in the total operating loss.
During Q2 2024 and for the first half of 2024, our global real estate division reported a slight decrease in revenues and a decrease in operating income compared to the same periods in 2023 due to lower results from our U.S. and NZ Real Estate divisions, which were balanced by stronger results from our Australian real estate division.
Key Financial Results – Second Quarter 2024
- Total Revenues were
$46.8 million compared to$65.1 million in Q2 2023. - Operating Loss was
$4.4 million compared to Operating Income of$1.8 million in Q2 2023. - Adjusted EBITDA loss was
$0.2 million compared to Adjusted EBITDA of$6.7 million in Q2 2023. - Basic loss per share was
$0.42 compared to a loss of$0.12 in Q2 2023. - Net loss attributable to Reading was
$9.3 million compared to a loss of$2.8 million in Q2 2023.
Key Financial Results – Six Months of 2024
- Total Revenues were
$91.9 million compared to$110.9 million for the first six months of 2023. - Operating Loss was
$11.9 million compared to a loss of$6.1 million for the same period in 2023. - Adjusted EBITDA loss was
$4.2 million compared to Adjusted EBITDA of$3.8 million for the same period in 2023. - Basic loss per share was
$1.01 compared to a loss of$0.63 for the first six months of 2023. - Net loss attributable to Reading was
$22.6 million compared to a loss of$13.9 million for the same period in 2023.
During the second quarter 2024, our revenues were impacted by foreign exchange in that both the Australian and New Zealand dollar average exchange rates weakened against the U.S. dollar by
President and Chief Executive Officer, Ellen Cotter said, “While the 2023 Hollywood Strikes have had an appreciable financial impact on each of our cinema divisions to date in 2024, we look to recent results for confidence in our ability to withstand this latest disruption. Inside Out 2, which opened in our U.S. and Australian cinemas on June 14/13, 2024, has been a resounding success. Then, Deadpool & Wolverine, which recently ranked the second
Ms. Cotter added, “As our global cinema business continues its recovery over the balance of 2024 and beyond, we are proactively taking steps to improve our liquidity to address upcoming debt maturities and our interest expense which has spiked due to the fastest rate hike cycle in history (up 525 basis points since March 2022). Over the past six months, we sold our Culver City office building for
“We believe that, with the expected closing of these asset monetizations, together with improving box office trends that are reinforcing the power of the theatrical release window, our Company and our stockholders are well positioned for a better 2025 and beyond.”
Key Points
Cinema Business
- The disruption caused by the 2023 Hollywood Strikes and the weaker performance of the Australian and New Zealand dollars drove our Q2 2024 financial results to decrease compared to the same period in 2023: (i) global cinema revenue decreased
30% to$42.9 million and (ii) global operating income dropped to a loss of$1.3 million from operating income of$4.5 million . Our global cinema financial results for the six months ended June 30, 2024, were likewise impacted compared to the first six months of 2023: (i) global cinema revenue decreased by18% to$84.2 million and (ii) global cinema segment operating loss increased to$5.4 million from a loss of$0.1 million . - Despite the serious headwinds imposed by the 2023 Hollywood Strikes and the pandemic, (i) the Q2 2024 operating loss of
$1.1 million of our U.S. Cinema division represented a financially stronger result than all but three calendar quarters since Q4 2019 (despite a13% reduction in screen count due to the closure of underperforming cinemas), (ii) the Q2 2024 operating loss of$87 K of our Australian Cinema division represented a financially stronger result than all but eight calendar quarters since Q4 2019 and (iii) the Q2 2024 operating loss of$95 K of our New Zealand Cinema division represented a financially stronger result than all but seven calendar quarters since Q4 2019. While we are disappointed with our industry’s macro-operating conditions, the improvements in various operational strategies across each of our cinema divisions should position them to benefit from the much-improved movie slate expected over the next few years. - From an operational perspective, with respect to our food and beverage (“F&B”) efforts: (i) the Q2 2024 sales per person (“SPP”) of our Australian cinema division ranked the highest second quarter ever and (ii) despite Q2 2024 roll out of additional F&B discounts to drive revenues, the Q2 2024 F&B SPP of our U.S. cinema division ranked the highest second quarter ever for periods when our U.S. circuit was fully operating (i.e. excluding pandemic closure periods).
- To further improve the overall profitability of our U.S. Cinema division, we closed an underperforming cinema in Texas whose lease expired in Q2 2024. This closure follows the closure of two theatres in Hawaii in Q3 2023 and one in Northern California in the Q4 2023.
