Earnings Call Webcast to Discuss First Quarter
Financial Results and COVID-19 Business Updates Scheduled to Post
to Corporate Website on Thursday, May 12, 2022
Reading International, Inc. (NASDAQ: RDI) (the “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 first quarter ended
March 31, 2022.
President and Chief Executive Officer, Ellen Cotter said, “Our
Company continues its path to recovery, achieving worldwide
revenues of $40.2 million, nearly double revenues of $21.3 million
for the same period in 2021. Almost all of our global cinemas were
open during the first quarter 2022 and movies, like The Batman,
Uncharted and The Worst Person in the World, attracted audiences.
After an enthusiastic and optimistic CinemaCon in Las Vegas at the
end of April, our confidence in the cinema business remains strong
in light of upcoming 2022 movies, like Minions: The Rise of Gru,
Top Gun: Maverick, Jurassic World: Dominion, Bullet Train, Elvis,
Thor: Love and Thunder, Black Adam, Black Panther: Wakanda Forever,
Babylon, and Avatar: The Way of Water.”
“With respect to our real estate business, we are encouraged by
the continued improvement in our portfolio over the first quarter,
particularly due to the execution of a long-term lease for the
three retail floors of our historic 44 Union Square property in New
York City. And, substantially all our 72 third-party tenants in our
Australian and New Zealand properties were either open or in the
process of building out or refurbishing tenant improvements, as of
March 31, 2022.”
Ms. Cotter concluded, “Our ‘two business/three country’
diversified business structure, strategic adaptability and
dedicated global executive and employee team continue to serve as
the foundation for a recovery from the devastating impacts of the
COVID-19 pandemic over the past two years.”
Key Consolidated Financial Results for
the First Three Months of 2022
- Achieved worldwide revenues of $40.2 million, nearly double
revenues of $21.3 million for the same period in 2021.
- Operating loss reduced to ($11.8) million, compared to an
operating loss of ($14.0) million for the same period in 2021.
- Due to the successful monetizations of our properties in
Manukau, New Zealand, and Coachella in Q1 2021, which generated
$61.1 million of sales proceeds for Reading, our Q1 2022 basic loss
per share of ($0.70) decreased from our basic earnings per share of
$0.87 for Q1 2021.
- For the same reason above, net loss attributable to Reading
International, Inc. was ($15.4) million in Q1 2022, compared to a
net income of $19.0 million for the same period in 2021
- The Australian dollar and New Zealand dollar average exchange
rates weakened against the U.S. dollar by 6.3% and 6.0%,
respectively, compared to the same period in the prior year.
Key Cinema Business
Highlights
Cinema segment revenues for Q1 2022 increased by $19.2 million,
to $37.3 million compared to Q1 2021. Cinema segment operating loss
for Q1 2022 decreased by $1.1 million, to a loss of ($7.1) million
compared to the same period in 2021. The changes between 2021 and
2022 were related to (i) more days of operations for our cinema
circuit because of fewer government mandates and (ii) a stronger
film slate despite the presence of the Omicron BA.2 and other
variants.
Our variable operating costs increased accordingly, in line with
these changes to the operational landscape. With regard to
occupancy, costs increased in Australia and New Zealand as a result
of internal rent that was abated during 2021. We continue in
occupancy in all of our cinemas and have not lost any cinema assets
as a result of the COVID-19 pandemic.
In March 2022, we re-launched our Consolidated Theatre in
Kapolei, in Western Oahu, Hawaii with eight screens featuring
recliner seating and a renovation of the lobby areas.
Key Real Estate Business
Highlights
Real estate segment revenue for Q1 2022 increased by $0.8
million to $4.2 million, compared to Q1 2021. Real estate segment
operating income for Q1 2022 increased by $1.5 million, to $0.1
million compared to Q1 2021. The changes between 2021 and 2022 were
attributable to (i) an increase in internal rental income in
Australia and New Zealand that was abated during 2021 and (ii)
rental revenue generated from our two Live Theatres in New York
City, which were both closed during Q1 2021.
On July 20, 2021, our Orpheum Theatre in New York City reopened
to the public with the resumption of STOMP, which was amongst the
first New York shows to resume live public performances. On October
8, 2021, live public performances resumed at our Minetta Lane
Theatre in New York, which continues to be licensed by Audible, an
Amazon company.
Key Balance Sheet, Cash, and Liquidity
Highlights
As of March 31, 2022, our cash and cash equivalents were $67.3
million. As of March 31, 2022, we had total debt of $238.1 million
against total book value assets of $670.6 million, compared to
$236.9 million and $687.7 million, respectively, as of December 31,
2021.
- On March 3, 2022, we exercised the first of two six-month
options to extend the Cinemas 1,2,3 Term Loan, taking the maturity
to October 1, 2022
For more information about our borrowings, please refer to Part
I – Financial Information, Item 1 – Notes to Consolidated Financial
Statements-- Note 11 – Borrowings.
