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 fourth quarter
and year ended December 31, 2023.
Full Year 2023 Summary compared to
2022
Notwithstanding the Writers and Actors strikes
(the “2023 Hollywood Strikes”) that effectively shut down Hollywood
for months in 2023 and a 525-point spike in interest rates since
March 2022, new movie releases are being well received by movie
patrons and, generally speaking, things are moving in the right
direction for our Company.
- Total Revenues increased by 10% to
$222.7 million from $203.1 million.
- Operating Loss reduced by 58% to
$12 million from $28.5 million.
- Adjusted EBITDA significantly
increased by $7.82 million from a negative $0.06 million to a
positive $7.76 million, and excluding the impact of our real estate
monetizations in 2021 and 2023, 2023 represented our highest
Adjusted EBITDA since the pandemic.
- Each of our global cinema and real
estate operating divisions grew operating income year-over-year in
2023.
- Basic loss per share improved by
16% to $1.38 compared to $1.64 for 2022.
- Net loss attributable to Reading
improved 15% to $30.7 million compared to $36.2 million for 2022.
Our 2023 results included $19.4 million of interest and $18.4
million of depreciation and amortization.
These improved key financial metrics came
despite the weakening of the Australian and New Zealand dollar
average exchange rates against the U.S. dollar by 4.3% and 3.3%,
respectively, compared to 2022. This foreign exchange weakening
contributed to our loss for the period, and negatively impacted our
overall financial results since about 50% of our total revenue is
generated in Australia and New Zealand.
Fourth Quarter 2023 Summary compared to
fourth quarter 2022
- Total Revenues decreased by 4.0%
(or $1.9 million) to $45.3 million compared to $47.2 million.
- Operating Loss improved 17.2% to $7
million compared to a net loss of $8.4 million.
- Net loss improved 6.3% to $12.4
million compared to a loss of $13.2 million, primarily driven by
improved cinema results in terms of lower operating expenses and
lower depreciation and amortization charges due to delays in Capex
spending.
- Basic Loss per Share improved 6.7%
(or $0.04) to a loss of $0.56 compared to a loss of $0.60.
Excluding the impact of real estate monetizations, this Basic Loss
per Share was the best fourth quarter result since the
pandemic.
- Adjusted EBITDA improved 51% to
negative $2.2 million, compared to negative $4.6 million.
The Australian dollar average exchange rates
weakened against the U.S. dollar by 0.8%, compared to Q4 2022,
while the New Zealand dollar average exchange rates stayed
relatively flat against the U.S. dollar compared to Q4 2022. The
exchange rate fluctuation contributed to our loss for the period,
and negatively impacted our overall financial results.
Key Points
Cinema Business
- Due to blockbuster and record
setting industry releases such as Barbie, The Super Mario Bros.
Movie, Oppenheimer, Guardians of the Galaxy Vol. 3, and Spider-Man:
Across the Spider-Verse, our 2023 global cinema revenues increased
9% to $207.6 million and our global cinema operating income of $0.1
million improved 101% compared to an operating loss of $11.7
million in 2022. This increased revenue came despite closing three
underperforming theaters in the U.S. and one theater in New Zealand
during 2023, but also reflect the opening of Angelika Cinemas at
South City Square in Brisbane Australia, Reading Cinemas with TITAN
LUXE in Busselton, Western Australia and the takeover of an
existing cinema in Armadale in Western Australia.
- The unprecedented 2023 Hollywood
Strikes impacted our Q4 2023 results and created real challenges
for early 2024. Film production was halted by the major studios and
streamers in May 2023 with the commencement of the Writers’ Strike.
Then, the subsequent SAG Strike resulted in the prohibition of
screen actors from doing publicity, marketing and promotion on any
film produced by the major studios. The gross box office of certain
cast driven films released after July 2023 failed to meet their
potential and major studios and film distributors moved certain
films off the 2023 theatrical release schedule.
