Reading International Announces

1st Quarter 2014 Results

 

Los Angeles, California, - (BUSINESS WIRE) –May 7, 2014– Reading International, Inc. (NASDAQ: RDI) announced today the results for its quarter ended March 31, 2014.

 

2014 Highlights

 

 

First Quarter 2014 Discussion

 

Revenue from operations decreased from $59.6 million in the 2013 Quarter to $58.1 million in the same Quarter in 2014, a $1.5 million or a 2.5% decrease. 

 

Cinema segment revenue decreased by $1.3 million or 2.5%. This decrease was predominately driven by a $3.1 million decrease in Australian cinema revenue, itself driven by currency fluctuations, see below, and was offset by a $1.3 million increase in U.S. box office admissions. However, in terms of actual attendance, U.S. and Australia have seen an improvement of 9.7% and 2.4%, respectively, from the 2013 Quarter. 

 

The top three grossing films for the 2014 Quarter in our worldwide cinema circuit were “Frozen” “Wolf of Wall Street” and “Hobbit: Desolation of Smaug.”  These three films accounted for approximately 17.6% of our cinema box office revenue.  The comparative top three grossing films for the 2013 Quarter were “Silver Linings Playbook,” “Oz Great and Powerful,” and “Hobbit: An Unexpected Journey,”  which accounted for approximately 18.0% of our cinema box office revenue.    

 

Our real estate segment revenue decreased for the 2014 Quarter by $130,000 compared to the same period in 2013 primarily due to a loss of revenue in New Zealand of approximately $487,000 from the shutdown of the Courtenay  Central parking structure resulting from the earthquake that hit Wellington in July 2013, and the termination of the Hoyts lease at our Dunedin property.   These decreases were offset by a significant increase in rental income from our live theatre venues in the U.S.  Also, real property values in New York City, where we own the Cinemas 1,2,3 property on Third Avenue, the Union Square Theater property on Union Square, the Orpheum property on Second Avenue and the Minetta  property on Minetta Lane, continue to escalate.  We are continuing our work to redevelop our Cinemas 1,2,3 and Union Square Properties.     

 

As a percentage of revenue, operating expense was 80.6% of revenue in the 2014 Quarter compared to 81.8% in the 2013 Quarter.  

 

For our statement of operations, the Australian quarterly average exchange rate to U.S. dollar declined to 0.8974 for the 2014 Quarter from 1.0385 for the 2013 Quarter, a decrease of 13.6%.  The New Zealand quarterly average exchange rate to U.S. dollar climbed to 0.8370 for the 2014 Quarter from 0.8346 for the 2013 Quarter, an increase of 0.3%.  Both had an impact on the individual components of our income statement.

 

Driven by the above factors, our operating income for the 2014 Quarter increased by $47,000 to

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an operating income of $2.6 million compared to an operating income of $2.5 million in the same quarter last year.

 

Net interest expense decreased by $376,000 for the 2014 Quarter compared to the 2013 Quarter.  The decrease in interest expense primarily resulted from an overall decrease in our worldwide debt balances, specifically the payoff of the $9.0 million U.S. Sutton Hill Capital Note which was paid off on December 31, 2013.    

For the 2014 Quarter, we recorded $1.1 million of other income, which consisted primarily of insurance proceeds from the Courtenay Central parking structure and $310,000 in income from unconsolidated entities.  For the 2013 Quarter, we recorded $356,000 of other income, which consisted primarily of $347,000 in income from unconsolidated entities. 

 

For the 2014 Quarter, our income tax expense increased by $703,000 compared to the 2013 Quarter primarily associated with changes in tax provisions.

 

Because of the above, we reported a net loss of $215,000 for the 2014 Quarter compared to a net loss of $668,000 in the 2013 Quarter.

 

Our EBITDA(1) at $7.5 million for the 2014 Quarter was $595,000 or 8.6% higher than the EBITDA(1) for the 2013 Quarter of $6.9 million. 

 

Our Adjusted EBITDA(1) for the 2014 Quarter was $6.8 million after excluding the $687,000 Courtenay Central car park insurance claim included in other income.  For the 2013 Quarter, our adjusted EBITDA(1) was $6.9 million as there were no adjustments for the 2013 Quarter.   This resulted in a decrease in Adjusted EBITDA(1) of $92,000 or 1.3% from the 2013 Quarter to the 2014 Quarter.

 

 

Balance Sheet and Liquidity

 

Our total assets at March 31, 2014 were $387.4 million compared to $386.8 million at December 31, 2013.  The currency exchange rates for Australia and New Zealand as of March 31, 2014 were $0.9275 and $0.8684, respectively, and as of December 31, 2013, these rates were $0.8929 and $0.8229, respectively. 

