Earnings Call Webcast to Discuss First Quarter Financial Results
Scheduled to Post to Corporate Website on
First Quarter 2024 Summary Results
During the First Quarter 2024, the disrupted movie release schedule caused by the 2023 Hollywood Strikes continued to negatively impact our financial results. Despite these revenue setbacks, our global operations teams managed our cinema expenses to reduce our overall First Quarter 2024 operating loss. As our cinema business endured these temporary challenges, to support our overall global operations over the last six months we monetized two real estate assets – our Maitland property in NSW (
- Total Revenues decreased slightly by 2% (or
$0.8 million ) to$45.1 million compared to$45.8 million in Q1 2023. - Operating Loss improved by 4% (or
$0.3 million ) to a loss of$7.5 million compared to a Q1 2023 operating loss of$7.9 million . - Adjusted EBITDA loss of
$4 million increased by 40% from a negative$2.8 million in Q1 2023. - Basic loss per share weakened by 18% (or
$0.09 ) to a loss of$0.59 compared to a loss of$0.50 for Q1 2023. - Net loss attributable to Reading increased by 19% to a loss of
$13.2 million compared to a loss of$11.1 million , primarily driven by increased interest expense and a loss on the sale of ourCulver City office building which closed inFebruary 2024 .
The Australian dollar average exchange rates weakened against the
President and Chief Executive Officer,
“Our real estate operations continue to deliver solid results. Our First Quarter 2024
Cinema Business
- At
$41.3 million , our Q1 2024 global cinema revenue slightly decreased by 2% compared to Q1 2023. At$4.2 million , our Q1 2024 cinema operating loss decreased by$0.4 million , or 10%, compared to an operating loss of$4.6 million during Q1 2023. - Despite a 5.1% downturn in the North American Box Office, our
U.S. Cinema business exceeded industry performance by 670 basis points and augmented our U.S. market share by 5 basis points, despite closing three theaters. This result is attributed to the exceptional performance of our arthouses headlined by films such as Zone of Interest, American Fiction, All of Us Strangers, Problemista and Perfect Days. Notably, the Angelika inNew York distinguished itself as North America’s top-performing theater for Zone of Interest, All of Us Strangers, Problemista and Perfect Days. - Our revenues were further enhanced by the opening of two new state-of-the-art theaters in
Australia , each featuring recliners and elevated F&B: (i) an eight-screen Angelika boutique cinema atSouth City Square , Brisbane QLD and (ii) a five-screen Reading Cinemas with TITAN LUXE in Busselton,Western Australia . - Over the last twelve months to improve the long-term profitability of our
U.S. Cinema circuit, we closed (i) twoConsolidated Theatres inHawaii in the third quarter of 2023 and (ii) a 16 screen Reading Cinema inCalifornia in the fourth quarter of 2023. - We have one additional Reading Cinema in the pipeline in
Australia located in Noosa (Queensland ).
Real Estate Business
- Real estate segment revenue for Q1 2024 decreased by
$0.1 million (or 3%) to$4.9 million , compared to$5.1 million in Q1 2023. Real estate segment operating income for Q1 2024 decreased by$0.1 million (or 12%) to$0.9 million compared to a real estate segment operating income of$1.0 million in Q1 2023. - The changes between the first quarter of 2024 and the first quarter of 2023 were partially attributable to the monetizations of our
Culver City office building and our Maitland property (NSW).
Balance Sheet and Liquidity
- As of
March 31, 2024 , our cash and cash equivalents were$7.5 million . - As of
March 31, 2024 , we had total gross debt of$195.7 million , which represents a$14.6 million reduction in debt sinceDecember 31, 2023 , when our gross debt was$210.3 million . - As of
March 31, 2024 , our assets had a total book value of$494.9 million as compared to a book value of$533.1 million as ofDecember 31, 2023 .
- To continue supporting our overall liquidity, during the first quarter we monetized our office building at
5995 Sepulveda Blvd. Culver City, California for$10.0 million . Also, in the fourth quarter of 2023, we monetized our underperforming Maitland Australia (NSW) property for AU$2.8 million and leased back the 4-screen Reading Cinema on a short-term basis, both of which positively impacted cash but contributed to this quarter’s weakening in Real Estate Revenues. Despite generating a loss of$1.1 million from the sale, our decision to monetize ourCulver City office building was influenced by the fact that, given the availability on favorable terms of office space elsewhere inLos Angeles and our reduced space needs inCalifornia , we believe that a relocation of this office space could save us approximately$1.5million in expense between now and the end of 2025. - Through Q1 2024, we worked closely with our other lenders to amend our existing debt facilities and extend upcoming maturity dates.
