- Revenue from operations was up 19.8% over the 2008 quarter, to
$46.1 million LOS ANGELES, May 14 /PRNewswire-FirstCall/ -- Reading
International, Inc. (NYSE Amex: RDI) announced today results for
its quarter ended March 31, 2009. (Logo:
http://www.newscom.com/cgi-bin/prnh/20030403/LATH058LOGO) First
Quarter 2009 Highlights The following impacted our first quarter
2009 business: -- the remaining retail condominium of our Place 57
joint venture was sold in February 2009 for approximately $4.0
million of which $304,000 was attributable to our equity earnings
from investment which passed through the income statement. In
April, we received a cash disbursement from this investment of $1.2
million of which $859,000 was a return of investment; -- we
completed the construction of our Indooroopilly, Brisbane,
Australia office development in April 2009 with an approximate
total construction cost of $9.0 million (AUS$13.0 million) which
was primarily financed with a construction loan of $5.0 million
(AUS$7.2 million); -- in March 2009, we received the third of five
payments, this one in the amount of $265,000 (AUS$400,000) for the
sale option on our Auburn property. To date, we have received $1.5
million (AUS$2.0 million) of the $2.5 million (AUS$3.6 million) in
option installments required by the option agreement. Based on the
conforming nature of this agreement, we believe that buyers will
exercise their option to purchase the property for $28.5 million
(AUS$36.0 million); -- our real estate segment revenue was slightly
higher for the 2009 Quarter compared to the 2008 Quarter. The
increase in real estate expense was primarily due to certain
property holding costs that were previously capitalized in the 2008
Quarter, but, due to our property development efforts being
curtailed, were expensed during the 2009 Quarter. Also, real estate
expense increased relating to our newly acquired Consolidated
Entertainment cinemas that have ancillary real estate activities.
Please see attached supplemental segment reporting schedule; --
during the quarter, we reacquired a portion of our Trust Preferred
Securities for $11.5 million for which we were able to extinguish
$22.9 million of our debt related to these securities on April 30,
2009. This resulted in a decrease in our cash balance from $30.9
million in December 2008 to $14.5 million in March 2009; -- we
secured on December 31, 2008, a waiver of covenants for our Trust
Preferred Securities for a period of nine years; -- we have entered
into settlement negotiations with the defendants of our Malulani
Investment Litigation which has resulted in an agreed upon cash
payment to us of $2.5 million and a promissory note to us for $6.75
million. Based on our shareholders' agreement with Magoon
Investments, we are entitled to recover substantially all of our
litigation costs and investment before any distributions are made
to them; and -- the decrease in the value of the Australian and New
Zealand dollars vis-a-vis the US dollar from $0.9132 and $0.7860,
respectively, as of March 31, 2008 to $0.6926 and $0.5715,
respectively, as of March 31, 2009. The devaluation of these
currencies has resulted in lower operational earnings for the 2009
Quarter compared to the 2008 Quarter even though our earnings in
the local currencies have increased. By way of example, our
Australian cinema revenues in local currency increased by 12.9%
whereas the same revenues translated to the U.S. dollar decreased
by 14.5% due to the aforementioned currency fluctuations. First
Quarter 2009 Discussion On February 22, 2008, we acquired 15
cinemas with 181 screens in Hawaii and California, the
"Consolidated Entertainment" acquisition. As a result of this
acquisition the 2008 quarter included only 39 days of these
cinemas' operating results. These assets provided an operational
income before depreciation and amortization in the 2009 Quarter of
$2.0 million. Revenue from operations increased from $38.5 million
in the 2008 quarter to $46.1 million in 2009, a 19.8% increase. The
cinema revenue increase of $8.4 million was due to the US segment,
which was further the result of the Consolidated Entertainment
acquisition. The results of Australia and New Zealand were affected
negatively by the previously mentioned currency change even though
we noted increased foreign revenues in the local currencies for the
periods mentioned. The top 3 grossing films for the quarter in our
circuit worldwide were: "Slumdog Millionaire," "Gran Torino" and
"He's Just Not That into You," which between them accounted for
approximately 20.3% of our cinema box office revenue. The real
estate revenue was flat from quarter to quarter. As a percentage of
revenue, operating expense, at 78.5% in the 2009 quarter was higher
than the 74.3% of the 2008 quarter. The primary driver for this was
the higher film rent expense associated with our Consolidated
Entertainment cinemas' acquisition, whose film product is primarily
wide release films resulting in higher film rent cost compared to
our predominantly pre-acquisition art cinemas in the United States.