- Demonstrating our long-term belief in the cinema industry, our Board authorized management to proceed with the negotiation of a lease for a new Reading Cinema in Noosa (Queensland) in Australia.
Real Estate Business
- With respect to our global real estate business, our Q2 2024 financial results compared to the same period in 2023 experienced declines: (i) our global real estate revenue decreased slightly by
4% to$5.0 million and (ii) global operating income dropped26% to$0.9 million . Our global real estate business financial results for the six months ended June 30, 2024, compared to the first six months of 2023 followed a similar trajectory: (i) our global real estate revenue decreased by3% to$9.9 million and (ii) operating income of$1.8 million decreased by20% . - Our U.S. real estate business (which includes Live Theatres) posted its second-highest second-quarter revenue in our Company’s history.
- The 2024 declines in performance compared to 2023 were primarily attributable to (i) the monetization of our Culver City office building and our Maitland property (NSW), in the first quarter of 2024 and the fourth quarter of 2023, respectively, and the related elimination of rental revenue associated with those assets, (ii) an increase in our legal expenses related to our Pennsylvania assets, and (iii) our Orpheum Theatre in New York City being “dark” for the months of May and June 2024.
- Reflective of a
95% occupancy rate for our 74 third party tenant Australian portfolio, in Q2 2024 our Australian real estate division delivered (i) the highest second quarter revenues since the second quarter ended June 30, 2019 and (ii) the highest second quarter operating income since the second quarter ended June 30, 2018. These achievements come despite the June 2021 sale of our Auburn/RedYard (NSW) property, which had 17 third party tenants. - In April 2024, we extended our license agreement with an affiliate of Audible for the Minetta Lane Theatre by two years.
- In September 2024 and for an open-ended run, the Orpheum Theatre debuts The Big Gay Jamboree, co-produced by the producers of Barbie and the creator of Titanique.
Balance Sheet and Liquidity
As of June 30, 2024,
- Our cash and cash equivalents were
$9.2 million . - Our total gross debt was
$210.4 million representing a slight$0.1 million increase since December 31, 2023. - Our assets had a total book value of
$494.9 million , compared to a book value of$533.1 million as of December 31, 2023.
Through Q2 2024, we worked closely with certain lenders to amend our existing debt facilities and extend upcoming maturity dates.
- On April 4, 2024, we extended our loan with National Australia Bank (NAB) to July 31, 2026, and negotiated a Bridge Facility of A
$20 million due March 31, 2025 (to be prepaid upon the sale of certain assets). - On April 23, 2024, we closed a 1-year extension on our 44 Union Square loan extending the maturity date to May 6, 2025. We have one remaining 1-year extension option.
- On June 28, 2024, we entered into an Interest Rate Collar hedging agreement with NAB for A
$50 million where the cap rate is4.78% and floor rate is4.18% . The termination date of the agreement is July 31, 2026. - On August 13, 2024, we executed a Variation of our Westpac loan in New Zealand which, among other things, increased our credit line by NZ
$5.0 million . - We are currently working on a one-year extension of our loan from Santander Bank, which matured June 1, 2024.
Conference Call and Webcast
We plan to post our pre-recorded conference call and audio webcast on our corporate website on Friday, August 16, 2024, which will feature prepared remarks from Ellen Cotter, President and Chief Executive Officer; Gilbert Avanes, Executive Vice President, Chief Financial Officer and Treasurer; and Andrzej Matyczynski, Executive Vice President - Global Operations.
A pre-recorded question and answer session will follow our formal remarks. Questions and topics for consideration should be submitted to InvestorRelations@readingrdi.com on August 15, 2024 by 5:00 p.m. Eastern Time. The audio webcast can be accessed by visiting https://investor.readingrdi.com/financial-information/quarterly-results.
About Reading International, Inc.
Reading International, Inc. (NASDAQ: RDI), an internationally diversified cinema and real estate company operating through various domestic and international subsidiaries, is a leading entertainment and real estate company, engaging in the development, ownership, and operation of cinemas and retail and commercial real estate in the United States, Australia, and New Zealand.
Reading’s cinema subsidiaries operate under multiple cinema brands: Reading Cinemas, Consolidated Theatres and the Angelika brand. Its live theatres are owned and operated by its Liberty Theaters subsidiary, under the Orpheum and Minetta Lane names. Its signature property developments, including Newmarket Village in Brisbane, Australia, and 44 Union Square in New York City, are maintained in special purpose entities.