- Despite the film product challenges
posed by the 2023 Hollywood Strikes, our operational teams
delivered on various metrics. In 2023, we generated all-time record
highs for (i) F&B spend per person at each cinema division,
(ii) cash flow pre-occupancy per person in the U.S. and Australian
cinema divisions and (iii) our highest Other Cinema Revenue in the
U.S.
- Net profit for the 2023 year and
fourth quarter was also materially adversely impacted by (i) a
further increase in interest rates, which increased our interest
expense by another approximately $1.6 million in 2023, and (ii) the
continued decline in the value of the Australian and New Zealand
dollar compared to the U.S. dollar, which was offset by the sale of
our Maitland property, which generated a $0.8 million gain.
Real Estate Business
- With respect to our global real
estate division, revenues increased by 18% to $19.9 million from
$16.8 million in 2022 and our operating income increased to $3.8
million year-over-year compared to $0.5 million in 2022. These
improvements were driven by (i) rent revenues from Petco, our
tenant which opened a successful flagship retail store at 44 Union
Square in NYC, (ii) the steady revenue from our 75 third-party
tenant Australian real estate portfolio that finished 2023 with a
97% occupancy rate and (iii) the year-over-year improved results of
our Live Theatre division (Minetta Lane Theatre and Orpheum
Theatres in New York City).
- Compared to the fourth quarter
2022, our fourth quarter 2023 global real estate division (i)
revenues slightly decreased from $4.6 million to $4.5 million and
(ii) operating income decreased by 8% to $0.58 million, compared to
an income of $0.63 million.
- In mid-March 2024, we appointed
George Comfort & Sons (www.gcomfort.com) as our new exclusive
leasing agent for 44 Union Square in NYC. Our new leasing agent is
a New York City based firm with expertise in positioning properties
and optimizing value in complex urban environments. We anticipate
that George Comfort will bring a creative and fresh approach to
activating leasing or other monetization strategies for the
remaining floors of 44 Union Square.
Balance Sheet and Liquidity
- As of December 31, 2023, our
cash and cash equivalents were $12.9 million, of which $7.1
million, $5.2 million and $0.7 million were held in the U.S.,
Australia and New Zealand, respectively. As of December 31,
2023, our total outstanding bank borrowings were $210.3 million
against total book value assets of $533.1 million.
- To support our overall liquidity,
we recently monetized two assets. On October 25, 2023, we monetized
our underperforming Maitland Australia (NSW) property for A$2.8
million, and leased back the 4-screen Reading Cinema on a
short-term basis. On February 23, 2024, we monetized our office
building at 5995 Sepulveda Blvd. Culver City, California for $10.0
million.
- During 2023 and into 2024, we
completed amendments to certain debt facilities.
- March 27, 2024 - Bank of
America/Bank of Hawaii extended our loan maturity date to August
18, 2025, together with relaxation of certain financial
covenants.
- January 26, 2024 - Santander
extended our loan maturity date to June 1, 2024.
- September 29, 2023 - Valley
National Bank extended our loan maturity date to October 1,
2024.
- November 28, 2023 - Westpac
extended our loan maturity date to January 1, 2025.
- We are currently reviewing all of
our real estate assets to identify further asset monetization
alternatives to raise additional liquidity to the extent needed in
order to maintain a stable foundation into the future. We expect
that by the end of 2024, we will monetize the fee interests under
certain of our international cinemas, while retaining leasehold
interests. In addition, we are currently evaluating alternatives
for our 26.6-acre industrial site in Williamsport, Pennsylvania.
Together with our 25% minority interest partner in the Cinemas 123
in New York City, we are exploring a sale of all or part of the
Cinemas 123 property or of our interest in that asset.