- On
January 26, 2024 , we extended the maturity date of the loan secured by our Off-Broadway theatres in NYC toJune 1, 2024 . - On
February 23, 2024 , we repaid the$8.35 million loan on ourCulver City office building following the sale of the asset. - On
March 27, 2024 , we amended theBank of America/Bank of Hawaii loan by extending the maturity toAugust 18, 2025 and reducing certain principal repayment amounts. - On
April 4, 2024 , with respect to our loan from National Australia Bank, we extended the maturity date toJuly 31, 2026 , and negotiated a Bridge Facility ofA$20 million dueMarch 31, 2025 (to be prepaid upon the sale of certain assets). - Most recently, on
April 23, 2024 , we closed the 1-year extension option on our44 Union Square loan to extend the maturity date toMay 6, 2025 . We have one remaining one year option.
- On
Conference Call and Webcast
We plan to post our pre-recorded conference call and audio webcast on our corporate website on
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
About
Reading’s cinema subsidiaries operate under multiple cinema brands: Reading Cinemas,
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; 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.
Unaudited Consolidated Statements of Operations
(Unaudited;
Three Months Ended | ||||||||
2024 | 2023 | |||||||
Revenue | ||||||||
Cinema | $ | 41,271 | $ | 41,987 | ||||
Real estate | 3,781 | 3,820 | ||||||
Total revenue | 45,052 | 45,807 | ||||||
Costs and expenses | ||||||||
Cinema | (40,720 | ) | (41,654 | ) | ||||
Real estate | (2,235 | ) | (2,215 | ) | ||||
Depreciation and amortization | (4,205 | ) | (4,639 | ) | ||||
General and administrative | (5,423 | ) | (5,179 | ) | ||||
Total costs and expenses | (52,583 | ) | (53,687 | ) | ||||
Operating income (loss) | (7,531 | ) | (7,880 | ) | ||||
Interest expense, net | (5,286 | ) | (4,117 | ) | ||||
Gain (loss) on sale of assets | (1,125 | ) | — | |||||
Other income (expense) | 341 | 174 | ||||||
Income (loss) before income tax expense and equity earnings of unconsolidated joint ventures | (13,601 | ) | (11,823 | ) | ||||
Equity earnings of unconsolidated joint ventures | (25 | ) | 19 | |||||
Income (loss) before income taxes | (13,626 | ) | (11,804 | ) | ||||
Income tax benefit (expense) | 223 | 480 | ||||||
Net income (loss) | $ | (13,403 | ) | $ | (11,324 | ) | ||
Less: net income (loss) attributable to noncontrolling interests | (175 | ) | (213 | ) | ||||
Net income (loss) attributable to | $ | (13,228 | ) | $ | (11,111 | ) | ||
Basic earnings (loss) per share | $ | (0.59 | ) | $ | (0.50 | ) | ||
Diluted earnings (loss) per share | $ | (0.59 | ) | $ | (0.50 | ) | ||
Weighted average number of shares outstanding–basic | 22,348,994 | 22,114,927 | ||||||
Weighted average number of shares outstanding–diluted | 22,348,994 | 22,114,927 | ||||||
Consolidated Balance Sheets
(
2024 | 2023 | |||||||
ASSETS | (unaudited) | |||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 7,501 | $ | 12,906 | ||||
Restricted cash | 831 | 2,535 | ||||||
Receivables | 7,104 | 7,561 | ||||||
Inventories | 1,318 | 1,648 | ||||||
Prepaid and other current assets | 3,069 | 2,881 | ||||||
Land and property held for sale | 460 | 11,179 | ||||||
Total current assets | 20,283 | 38,710 | ||||||
Operating property, net | 253,809 | 262,417 | ||||||
Operating lease right-of-use assets | 172,201 | 181,542 | ||||||
Investment and development property, net | 8,353 | 8,789 | ||||||
Investment in unconsolidated joint ventures | 4,539 | 4,756 | ||||||
24,671 | 25,535 | |||||||
Intangible assets, net | 1,944 | 2,038 | ||||||
Deferred tax asset, net | 112 | 299 | ||||||
Other assets | 8,948 | 8,965 | ||||||
Total assets | $ | 494,860 | $ | 533,051 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts payable and accrued liabilities | $ | 47,826 | $ | 43,828 | ||||
Film rent payable | 5,481 | 6,038 | ||||||
Debt - current portion | 41,464 | 34,484 | ||||||
Subordinated debt - current portion | 393 | 586 | ||||||
Taxes payable - current | 1,025 | 1,376 | ||||||
Deferred revenue | 9,893 | 10,993 | ||||||
Operating lease liabilities - current portion | 22,198 | 23,047 | ||||||
Other current liabilities | 6,569 | 6,731 | ||||||
Total current liabilities | 134,849 | 127,083 | ||||||
Debt - long-term portion | 125,459 | 146,605 | ||||||
