RDIB Reading International Inc

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): August 14, 2024

Reading International, Inc.

(Exact Name of Registrant as Specified in its Charter)

Registrant's telephone number, including area code: (213) 235-2240

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨

‎

Item 2.02 Results of Operations and Financial Condition.

On August 14, 2024, Reading International, Inc. issued a press release announcing information regarding its results of operations and financial condition for the quarter ended June 30, 2024, a copy of which is attached as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

‎

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Reading International Reports Second Quarter 2024 Results

Earnings Call Webcast to Discuss Second Quarter Financial Results

Scheduled to Post to Corporate Website on Friday,  August  16, 2024



NEW YORK - August 14, 2024 - 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





Key Financial Results – Six Months of 2024





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 1.3% and 2.1%, respectively, compared to Q2 2023



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 $1 billion 2024 movie at the

global box office after Inside Out 2, drove our global cinema cash flow in July 2024 to be in the top five highest months since the pandemic began.  And, just this past weekend, It Ends with Us, a female driven movie based on a bestselling novel which appears to have become an event movie, has now exceeded all box office expectations by delivering a global debut of $80 million.  With highly anticipated releases such as Beetlejuice Beetlejuice, Joker: Folie à Deux, Moana 2, Wicked and Mufasa: The Lion King, we look forward to the last half of 2024. Looking ahead to 2025, we’re encouraged by the box office potential for James Cameron's Avatar 3, a new Jurassic World film from Universal, Tom Cruise in Mission: Impossible 8,  The Fantastic Four, and James Gunn's Superman from DC Studios for Warner Bros.



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 $10 million (using the proceeds to retire $8.4 million of debt and reduce ongoing G&A expense).  In addition, we have taken steps to market our Cannon Park property in Townsville Australia. Despite this initiative, we do not anticipate any adverse impact on our cinema operations, as we will continue to operate our cinema at this location.  In Wellington, New Zealand, we are marketing a unique opportunity to acquire our five contiguous parcels assembled in the entertainment core of New Zealand’s capital city. We believe this once-in-a-lifetime opportunity offers significant development options. We intend to reserve the right to operate any cinema constructed on these Wellington properties ensuring the future continuity of our cinema business.    



“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





Real Estate Business





Balance Sheet and Liquidity



As of June 30, 2024,



Through Q2 2024, we worked closely with certain lenders to amend our existing debt facilities and extend upcoming maturity dates.







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)













Reading International, Inc. and Subsidiaries

Consolidated Balance Sheets

(U.S. dollars in thousands, except share information)











Reading International, Inc. and Subsidiaries

Segment Results

(Unaudited; U.S. dollars in thousands)











Reading International, Inc. and Subsidiaries

Reconciliation of EBITDA and Adjusted EBITDA to Net Income (Loss)

(Unaudited; U.S. dollars in thousands)















Reading International, Inc. and Subsidiaries

Reconciliation of Total Segment Operating Income (Loss) to Income (Loss) before Income Taxes

(Unaudited; U.S. dollars in thousands)







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.