Depreciation and amortization increased by $180,000, or 4.9%, from
$3.7 million in the 2008 quarter to $3.8 million in the 2009
quarter, primarily due to the increase in assets as a result of the
Consolidated Entertainment acquisition. General and administrative
expense decreased by $253,000 or 5.4%, from $4.7 million to $4.4
million in the 2009 quarter. This decrease was primarily related to
lower legal and professional fees and travel expenses, which in
2008 were primarily related to our acquisition of the Consolidated
Entertainment cinema circuit. Interest expense increased by $1.6
million to $4.4 million in the 2009 quarter. This was primarily
related to our discontinuing of capitalizing interest on our
development properties, where development has been substantially
curtailed. The other significant driver that affected the 2009
quarter compared to the 2008 quarter was the reported $300,000
Other expense for the 2009 quarter, compared to $1.7 million "other
income" in the 2008 quarter. The $2.0 million change was primarily
due to a realized loss on marketable securities of $746,000 during
the 2009 quarter and to one-time settlements on our Burstone
litigation and credit card dispute in the 2008 quarter of
approximately $1.2 million. As a result of the above, we reported a
net loss of $3.4 million for the 2009 quarter compared to a net
loss of $226,000 in the 2008 quarter. Our EBITDA(1) at $5.2 million
for the 2009 quarter was $1.7 million lower than the 2008 quarter
of $6.9 million, predominantly driven by better operating margins
(approximately $280,000) offset by lower "other income" as
described above from certain settlements in 2008 (approximately
$1.2 million) and a realized loss on marketable securities in 2009
(approximately $746,000). Our adjusted EBITDA(1) for the 2009
quarter was $5.9 million after excluding: -- $746,000 related to an
mark-to-market expense for our Becker available-for-sale shares.
Our adjusted EBITDA(1) for the 2008 quarter was $5.7 million after
excluding: -- $830,000 of a one time gain on litigation settlement
for our Burstone litigation; and -- $385,000 of a one time gain on
settlement of our credit card dispute with Radiant Balance Sheet
Our total assets at March 31, 2009 were $361.3 million compared to
$371.9 million at December 31, 2008. The currency exchange rates
for Australia and New Zealand as of March 31, 2009 were $0.6926 and
$0.5715, respectively, and as of December 31, 2008, these rates
were $0.6983 and $0.5815, respectively. As a result, currency had a
small negative effect on the balance sheet at March 31, 2009
compared to December 31, 2008. Our cash position at March 31, 2009
was $14.5 million compared to $30.9 million at December 31, 2008,
reflecting the $11.5 million used to effectively repurchase $22.9
million of our Trust Preferred Securities (TRUPS) in the first
quarter of 2009. At the present time we have approximately $3.8
million (AUS$5.5 million) in undrawn funds under our Australian
Corporate Credit Facility. We have undrawn funds of $25.7 million
(NZ$45.0 million) against our line of credit in New Zealand. We are
in the process of renegotiating our New Zealand line of credit with
a view of extending the term on the line. Accordingly, we believe
that we have sufficient borrowing capacity under our Australian
Corporate Credit Facility and our New Zealand line of credit to
meet our anticipated short-term working capital requirements. Our
positive working capital at March 31, 2009 of $12.5 million
compares to a positive working capital of $32.6 million at December
31, 2008, again driven by the TRUPS repurchase. Stockholders'
equity was $64.2 million at March 31, 2009 compared to $69.4
million at December 31, 2008. Subsequent Events TPS Retirement of
Debt In January and February 2009, Reading reacquired approximately
$22.9 million of the Trust Preferred Securities in exchange for
certain marketable securities. On April 30, 2009, Reading
extinguished $22.9 million of these Trust Preferred Securities
which will result in a second quarter gain on extinguishment of
debt of approximately $11.5 million. Place 57 Distribution On April
11, 2009, we received $1.2 million in association with our
investment in the Place 57 joint venture representing a return of
substantially all of our initial investment. Manukau Land Purchase
On April 30, 2009, we entered into an agreement to purchase for
$2.9 million (NZ$5.2 million) a property adjacent to our Manukau
property. The agreement is conditioned upon us getting regulatory
approval and calls for a deposit of $147,000 (NZ$258,000) to be
paid immediately which is returnable to us if we are unable to get
regulatory approval, a second deposit to be made of $440,000
(NZ$773,000) upon regulatory approval, and the remaining balance to
be paid on the settlement date of March 31, 2010. 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: -- the development,
ownership and operation of multiplex cinemas in the United States,
Australia and New Zealand; and -- the development, ownership and
operation of retail and commercial real estate in Australia, New
Zealand and the United States, including entertainment-themed
retail centers ("ETRC") in Australia and New Zealand and live
theater assets in Manhattan and Chicago in the United States.