Additional information about Reading can be obtained from our Company’s website: http://www.readingrdi.com.
Cautionary Note Regarding Forward-Looking Statements
This earnings release contains a variety of forward-looking statements as defined by the Securities Litigation Reform Act of 1995, including those related to our expected operated results; our belief regarding our business structure and diversification strategy; our belief regarding the quality, the quantity and the appeal of upcoming movie releases in the remainder of 2024 and 2025 and our revenue expectations relating to such movie releases; our expectations regarding our monetization of our fee interests under our cinemas and our other real estate assets; our beliefs regarding the upcoming movie slates, the refocus of film distributors and its impact on our business; and our expectations of our liquidity and capital requirements and the allocation of funds. You can recognize these statements by our use of words, such as “may,” “will,” “expect,” “believe,” and “anticipate” or other similar terminology.
Given the variety and unpredictability of the factors that will ultimately influence our businesses and our results of operation, no guarantees can be given that any of our forward-looking statements will ultimately prove to be correct. Actual results will undoubtedly vary and there is no guarantee as to how our securities will perform either when considered in isolation or when compared to other securities or investment opportunities.
Forward-looking statements made by us in this earnings release are based only on information currently available to us and speak only as of the date on which they are made. We undertake no obligation to publicly update or to revise any of our forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable law. Accordingly, you should always note the date to which our forward-looking statements speak.
Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, those factors discussed throughout Part I, Item 1A – Risk Factors – and Part II Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – of our Annual Report on Form 10-K for the most recently ended fiscal year, as well as the risk factors set forth in any other filings made under the Securities Act of 1934, as amended, including any of our Quarterly Reports on Form 10-Q, for more information.
Reading International, Inc. and Subsidiaries
Unaudited Consolidated Statements of Operations
(Unaudited; U.S. dollars in thousands, except per share data)
Quarter Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Revenue | ||||||||||||||||
Cinema | $ | 42,942 | $ | 61,056 | $ | 84,213 | $ | 103,042 | ||||||||
Real estate | 3,867 | 3,999 | 7,648 | 7,819 | ||||||||||||
Total revenue | 46,809 | 65,055 | 91,861 | 110,861 | ||||||||||||
Costs and expenses | ||||||||||||||||
Cinema | (39,418 | ) | (51,364 | ) | (80,138 | ) | (93,019 | ) | ||||||||
Real estate | (2,461 | ) | (2,104 | ) | (4,696 | ) | (4,319 | ) | ||||||||
Depreciation and amortization | (4,011 | ) | (4,689 | ) | (8,216 | ) | (9,329 | ) | ||||||||
General and administrative | (5,271 | ) | (5,109 | ) | (10,693 | ) | (10,288 | ) | ||||||||
Total costs and expenses | (51,161 | ) | (63,266 | ) | (103,743 | ) | (116,955 | ) | ||||||||
Operating income (loss) | (4,352 | ) | 1,789 | (11,882 | ) | (6,094 | ) | |||||||||
Interest expense, net | (5,252 | ) | (4,874 | ) | (10,537 | ) | (8,991 | ) | ||||||||
Gain (loss) on sale of assets | 9 | — | (1,116 | ) | — | |||||||||||
Other income (expense) | (216 | ) | (86 | ) | 123 | 91 | ||||||||||
Income (loss) before income tax expense and equity earnings of unconsolidated joint ventures | (9,811 | ) | (3,171 | ) | (23,412 | ) | (14,994 | ) | ||||||||
Equity earnings of unconsolidated joint ventures | 119 | 207 | 94 | 226 | ||||||||||||
Income (loss) before income taxes | (9,692 | ) | (2,964 | ) | (23,318 | ) | (14,768 | ) | ||||||||
Income tax benefit (expense) | 156 | 103 | 379 | 583 | ||||||||||||
Net income (loss) | $ | (9,536 | ) | $ | (2,861 | ) | $ | (22,939 | ) | $ | (14,185 | ) | ||||
Less: net income (loss) attributable to noncontrolling interests | (195 | ) | (83 | ) | (370 | ) | (296 | ) | ||||||||