Conference Call and
Webcast
We plan to post our pre-recorded conference call and audio
webcast on our corporate website on May 12, 2022, 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 by 5:00 p.m. Eastern
Time on May 11, 2022. The audio webcast can be accessed by visiting
https://investor.readingrdi.com/financials after Midnight Eastern
Time on May 12, 2022.
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 by Angelika. Its live theatres are
owned and operated by its Liberty Theaters subsidiary, under the
Orpheum and Minetta Lane names. Its 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 our
Company's website: http://www.readingrdi.com.
Cautionary Note Regarding
Forward-Looking Statements
This earnings release contains forward-looking statements within
the safe harbor provisions of the U.S. Private Securities
Litigation Reform Act of 1995. Forward-looking statements can be
identified by words such as: "may," "will," "expect," "believe,"
"intend," "future," and "anticipate" and similar references to
future periods. Examples of forward-looking statements include,
among others, statements we make regarding our expected operating
results; our expectations regarding the timing of the reopening of
our cinemas and theatres; our expectations regarding the future of
the cinema exhibition industry; our belief regarding our
diversified business/country diversification strategy; our
expectations regarding the relationship with our landlords and
lenders; our expectations regarding the leasing and performance of
our various real estate assets, including 44 Union Square; and our
expectations of our liquidity. For more detailed information on our
Forward-looking statements, see the factors discussed under the
caption CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
in our Annual Report on Form 10-K for the year ended December 31,
2021, and of our quarterly report on Form 10-Q for the quarter
ended March 31, 2022.
Forward-looking statements are neither historical facts nor
assurances of future performance. Instead, they are based only on
our current beliefs, expectations, and assumptions regarding the
future of our business, future plans and strategies, projections,
anticipated events and trends, the economy, and other future
conditions. 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. Our actual results and financial
condition may differ materially from those indicated in the
forward-looking statements. 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, the adverse impact of the COVID-19 pandemic
and any variant thereof on short-term and/or long-term
entertainment, leisure and discretionary spending habits and
practices of our patrons and on our results from operations,
liquidity, cash flows, financial condition, and access to credit
markets, and 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 year ended December 31, 2021, 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.
Any forward-looking statement made by us in this Earnings
Release is based only on information currently available to us and
speaks only as of the date on which it is made. We undertake no
obligation to publicly update any forward-looking statement,
whether written or oral, that may be made from time to time,
whether as a result of new information, future developments or
otherwise.
Reading International, Inc. and
Subsidiaries
Unaudited Consolidated Statements of
Operations
(Unaudited; U.S. dollars in thousands,
except per share data)
Three Months Ended
March 31,
2022
2021
Revenue
Cinema
$
37,347
$
18,115
Real estate
2,853
3,192
Total revenue
40,200
21,307
Costs and expenses
Cinema
(38,503
)
(21,882
)
Real estate
(2,157
)
(2,655
)
Depreciation and amortization
(5,524
)
(5,650
)
General and administrative
(5,796
)
(5,097
)
Total costs and expenses
(51,980
)
(35,284
)
Operating income (loss)
(11,780
)
(13,977
)
Interest expense, net
(3,205
)
(4,363
)
Gain (loss) on sale of assets
—
46,545
Other income (expense)
(781
)
1,641
Income (loss) before income tax expense
and equity earnings of unconsolidated joint ventures
(15,766
)
29,846
Equity earnings of unconsolidated joint
ventures
(65
)
(50
)
Income (loss) before income
taxes
(15,831
)
29,796
Income tax benefit (expense)
378
(7,728
)
Net income (loss)
$
(15,453
)
$
22,068
Less: net income (loss) attributable to
noncontrolling interests
(99
)
3,103
Net income (loss) attributable to
Reading International, Inc.