Reading manages its worldwide cinema business under various
different brands: -- in the United States, under the -- Reading
brand, -- Angelika Film Center brand
(http://angelikafilmcenter.com/), -- Consolidated Theatres brand
(http://www.consolidatedtheatres.com/), and -- City Cinemas brand
(http://citycinemas.moviefone.com/); -- in Australia, under the
Reading brand (http://www.readingcinemas.com.au/); and -- in New
Zealand, under the -- Reading (http://www.readingcinemas.co.nz/),
-- Rialto (http://www.rialto.co.nz/), and -- Berkeley Cinemas
(http://www.berkeleycinemas.co.nz/) brands. 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 view
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: -- With respect to our cinema operations: -- The
number and attractiveness to movie goers of the films released in
future periods; -- The amount of money spent by film distributors
to promote their motion pictures; -- The licensing fees and terms
required by film distributors from motion picture exhibitors in
order to exhibit their films; -- The comparative attractiveness of
motion pictures as a source of entertainment and willingness and/or
ability of consumers (i) to spend their dollars on entertainment
and (ii) to spend their entertainment dollars on movies in an
outside the home environment; and -- The extent to which we
encounter competition from other cinema exhibitors, from other
sources of outside of the home entertainment, and from inside the
home entertainment options, such as "home theaters" and competitive
film product distribution technology such as, by way of example,
cable, satellite broadcast, DVD and VHS rentals and sales, and so
called "movies on demand;" -- With respect to our real estate
development and operation activities: -- The rental rates and
capitalization rates applicable to the markets in which we operate
and the quality of properties that we own; -- The extent to which
we can obtain on a timely basis the various land use approvals and
entitlements needed to develop our properties; -- the risks and
uncertainties associated with real estate development; -- The
availability and cost of labor and materials; -- Competition for
development sites and tenants; and -- The extent to which our
cinemas can continue to serve as an anchor tenant which will, in
turn, be influenced by the same factors as will influence generally
the results of our cinema operations; -- With respect to our
operations generally as an international company involved in both
the development and operation of cinemas and the development and
operation of real estate; and previously engaged for many years in
the railroad business in the United States: -- Our ongoing access
to borrowed funds and capital and the interest that must be paid on
that debt and the returns that must be paid on such capital; -- The
relative values of the currency used in the countries in which we
operate; -- Changes in government regulation, including by way of
example, the costs resulting from the implementation of the
requirements of Sarbanes-Oxley; -- Our labor relations and costs of
labor (including future government requirements with respect to
pension liabilities, disability insurance and health coverage, and
vacations and leave); -- Our exposure from time to time to legal
claims and to uninsurable risks such as those related to our
historic railroad operations, including potential environmental
claims and health related claims relating to alleged exposure to
asbestos or other substances now or in the future recognized as
being possible causes of cancer or other health-related problems;
-- Changes in future effective tax rates and the results of
currently ongoing and future potential audits by taxing authorities
having jurisdiction over our various companies; and -- Changes in
applicable accounting policies and practices. 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, it naturally follows that
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, please
understand that 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. (1) The Company
defines EBITDA as net income (loss) before net interest expense,
income tax benefit, depreciation, and amortization. EBITDA is
presented solely as a supplemental disclosure as we believe it to
be a relevant and useful measure to compare operating results among
our properties and competitors, as well as a measurement tool for
evaluation of operating personnel. EBITDA is not a measure of
financial performance under the promulgations of generally accepted
accounting principles ("GAAP"). EBITDA should not be considered in
isolation from, or as a substitute for, net loss, operating loss or
cash flows from operations determined in accordance with GAAP.
Finally, EBITDA is not calculated in the same manner by all
companies and accordingly, may not be an appropriate measure for
comparing performance amongst different companies. See the
"Supplemental Data" table attached for a reconciliation of EBITDA
to net income (loss). For more information, contact: Andrzej
Matyczynski, Chief Financial Officer Reading International, Inc.