Net income (loss) attributable to Reading International, Inc. | $ | (9,341 | ) | $ | (2,778 | ) | $ | (22,569 | ) | $ | (13,889 | ) | ||||
Basic earnings (loss) per share | $ | (0.42 | ) | $ | (0.12 | ) | $ | (1.01 | ) | $ | (0.63 | ) | ||||
Diluted earnings (loss) per share | $ | (0.42 | ) | $ | (0.12 | ) | $ | (1.01 | ) | $ | (0.63 | ) | ||||
Weighted average number of shares outstanding–basic | 22,413,617 | 22,262,214 | 22,379,881 | 22,183,618 | ||||||||||||
Weighted average number of shares outstanding–diluted | 23,246,591 | 23,502,506 | 23,294,887 | 23,423,910 | ||||||||||||
Reading International, Inc. and Subsidiaries
Consolidated Balance Sheets
(U.S. dollars in thousands, except share information)
June 30, | December 31, | |||||||
2024 | 2023 | |||||||
ASSETS | (unaudited) | |||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 9,242 | $ | 12,906 | ||||
Restricted cash | 1,485 | 2,535 | ||||||
Receivables | 7,647 | 7,561 | ||||||
Inventories | 1,347 | 1,648 | ||||||
Prepaid and other current assets | 2,485 | 2,881 | ||||||
Land and property held for sale | 36,446 | 11,179 | ||||||
Total current assets | 58,652 | 38,710 | ||||||
Operating property, net | 225,473 | 262,417 | ||||||
Operating lease right-of-use assets | 168,546 | 181,542 | ||||||
Investment and development property, net | — | 8,789 | ||||||
Investment in unconsolidated joint ventures | 4,428 | 4,756 | ||||||
Goodwill | 25,023 | 25,535 | ||||||
Intangible assets, net | 1,899 | 2,038 | ||||||
Deferred tax asset, net | 2,109 | 299 | ||||||
Other assets | 8,725 | 8,965 | ||||||
Total assets | $ | 494,855 | $ | 533,051 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts payable and accrued liabilities | $ | 44,392 | $ | 43,828 | ||||
Film rent payable | 4,911 | 6,038 | ||||||
Debt - current portion | 58,401 | 34,484 | ||||||
Subordinated debt - current portion | 198 | 586 | ||||||
Taxes payable - current | 2,088 | 1,376 | ||||||
Deferred revenue | 10,027 | 10,993 | ||||||
Operating lease liabilities - current portion | 21,797 | 23,047 | ||||||
Other current liabilities | 6,625 | 6,731 | ||||||
Total current liabilities | 148,439 | 127,083 | ||||||
Debt - long-term portion | 123,347 | 146,605 | ||||||
Derivative financial instruments - non-current portion | 98 | — | ||||||
Subordinated debt, net | 27,283 | 27,172 | ||||||
Noncurrent tax liabilities | 6,418 | 6,586 | ||||||
Operating lease liabilities - non-current portion | 168,246 | 180,898 | ||||||
Other liabilities | 11,493 | 11,711 | ||||||
Total liabilities | $ | 485,324 | $ | 500,055 | ||||
Commitments and contingencies (Note 15) | ||||||||
Stockholders’ equity: | ||||||||
Class A non-voting common shares, par value | ||||||||
33,681,705 issued and 20,745,594 outstanding at June 30, 2024 and | ||||||||
33,602,627 issued and 20,666,516 outstanding at December 31, 2023 | 238 | 237 | ||||||
Class B voting common shares, par value | ||||||||
1,680,590 issued and outstanding at June 30, 2024 and December 31, 2023 | 17 | 17 | ||||||
Nonvoting preferred shares, par value | ||||||||
or outstanding shares at June 30, 2024 and December 31, 2023 | — | — | ||||||
Additional paid-in capital | 156,529 | 155,402 | ||||||
Retained earnings/(deficits) | (102,058 | ) | (79,489 | ) | ||||
Treasury shares | (40,407 | ) | (40,407 | ) | ||||
Accumulated other comprehensive income | (4,325 | ) | (2,673 | ) | ||||
Total Reading International, Inc. stockholders’ equity | 9,994 | 33,087 | ||||||
Noncontrolling interests | (463 | ) | (91 | ) | ||||
Total stockholders’ equity | 9,531 | 32,996 | ||||||
Total liabilities and stockholders’ equity | $ | 494,855 | $ | 533,051 | ||||
Reading International, Inc. and Subsidiaries
Segment Results
(Unaudited; U.S. dollars in thousands)
Quarter Ended | Six Months Ended | |||||||||||||||||||
June 30, | % Change Favorable/ | June 30, | % Change Favorable/ | |||||||||||||||||
(Dollars in thousands) | 2024 | 2023 | (Unfavorable) | 2024 | 2023 | (Unfavorable) | ||||||||||||||
Segment revenue | ||||||||||||||||||||
Cinema | ||||||||||||||||||||
United States | $ | 21,480 | $ | 34,017 | (37)% | $ | 42,785 | $ | 55,826 | (23)% | ||||||||||