President and Chief Executive Officer, Ellen
Cotter said, “We’re pleased again with our year-over-year top line
progress post-pandemic. Not only did we deliver our highest Total
Revenues since the pandemic’s start, but also the highest operating
income and, excluding 2021 when we delivered $144.7 million in
gross real estate asset sales, the highest EBITDA since the start
of the pandemic. Disappointingly, the 2023 Hollywood Strikes
impacted our cinema revenues given the delays in major studio
releases in 2023 and continuing into Q1 2024. However, we believe
that the impacts of the Hollywood Strikes are temporary and more
and better film releases should commence toward the end of 2024 and
into 2025, driving, we hope, better cinema revenues for us.
The 2025 movie release schedule looks exciting
and encouraging. Disney’s line-up includes almost double the number
of releases compared to 2024 and should benefit greatly from
Disney’s reported re-focus on creativity and novel storylines.
Additionally, in 2025, James Cameron will deliver Avatar 3, Tom
Cruise returns in Mission: Impossible 8, Universal will release a
new Jurassic World film and Warner Bros. will release James Gunn’s
Superman from DC Studios.
As our global cinema business continues its
recovery, our real estate operations strengthen and we navigate
current global economic challenges, our ‘two business/three
country’ diversified business structure, together with our
dedicated global executive and employee team, will continue to
serve as the foundation for our Company’s ability to deliver
long-term value for our stockholders.”
Conference Call and Webcast
We plan to post our pre-recorded conference call
and audio webcast on our corporate website on April 3, 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 April 2,
2024 by 5:00 p.m. Eastern Standard 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, Angelika Film Centers,
Consolidated Theatres, and the State Cinema. Reading’s live
theatres are owned and operated by its Liberty Theaters subsidiary,
under the Orpheum and Minetta Lane names. Reading’s signature
property developments are maintained in special purpose entities
and operated under the names Newmarket Village, Cannon Park, and
The Belmont Common in Australia, Courtenay Central in New Zealand,
and 44 Union Square in New York City.
Additional information about Reading can be
obtained from the 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 2024 and 2025 and our revenue
expectations relating to such movie releases; our expectations
regarding our leasing agent at 44 Union Square; 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.
Reading International, Inc. and
SubsidiariesConsolidated Statements of
Operations(U.S. dollars in thousands, except share
information)
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
Revenues |
|
|
|
|
|
|
|
|
|
Cinema |
|
$ |
207,641 |
|
|
$ |
191,321 |
|
|
$ |
126,812 |
|
Real
estate |
|
|
15,103 |
|
|
|
11,794 |
|
|
|
12,248 |
|
Total revenues |
|
|
222,744 |
|
|
|
203,115 |
|
|
|