$
(15,354
)
$
18,965
Basic earnings (loss) per share
$
(0.70
)
$
0.87
Diluted earnings (loss) per
share
$
(0.70
)
$
0.86
Weighted average number of shares
outstanding–basic
21,955,985
21,761,307
Weighted average number of shares
outstanding–diluted
22,500,658
22,170,268
Reading International, Inc. and Subsidiaries Consolidated
Balance Sheets
(U.S. dollars in thousands, except share
information)
March 31,
December 31,
2022
2021
ASSETS
(unaudited)
Current Assets:
Cash and cash equivalents
$
67,263
$
83,251
Restricted cash
4,552
5,320
Receivables
3,358
5,360
Inventories
1,350
1,408
Derivative financial instruments - current
portion
793
96
Prepaid and other current assets
6,207
4,871
Total current assets
83,523
100,306
Operating property, net
306,693
306,657
Operating lease right-of-use assets
224,754
227,367
Investment and development property,
net
9,668
9,570
Investment in unconsolidated joint
ventures
5,108
4,993
Goodwill
27,232
26,758
Intangible assets, net
3,058
3,258
Deferred tax asset, net
2,233
2,220
Derivative financial instruments -
non-current portion
109
112
Other assets
8,239
6,461
Total assets
$
670,617
$
687,702
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current Liabilities:
Accounts payable and accrued
liabilities
$
40,055
$
39,678
Film rent payable
3,180
7,053
Debt - current portion
40,976
11,349
Subordinated debt - current portion
720
711
Derivative financial instruments - current
portion
85
181
Taxes payable - current
10,742
10,655
Deferred revenue
9,422
9,996
Operating lease liabilities - current
portion
24,397
23,737
Other current liabilities
9,559
3,619
Total current liabilities
139,136
106,979
Debt - long-term portion
166,861
195,198
Subordinated debt, net
26,783
26,728
Noncurrent tax liabilities
7,534
7,467
Operating lease liabilities - non-current
portion
220,215
223,364
Other liabilities
16,594
22,906
Total liabilities
$
577,123
$
582,642
Commitments and contingencies (Note
14)
Stockholders’ equity:
Class A non-voting common shares, par
value $0.01, 100,000,000 shares authorized, 33,250,482 issued and
20,314,372 outstanding at March 31, 2022 and 33,198,500 issued and
20,262,390 outstanding at December 31, 2021
234
233
Class B voting common shares, par value
$0.01, 20,000,000 shares authorized and 1,680,590 issued and
outstanding at March 31, 2022 and December 31, 2021
17
17
Nonvoting preferred shares, par value
$0.01, 12,000 shares authorized and no issued or outstanding shares
at March 31, 2022 and December 31, 2021
—
—
Additional paid-in capital
152,364
151,981
Retained earnings/(deficits)
(27,986
)
(12,632
)
Treasury shares
(40,407
)
(40,407
)
Accumulated other comprehensive income
8,406
4,882
Total Reading International, Inc.
stockholders’ equity
92,628
104,074
Noncontrolling interests
866
986
Total stockholders’ equity
93,494
105,060
Total liabilities and stockholders’
equity
$
670,617
$
687,702
Reading International, Inc. and Subsidiaries
Segment Results
(Unaudited; U.S. dollars in thousands)
Three Months Ended
March 31,
% Change Favorable/
(Dollars in thousands)
2022
2021
(Unfavorable)
Segment revenue
Cinema
United States
$
17,517
$
3,790
>100
%
Australia
16,981
12,118
40
%
New Zealand
2,849
2,207
29
%
Total
$
37,347
$
18,115
>100
%
Real estate
United States
$
676
$
219
>100
%
Australia
3,130
2,874
9
%
New Zealand
356
230
55
%
Total
$
4,162
$
3,323
25
%
Inter-segment elimination
(1,309
)
(131
)
(>100
)%
Total segment revenue
$
40,200
$
21,307
89
%
Segment operating income (loss)
Cinema
United States
$
(6,319
)
$
(8,960
)
29
%
Australia
(572
)
816
(>100
)%
New Zealand
(325
)
(131
)
(>100
)%
Total
$
(7,216
)
$
(8,275
)
13
%
Real estate
United States
$
(1,063
)
$
(1,544
)
31
%
Australia
1,444
659
>100
%
New Zealand
(277
)
(483
)
43
%
Total
$
104
$
(1,368
)
>100
%
Total segment operating income (loss)
(1)
$
(7,112
)
$
(9,643
)
26
%
(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)
Three Months Ended
March 31,
(Dollars in thousands)
2022
2021
Net Income (loss) attributable to Reading
International, Inc.
$
(15,354
)
$
18,965
Add: Interest expense, net
3,205
4,363
Add: Income tax expense (benefit)
(378
)
7,728
Add: Depreciation and amortization
5,524
5,650
EBITDA
$
(7,003
)
$
36,706
Adjustments for:
Legal expenses relating to the Derivative
litigation, the James J. Cotter Jr. employment arbitration and
other Cotter litigation matters
—
26
Adjusted EBITDA
$
(7,003
)
$
36,732
Reading International, Inc. and
Subsidiaries
Reconciliation of Total Segment
Operating Income (Loss) to Income (Loss) before Income
Taxes
(Unaudited; U.S. dollars in thousands)
Three Months Ended
March 31,
(Dollars in thousands)
2022
2021
Segment operating income (loss)
$
(7,112
)
$
(9,643
)
Unallocated corporate expense
Depreciation and amortization expense
(277
)
(231
)
General and administrative expense
(4,391
)
(4,103
)
Interest expense, net
(3,205
)
(4,363
)
Equity earnings of unconsolidated joint
ventures
(65
)
(50
)
Gain (loss) on sale of assets
—
46,545
Other income (expense)
(781
)
1,641
Income (loss) before income tax
expense
$
(15,831
)
$
29,796
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220510005606/en/
Gilbert Avanes – EVP, CFO, and Treasurer Andrzej Matyczynski –
EVP Global Operations (213) 235-2240
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