Australia | 18,543 | 22,940 | (19)% | 35,867 | 40,151 | (11)% | ||||||||||||||
New Zealand | 2,918 | 4,101 | (29)% | 5,561 | 7,065 | (21)% | ||||||||||||||
Total | $ | 42,941 | $ | 61,058 | (30)% | $ | 84,213 | $ | 103,042 | (18)% | ||||||||||
Real estate | ||||||||||||||||||||
United States | $ | 1,483 | $ | 1,834 | (19)% | $ | 2,967 | $ | 3,389 | (12)% | ||||||||||
Australia | 3,177 | 2,991 | 6,261 | 6,128 | ||||||||||||||||
New Zealand | 353 | 392 | (10)% | 718 | 765 | (6)% | ||||||||||||||
Total | $ | 5,013 | $ | 5,217 | (4)% | $ | 9,946 | $ | 10,282 | (3)% | ||||||||||
Inter-segment elimination | (1,146 | ) | (1,218 | ) | (2,298 | ) | (2,463 | ) | ||||||||||||
Total segment revenue | $ | 46,808 | $ | 65,057 | (28)% | $ | 91,861 | $ | 110,861 | (17)% | ||||||||||
Segment operating income (loss) | ||||||||||||||||||||
Cinema | ||||||||||||||||||||
United States | $ | (1,088 | ) | $ | 814 | (>100)% | $ | (4,527 | ) | $ | (3,514 | ) | (29)% | |||||||
Australia | (87 | ) | 2,984 | (>100)% | (582 | ) | 2,858 | (>100)% | ||||||||||||
New Zealand | (95 | ) | 676 | (>100)% | (326 | ) | 515 | (>100)% | ||||||||||||
Total | $ | (1,270 | ) | $ | 4,474 | (>100)% | $ | (5,435 | ) | $ | (141 | ) | (>100)% | |||||||
Real estate | ||||||||||||||||||||
United States | $ | (204 | ) | $ | 233 | (>100)% | $ | (573 | ) | $ | 16 | (>100)% | ||||||||
Australia | 1,461 | 1,225 | 2,921 | 2,639 | ||||||||||||||||
New Zealand | (311 | ) | (172 | ) | (81)% | (511 | ) | (364 | ) | (40)% | ||||||||||
Total | $ | 946 | $ | 1,286 | (26)% | $ | 1,837 | $ | 2,291 | (20)% | ||||||||||
Total segment operating income (loss) (1) | $ | (324 | ) | $ | 5,760 | (>100)% | $ | (3,598 | ) | $ | 2,150 | (>100)% | ||||||||
(1) Total segment operating income is a non-GAAP financial measure. See the discussion of non-GAAP financial measures that follows.
Reading International, Inc. and Subsidiaries
Reconciliation of EBITDA and Adjusted EBITDA to Net Income (Loss)
(Unaudited; U.S. dollars in thousands)
Quarter Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(Dollars in thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
Net Income (loss) attributable to Reading International, Inc. | $ | (9,341 | ) | $ | (2,778 | ) | $ | (22,569 | ) | $ | (13,889 | ) | ||||
Add: Interest expense, net | 5,252 | 4,874 | 10,537 | 8,991 | ||||||||||||
Add: Income tax expense (benefit) | (156 | ) | (103 | ) | (379 | ) | (583 | ) | ||||||||
Add: Depreciation and amortization | 4,011 | 4,689 | 8,216 | 9,329 | ||||||||||||
Adjustment for infrequent events and discontinued operations | — | — | — | — | ||||||||||||
EBITDA | $ | (234 | ) | $ | 6,682 | $ | (4,195 | ) | $ | 3,848 | ||||||
Adjustments for: | ||||||||||||||||
None | — | — | — | — | ||||||||||||
Adjusted EBITDA | $ | (234 | ) | $ | 6,682 | $ | (4,195 | ) | $ | 3,848 | ||||||
Reading International, Inc. and Subsidiaries
Reconciliation of Total Segment Operating Income (Loss) to Income (Loss) before Income Taxes
(Unaudited; U.S. dollars in thousands)
Quarter Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(Dollars in thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
Segment operating income (loss) | $ | (324 | ) | $ | 5,760 | $ | (3,598 | ) | $ | 2,150 | ||||||
Unallocated corporate expense | ||||||||||||||||
Depreciation and amortization expense | (99 | ) | (176 | ) | (201 | ) | (355 | ) | ||||||||
General and administrative expense | (3,929 | ) | (3,794 | ) | (8,083 | ) | (7,889 | ) | ||||||||
Interest expense, net | (5,252 | ) | (4,875 | ) | (10,537 | ) | (8,991 | ) | ||||||||
Equity earnings of unconsolidated joint ventures | 119 | 207 | 94 | 226 | ||||||||||||
Gain (loss) on sale of assets | 9 | — | (1,116 | ) | — | |||||||||||
Other income (expense) | (216 | ) | (86 | ) | 123 | 91 | ||||||||||
Income (loss) before income tax expense | $ | (9,692 | ) | $ | (2,964 | ) | $ | (23,318 | ) | $ | (14,768 | ) | ||||
Non-GAAP Financial Measures
This Earnings Release presents total segment operating income (loss), EBITDA, and Adjusted EBITDA, which are important financial measures for our Company, but are not financial measures defined by U.S. GAAP.