139,060 |
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
Cinema |
|
|
(187,418 |
) |
|
|
(178,768 |
) |
|
|
(122,901 |
) |
Real estate |
|
|
(8,763 |
) |
|
|
(8,947 |
) |
|
|
(10,106 |
) |
Depreciation and
amortization |
|
|
(18,422 |
) |
|
|
(20,918 |
) |
|
|
(22,746 |
) |
General and
administrative |
|
|
(20,172 |
) |
|
|
(21,416 |
) |
|
|
(25,100 |
) |
Impairment of long-lived assets |
|
|
— |
|
|
|
(1,549 |
) |
|
|
— |
|
Total costs and expenses |
|
|
(234,775 |
) |
|
|
(231,598 |
) |
|
|
(180,853 |
) |
Operating income (loss) |
|
|
(12,031 |
) |
|
|
(28,483 |
) |
|
|
(41,793 |
) |
Interest expense, net |
|
|
(19,418 |
) |
|
|
(14,392 |
) |
|
|
(13,688 |
) |
Gain (loss) on sale of
assets |
|
|
562 |
|
|
|
(54 |
) |
|
|
92,219 |
|
Other
income (expense) |
|
|
(164 |
) |
|
|
6,817 |
|
|
|
3,762 |
|
Income (loss) before income tax expense and equity earnings
of unconsolidated joint ventures |
|
|
(31,051 |
) |
|
|
(36,112 |
) |
|
|
40,500 |
|
Equity
earnings of unconsolidated joint ventures |
|
|
456 |
|
|
|
271 |
|
|
|
258 |
|
Income (loss) before income taxes |
|
|
(30,595 |
) |
|
|
(35,841 |
) |
|
|
40,758 |
|
Income
tax benefit (expense) |
|
|
(590 |
) |
|
|
(819 |
) |
|
|
(5,944 |
) |
Net income (loss) |
|
$ |
(31,185 |
) |
|
$ |
(36,660 |
) |
|
$ |
34,814 |
|
Less:
net income (loss) attributable to noncontrolling interests |
|
|
(512 |
) |
|
|
(476 |
) |
|
|
2,893 |
|
Net income (loss) attributable to Reading International,
Inc. |
|
$ |
(30,673 |
) |
|
$ |
(36,184 |
) |
|
$ |
31,921 |
|
Basic earnings (loss) per share |
|
$ |
(1.38 |
) |
|
$ |
(1.64 |
) |
|
$ |
1.46 |
|
Diluted earnings (loss) per share |
|
$ |
(1.38 |
) |
|
$ |
(1.64 |
) |
|
$ |
1.42 |
|
Weighted average number of shares
outstanding–basic |
|
|
22,222,635 |
|
|
|
22,020,921 |
|
|
|
21,801,719 |
|
Weighted average number of shares
outstanding–diluted |
|
|
23,347,308 |
|
|
|
22,956,245 |
|
|
|
22,406,816 |
|
|
Reading International, Inc. and
SubsidiariesConsolidated Balance
Sheets(U.S. dollars in thousands, except share
information)
|
|
December 31, |
|
|
2023 |
|
|
2022 |
|
ASSETS |
|
|
|
|
|
|
Current
Assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
12,906 |
|
|
$ |
29,947 |
|
Restricted cash |
|
|
2,535 |
|
|
|
5,032 |
|
Receivables |
|
|
7,561 |
|
|
|
6,206 |
|
Inventories |
|
|
1,648 |
|
|
|
1,616 |
|
Derivative financial instruments - current portion |
|
|
— |
|
|
|
907 |
|
Prepaid and other current assets |
|
|
2,881 |
|
|
|
3,804 |
|
Asset groups held for sale |
|
|
11,179 |
|
|
|
— |
|
Total Current Assets |
|
|
38,710 |
|
|
|
47,512 |
|
Operating properties, net |
|
|
262,417 |
|
|
|
286,952 |
|
Operating lease right-of-use
assets |
|
|
181,542 |
|
|
|
200,417 |
|
Investment and development
properties, net |
|
|
8,789 |
|
|
|
8,792 |
|
Investment in unconsolidated
joint ventures |
|
|
4,756 |
|
|
|
4,756 |
|
Goodwill |
|
|
25,535 |
|
|
|
25,504 |
|
Intangible assets, net |
|
|
2,038 |
|
|
|
2,391 |
|
Deferred tax assets, net |
|
|
299 |
|
|
|
447 |
|
Other
assets |
|
|
8,965 |
|
|
|
10,284 |
|