Subordinated debt, net | 27,228 | 27,172 | ||||||
Noncurrent tax liabilities | 6,234 | 6,586 | ||||||
Operating lease liabilities - non-current portion | 171,793 | 180,898 | ||||||
Other liabilities | 11,569 | 11,711 | ||||||
Total liabilities | $ | 477,132 | $ | 500,055 | ||||
Commitments and contingencies (Note 15) | ||||||||
Stockholders’ equity: | ||||||||
Class A non-voting common shares, par value | ||||||||
33,611,296 issued and 20,675,185 outstanding at | ||||||||
33,602,627 issued and 20,666,516 outstanding at | 237 | 237 | ||||||
Class B voting common shares, par value | ||||||||
1,680,590 issued and outstanding at | 17 | 17 | ||||||
Nonvoting preferred shares, par value | ||||||||
or outstanding shares at | — | — | ||||||
Additional paid-in capital | 156,078 | 155,402 | ||||||
Retained earnings/(deficits) | (92,717 | ) | (79,489 | ) | ||||
(40,407 | ) | (40,407 | ) | |||||
Accumulated other comprehensive income | (5,211 | ) | (2,673 | ) | ||||
17,997 | 33,087 | |||||||
Noncontrolling interests | (269 | ) | (91 | ) | ||||
Total stockholders’ equity | 17,728 | 32,996 | ||||||
Total liabilities and stockholders’ equity | $ | 494,860 | $ | 533,051 | ||||
Segment Results
(Unaudited;
Three Months Ended | ||||||||||||
% Change Favorable/ | ||||||||||||
(Dollars in thousands) | 2024 | 2023 | (Unfavorable) | |||||||||
Segment revenue | ||||||||||||
Cinema | ||||||||||||
$ | 21,308 | $ | 21,811 | (2 | ) | % | ||||||
17,322 | 17,212 | 1 | % | |||||||||
2,641 | 2,964 | (11 | ) | % | ||||||||
Total | $ | 41,271 | $ | 41,987 | (2 | ) | % | |||||
Real estate | ||||||||||||
$ | 1,485 | $ | 1,554 | (4 | ) | % | ||||||
3,083 | 3,137 | (2 | ) | % | ||||||||
365 | 374 | (2 | ) | % | ||||||||
Total | $ | 4,933 | $ | 5,065 | (3 | ) | % | |||||
Inter-segment elimination | (1,152 | ) | (1,245 | ) | 7 | % | ||||||
Total segment revenue | $ | 45,052 | $ | 45,807 | (2 | ) | % | |||||
Segment operating income (loss) | ||||||||||||
Cinema | ||||||||||||
$ | (3,436 | ) | $ | (4,326 | ) | 21 | % | |||||
(498 | ) | (125 | ) | (>100 | ) | % | ||||||
(231 | ) | (161 | ) | (43 | ) | % | ||||||
Total | $ | (4,165 | ) | $ | (4,612 | ) | 10 | % | ||||
Real estate | ||||||||||||
$ | (367 | ) | $ | (217 | ) | (69 | ) | % | ||||
1,458 | 1,413 | 3 | % | |||||||||
(201 | ) | (190 | ) | (6 | ) | % | ||||||
Total | $ | 890 | $ | 1,006 | (12 | ) | % | |||||
Total segment operating income (loss)(1) | $ | (3,275 | ) | $ | (3,606 | ) | 9 | % | ||||
(1) Total segment operating income is a non-GAAP financial measure. See the discussion of non-GAAP financial measures that follows.
Reconciliation of EBITDA and Adjusted EBITDA to Net Income (Loss)
(Unaudited;
Three Months Ended | ||||||||
(Dollars in thousands) | 2024 | 2023 | ||||||
Net Income (loss) attributable to | $ | (13,228 | ) | $ | (11,111 | ) | ||
Add: Interest expense, net | 5,286 | 4,117 | ||||||
Add: Income tax expense (benefit) | (223 | ) | (480 | ) | ||||
Add: Depreciation and amortization | 4,205 | 4,639 | ||||||
Adjustment for infrequent events and discontinued operations | — | — | ||||||
EBITDA | $ | (3,960 | ) | $ | (2,835 | ) | ||
Adjustments for: | ||||||||
None | — | — | ||||||
Adjusted EBITDA | $ | (3,960 | ) | $ | (2,835 | ) | ||
Reconciliation of Total Segment Operating Income (Loss) to Income (Loss) before Income Taxes
(Unaudited;
Three Months Ended | ||||||||
(Dollars in thousands) | 2024 | 2023 | ||||||
Segment operating income (loss) | $ | (3,275 | ) | $ | (3,606 | ) | ||
Unallocated corporate expense | ||||||||
Depreciation and amortization expense | (102 | ) | (179 | ) | ||||
General and administrative expense | (4,154 | ) | (4,095 | ) | ||||
Interest expense, net | (5,286 | ) | (4,117 | ) | ||||
Equity earnings of unconsolidated joint ventures | (25 | ) | 19 | |||||
Gain (loss) on sale of assets | (1,125 | ) | — | |||||
Other income (expense) | 341 | 174 | ||||||
Income (loss) before income tax expense | $ | (13,626 | ) | $ | (11,804 | ) | ||
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
These measures should be reviewed in conjunction with the relevant
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
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
For more information, contact:Gilbert Avanes – EVP, CFO, and TreasurerAndrzej Matyczynski – EVP Global Operations (213) 235-2240
Source:
2024 GlobeNewswire, Inc., source