These measures should be reviewed in conjunction with the relevant U.S. GAAP financial measures and are not presented as alternative measures of earnings (loss) per share, cash flows or net income (loss) as determined in accordance with U.S. GAAP. Total segment operating income (loss) and EBITDA, as we have calculated them, may not be comparable to similarly titled measures reported by other companies.
Total segment operating income (loss) – We evaluate the performance of our business segments based on segment operating income (loss), and management uses total segment operating income (loss) as a measure of the performance of operating businesses separate from non-operating factors. We believe that information about total segment operating income (loss) assists investors by allowing them to evaluate changes in the operating results of our Company’s business separate from non-operational factors that affect net income (loss), thus providing separate insight into both operations and the other factors that affect reported results.
EBITDA – We use EBITDA in the evaluation of our Company’s performance since we believe that EBITDA provides a useful measure of financial performance and value. We believe this principally for the following reasons:
We believe that EBITDA is an accepted industry-wide comparative measure of financial performance. It is, in our experience, a measure commonly adopted by analysts and financial commentators who report upon the cinema exhibition and real estate industries, and it is also a measure used by financial institutions in underwriting the creditworthiness of companies in these industries. Accordingly, our management monitors this calculation as a method of judging our performance against our peers, market expectations, and our creditworthiness. It is widely accepted that analysts, financial commentators, and persons active in the cinema exhibition and real estate industries typically value enterprises engaged in these businesses at various multiples of EBITDA. Accordingly, we find EBITDA valuable as an indicator of the underlying value of our businesses. We expect that investors may use EBITDA to judge our ability to generate cash, as a basis of comparison to other companies engaged in the cinema exhibition and real estate businesses and as a basis to value our company against such other companies.
EBITDA is not a measurement of financial performance under generally accepted accounting principles in the United States of America and it should not be considered in isolation or construed as a substitute for net income (loss) or other operations data or cash flow data prepared in accordance with generally accepted accounting principles in the United States for purposes of analyzing our profitability. The exclusion of various components, such as interest, taxes, depreciation, and amortization, limits the usefulness of these measures when assessing our financial performance, as not all funds depicted by EBITDA are available for management’s discretionary use. For example, a substantial portion of such funds may be subject to contractual restrictions and functional requirements to service debt, to fund necessary capital expenditures, and to meet other commitments from time to time.
EBITDA also fails to take into account the cost of interest and taxes. Interest is clearly a real cost that for us is paid periodically as accrued. Taxes may or may not be a current cash item but are nevertheless real costs that, in most situations, must eventually be paid. A company that realizes taxable earnings in high tax jurisdictions may, ultimately, be less valuable than a company that realizes the same amount of taxable earnings in a low tax jurisdiction. EBITDA fails to take into account the cost of depreciation and amortization and the fact that assets will eventually wear out and have to be replaced.
Adjusted EBITDA – using the principles we consistently apply to determine our EBITDA, we further adjusted the EBITDA for certain items we believe to be external to our core business and not reflective of our costs of doing business or results of operation. Specifically, we have adjusted for (i) legal expenses relating to extraordinary litigation, and (ii) any other items that can be considered non-recurring in accordance with the two-year SEC requirement for determining an item is non-recurring, infrequent or unusual in nature.
FAQ
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