Total Assets |
|
$ |
533,051 |
|
|
$ |
587,055 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
Current
Liabilities: |
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
43,828 |
|
|
$ |
42,590 |
|
Film rent payable |
|
|
6,038 |
|
|
|
5,678 |
|
Debt - current portion |
|
|
49,234 |
|
|
|
37,279 |
|
Subordinated debt - current portion |
|
|
586 |
|
|
|
747 |
|
Taxes payable |
|
|
1,376 |
|
|
|
300 |
|
Deferred current revenue |
|
|
10,993 |
|
|
|
10,286 |
|
Operating lease liabilities - current portion |
|
|
23,047 |
|
|
|
23,971 |
|
Other current liabilities |
|
|
6,731 |
|
|
|
813 |
|
Total Current Liabilities |
|
|
141,833 |
|
|
|
121,664 |
|
Debt – long-term portion |
|
|
131,855 |
|
|
|
148,688 |
|
Subordinated debt -
non-current portion |
|
|
27,172 |
|
|
|
26,950 |
|
Noncurrent tax
liabilities |
|
|
6,586 |
|
|
|
7,117 |
|
Operating lease liabilities -
non-current portion |
|
|
180,898 |
|
|
|
200,037 |
|
Other
non-current liabilities |
|
|
11,711 |
|
|
|
19,320 |
|
Total Liabilities |
|
$ |
500,055 |
|
|
$ |
523,776 |
|
Commitments and Contingencies |
|
|
|
|
|
|
Stockholders’
Equity: |
|
|
|
|
|
|
Class A non-voting common
shares, par value $0.01, 100,000,000 shares authorized, |
|
|
|
|
|
|
33,602,627 issued and 20,666,516 outstanding at December 31, 2023
and 33,348,295 |
|
|
|
|
|
|
issued and 20,412,185 outstanding at December 31, 2022 |
|
$ |
237 |
|
|
$ |
235 |
|
Class B voting common shares,
par value $0.01, 20,000,000 shares authorized and |
|
|
|
|
|
|
1,680,590 issued and outstanding at December 31, 2023 and 2022 |
|
|
17 |
|
|
|
17 |
|
Nonvoting preferred shares,
par value $0.01, 12,000 shares authorized and no issued |
|
|
|
|
|
|
or outstanding shares at December 31, 2023 and 2022 |
|
|
— |
|
|
|
— |
|
Additional paid-in
capital |
|
|
155,402 |
|
|
|
153,784 |
|
Retained earnings (accumulated
deficit) |
|
|
(79,489 |
) |
|
|
(48,816 |
) |
Treasury shares, at cost |
|
|
(40,407 |
) |
|
|
(40,407 |
) |
Accumulated other comprehensive income |
|
|
(2,673 |
) |
|
|
(1,957 |
) |
Total Reading International, Inc. ("RDI") Stockholders’
Equity |
|
|
33,087 |
|
|
|
62,856 |
|
Noncontrolling Interests |
|
|
(91 |
) |
|
|
423 |
|
Total Stockholders’ Equity |
|
$ |
32,996 |
|
|
$ |
63,279 |
|
Total Liabilities and Stockholders’ Equity |
|
$ |
533,051 |
|
|
$ |
587,055 |
|
|
Reading International, Inc. and
SubsidiariesSegment Results(U.S. dollars
in thousands)
|
|
Quarter Ended |
|
Year Ended |
|
|
December 31, |
|
% ChangeFavorable/ |
|
December 31, |
|
% ChangeFavorable/ |
(Dollars in thousands) |
|
2023 |
|
|
2022 |
|
|
(Unfavorable) |
|
2023 |
|
|
2022 |
|
|
(Unfavorable) |
Segment revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cinema |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
$ |
23,740 |
|
|
$ |
24,550 |
|
|
(3 |
)% |
|
$ |
113,798 |
|
|
$ |
97,082 |
|
|
17 |
% |
Australia |
|
|
15,687 |
|
|
|
16,095 |
|
|
(3 |
)% |
|
|
80,025 |
|
|
|
79,892 |
|
|
- |
% |
New Zealand |
|
|
2,483 |
|
|
|
3,199 |
|
|
(22 |
)% |
|
|
13,818 |
|
|
|
14,346 |
|
|
(4 |
)% |