 

On June 30, 2014 our Australian NAB Corporate Term loan and Revolver of $56.8 million will be due for repayment.  In addition, the U.S Cinema 1,2,3 Term loan of $15.0 million will be due for repayment on June 27, 2014. We are actively pursuing refinancing options for the mentioned loans prior to their respective due dates.

 

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Our New Zealand Corporate Credit facility of $24.3 million has been reclassed from long-term term to short-term loan status since the loan will be due on March 31, 2015. 

 

Our cash position at March 31, 2014 was $33.6 million.  Of the $33.6 million, $9.1 million was in Australia, $15.4 million was in the U.S., and $9.1 million was in New Zealand.  As part of our main credit facilities in Australia, New Zealand, and the U.S., we are subject to certain debt covenants which limit the transfer or use of cash outside of the various regional subsidiaries in which the cash is held.  As such, at March 31, 2014,  we had approximately $13.0 million of cash worldwide that was not restricted by loan covenants.

 

At March 31, 2014, we had undrawn funds of $4.6 million (AUS$5.0 million) available under our NAB line of credit in Australia, $10.4 million (NZ$12.0 million) available under our New Zealand Corporate Credit facility, and $5.0 million available under our Bank of America revolving loan credit facility in the U.S.  Accordingly, we believe that we have sufficient borrowing capacity under our various credit facilities, together with our $33.6 million cash balance, to meet our anticipated short-term working capital requirements.

 

Our working capital at March 31, 2014 was a negative $91.4 million compared to a negative $71.8 million at December 31, 2013.  This increase in negative working capital resulted primarily from our New Zealand Bank note changing from long-term to current borrowing on our balance sheet, as discussed above.

 

Stockholders’ equity was $129.2 million at March 31, 2014 compared to $121.7 million at December 31, 2013, primarily related to distributions to noncontrolling interests.

 

 

 

About Reading International, Inc.

 

Reading International (http://www.readingrdi.com) is in the business of owning and operating cinemas and developing, owning and operating real estate assets.  Our business consists primarily of:

 

 

Reading manages its worldwide business under various different brands:

 

 

 

 

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Forward-Looking Statements

 

Our statements in this press release contain a variety of forward-looking statements as defined by the Securities Litigation Reform Act of 1995.  Forward-looking statements reflect only our expectations regarding future events and operating performance and necessarily speak only as of the date the information was prepared.  No guarantees can be given that our expectation will in fact be realized, in whole or in part.  You can recognize these statements by our use of words such as, by way of example, “may,” “will,” “expect,” “believe,” and “anticipate” or other similar terminology.

 

These forward-looking statements reflect our expectation after having considered a variety of risks and uncertainties.  However, they are necessarily the product of internal discussion and do not necessarily completely reflect the views of individual members of our Board of Directors or of our management team.  Individual Board members and individual members of our management team may have different views as to the risks and uncertainties involved, and may have different views as to future events or our operating performance.

 

Among the factors that could cause actual results to differ materially from those expressed in or underlying our forward-looking statements are the following:

 

 

 

 

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The above list is not necessarily exhaustive, as business is by definition unpredictable and risky, and subject to influence by numerous factors outside of our control such as changes in government regulation or policy, competition, interest rates, supply, technological innovation, changes in consumer taste and fancy, weather, and the extent to which consumers in our markets have the economic wherewithal to spend money on beyond-the-home entertainment.

 

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.

 

Finally, 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.

 

Additionally, certain of the presentations included in this press release may contain “pro forma” information or “non-US GAAP financial measures.”  In such case, a reconciliation of this information to our US GAAP financial statements will be made available in connection with such statements.

 

For more information, contact:

 

Andrzej Matyczynski, Chief Financial Officer

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Reading International, Inc.  (213) 235-2240

 

Reading International, Inc. and Subsidiaries

Supplemental Data

Reconciliation of EBITDA* to Net Loss

(dollars in thousands, except per share amounts)

 

 

 

 

*EBITDA presented above is net loss adjusted for interest expense (net of interest income), income tax expense, depreciation and amortization expense, and if appropriate, an adjustment for discontinued operations (this includes interest expense and depreciation and amortization for the discontinued operations).

 

Reconciliation of EBITDA* to the net loss is presented below:

 

 

 

 

 

 

 

 

 

Reading International, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations (Unaudited)

(U.S. dollars in thousands, except per share amounts)

 

 

 

 

 

 

 

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Reading International, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

(U.S. dollars in thousands)

 

 

 

 

 

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