Total |
|
$ |
41,910 |
|
|
$ |
43,844 |
|
|
(4 |
)% |
|
$ |
207,641 |
|
|
$ |
191,320 |
|
|
9 |
% |
Real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
$ |
1,196 |
|
|
$ |
1,249 |
|
|
(4 |
)% |
|
$ |
6,198 |
|
|
$ |
3,037 |
|
|
>100 |
% |
Australia |
|
|
2,972 |
|
|
|
2,910 |
|
|
2 |
% |
|
|
12,163 |
|
|
|
12,246 |
|
|
(1 |
)% |
New Zealand |
|
|
364 |
|
|
|
393 |
|
|
(7 |
)% |
|
|
1,509 |
|
|
|
1,534 |
|
|
(2 |
)% |
Total |
|
$ |
4,532 |
|
|
$ |
4,552 |
|
|
- |
% |
|
$ |
19,870 |
|
|
$ |
16,817 |
|
|
18 |
% |
Inter-segment elimination |
|
|
(1,123 |
) |
|
|
(1,190 |
) |
|
6 |
% |
|
|
(4,767 |
) |
|
|
(5,023 |
) |
|
5 |
% |
Total segment
revenue |
|
$ |
45,319 |
|
|
$ |
47,206 |
|
|
(4 |
)% |
|
$ |
222,744 |
|
|
$ |
203,114 |
|
|
10 |
% |
Segment operating
income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cinema |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
$ |
(2,643 |
) |
|
$ |
(4,845 |
) |
|
45 |
% |
|
$ |
(5,825 |
) |
|
$ |
(17,187 |
) |
|
66 |
% |
Australia |
|
|
(1,094 |
) |
|
|
(891 |
) |
|
(23 |
)% |
|
|
5,278 |
|
|
|
4,945 |
|
|
7 |
% |
New Zealand |
|
|
(395 |
) |
|
|
(79 |
) |
|
(>100) |
% |
|
|
671 |
|
|
|
526 |
|
|
28 |
% |
Total |
|
$ |
(4,132 |
) |
|
$ |
(5,815 |
) |
|
29 |
% |
|
$ |
124 |
|
|
$ |
(11,716 |
) |
|
>100 |
% |
Real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
$ |
(538 |
) |
|
$ |
(367 |
) |
|
(47 |
)% |
|
$ |
(752 |
) |
|
$ |
(3,640 |
) |
|
79 |
% |
Australia |
|
|
1,372 |
|
|
|
1,112 |
|
|
23 |
% |
|
|
5,344 |
|
|
|
5,157 |
|
|
4 |
% |
New Zealand |
|
|
(255 |
) |
|
|
(114 |
) |
|
(>100) |
% |
|
|
(801 |
) |
|
|
(1,011 |
) |
|
21 |
% |
Total |
|
$ |
579 |
|
|
$ |
631 |
|
|
(8 |
)% |
|
$ |
3,791 |
|
|
$ |
506 |
|
|
>100 |
% |
Total segment
operating income (loss)(1) |
|
$ |
(3,553 |
) |
|
$ |
(5,184 |
) |
|
31 |
% |
|
$ |
3,915 |
|
|
$ |
(11,210 |
) |
|
>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
SubsidiariesReconciliation of EBITDA and Adjusted
EBITDA to net income (loss)(U.S. dollars in thousands)
|
|
Quarter Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
(Dollars in thousands) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Net income (loss) |
|
$ |
(12,384 |
) |
|
$ |
(13,220 |
) |
|
$ |
(30,673 |
) |
|
$ |
(36,184 |
) |
Adjustments for: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
5,355 |
|
|
|
4,150 |
|
|
|
19,418 |
|
|
|
14,392 |
|
Income tax (benefit) expense |
|
|
277 |
|
|
|
(673 |
) |
|
|
590 |
|
|
|
819 |
|
Depreciation and amortization |
|
|
4,514 |
|
|
|
5,137 |
|
|
|
18,422 |
|
|
|
20,918 |
|
EBITDA |
|
$ |
(2,238 |
) |
|
$ |
(4,606 |
) |
|
$ |
7,757 |
|
|
$ |
(55 |
) |
Adjustments for: |
|
|
|
|
|
|
|
|
|
|
|
|
None |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Adjusted
EBITDA |
|
$ |
(2,238 |
) |
|
$ |
(4,606 |
) |
|
$ |
7,757 |
|
|
$ |
(55 |
) |
|
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.
For more information, contact:
Gilbert Avanes – EVP, CFO, and Treasurer
Andrzej Matyczynski – EVP Global Operations
(213) 235-2240
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