(213) 235 2240 (TABLES FOLLOW) Reading International, Inc. and
Subsidiaries Supplemental Data Reconciliation of EBITDA to Net Loss
(Unaudited) (dollars in thousands, except per share amounts) Three
Months Ended Statements of Operations March 31, 2009 2008 Revenue
$46,120 $38,482 Operating expense Cinema/real estate 36,186 28,575
Depreciation and amortization 3,837 3,657 General and
administrative 4,435 4,688 Operating income 1,662 1,562 Interest
expense, net (4,390) (2,838) Other income (expense) (300) 1,736
Income from discontinued operations 224 74 Income tax expense (351)
(417) Minority interest expense (238) (343) Net loss $(3,393)
$(226) Basic and diluted loss per share $(0.15) $(0.01) EBITDA*
$5,185 $6,911 EBITDA* change $(1,726) * EBITDA presented above is
net loss adjusted for interest expense (net of interest income),
income tax expense, depreciation and amortization expense, and 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: Three Months Ended March 31, 2009 2008 Net loss $(3,393)
$(226) Add: Interest expense, net 4,390 2,838 Add: Income tax
provision 351 417 Add: Depreciation and amortization 3,837 3,657
Add: EBITDA adjustment for discontinued operations -- 225 EBITDA
$5,185 $6,911 Reading International, Inc. and Subsidiaries
Supplemental Data Segment Reporting (Unaudited) (dollars in
thousands) Three months ended March Real Intersegment 31, 2009
Cinema Estate Eliminations Total Revenue $42,773 $5,663 $(2,316)
$46,120 Operating expense 35,738 2,764 (2,316) 36,186 Depreciation
& amortization 2,902 681 -- 3,583 General & administrative
expense 802 181 -- 983 Segment operating income $3,331 $2,037 $--
$5,368 Three months ended March Real Intersegment 31, 2008 Cinema
Estate Eliminations Total Revenue $34,347 $5,524 $(1,389) $38,482
Operating expense 28,116 1,848 (1,389) 28,575 Depreciation &
amortization 2,594 885 -- 3,479 General & administrative
expense 770 247 -- 1,017 Segment operating income $2,867 $2,544 $--
$5,411 Reconciliation to net loss attributable to 2009 2008 Reading
International, Inc. shareholders: Quarter Quarter Total segment
operating income $5,368 $5,411 Non-segment: Depreciation and
amortization expense 254 178 General and administrative expense
3,452 3,671 Operating income 1,662 1,562 Interest expense, net
(4,390) (2,838) Other income (expense) (795) 1,377 Income from
discontinued operation 224 74 Income tax expense (351) (417) Equity
earnings of unconsolidated joint ventures and entities 495 359 Net
income (loss) (3,155) 117 Net loss attributable to the
noncontrolling interest (238) (343) Net loss attributable to
Reading International, Inc. common shareholders $(3,393) $(226)
Reading International, Inc. and Subsidiaries Condensed Consolidated
Statements of Operations (Unaudited) (U.S. dollars in thousands,
except per share amounts) Three Months Ended March 31, 2009 2008
Revenue Cinema $42,773 $34,347 Real estate 3,347 4,135 46,120
38,482 Operating expense Cinema 33,422 26,727 Real estate 2,764
1,848 Depreciation and amortization 3,837 3,657 General and
administrative 4,435 4,688 44,458 36,920 Operating income 1,662
1,562 Interest income 517 237 Interest expense (4,907) (3,075)
Other income (expense) (795) 1,377 Income (loss) before
discontinued operations, income tax expense, and equity earnings of
unconsolidated joint ventures and entities (3,523) 101 Income from
discontinued operations, net of tax 224 74 Income (loss) before
income tax expense and equity earnings of unconsolidated joint
ventures and entities (3,299) 175 Income tax expense (351) (417)
Loss before equity earnings of unconsolidated joint ventures and
entities (3,650) (242) Equity earnings of unconsolidated joint
ventures and entities 495 359 Net income (loss) $(3,155) $117 Net
loss attributable to the noncontrolling interest (238) (343) Net
loss attributable to Reading International, Inc. common
shareholders $(3,393) $(226) Earnings (loss) per common share of
Reading International, Inc. - basic and diluted: Loss from
continued operations $(0.16) $(0.01) Earnings from discontinued
operations 0.01 0.00 Basic and diluted loss per share attributable
to Reading International, Inc. common shareholders $(0.15) $(0.01)
Weighted average number of shares outstanding - basic 22,573,737
22,476,355 Weighted average number of shares outstanding - dilutive
22,573,737 22,476,355 Amounts attributable to Reading
International, Inc. common shareholders Income from continuing
operations, net of tax (3,617) (300) Discontinued operations, net
of tax 224 74 Net loss $(3,393) $(226) Reading International, Inc.
and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited)
(U.S. dollars in thousands) March 31, December 31, 2009 2008 ASSETS
Current Assets: Cash and cash equivalents $14,511 $30,874
Receivables 7,319 7,868 Inventory 645 797 Investment in marketable
securities 2,326 3,100 Restricted cash 1,223 1,656 Assets held for
sale 19,948 20,119 Prepaid and other current assets 3,091 2,324
Total current assets 49,063 66,738 Property held for and under
development 68,169 67,600 Property & equipment, net 151,084
154,959 Investments in unconsolidated joint ventures and entities
11,861 11,643 Investment in Reading International Trust I 1,547
1,547 Investment in Reading International Trust Preferred
Securities (net of $11,363 discount) 11,463 -- Goodwill 34,590
34,964 Intangible assets, net 24,452 25,118 Other assets 9,116
9,301 Total assets $361,345 $371,870 LIABILITIES AND STOCKHOLDERS'
EQUITY Current Liabilities: Accounts payable and accrued
liabilities $12,042 $13,170 Film rent payable 5,399 7,315 Notes
payable - current portion 7,967 1,347 Taxes payable 6,335 6,425
Deferred current revenue 4,646 5,645 Other current liabilities 206
201 Total current liabilities 36,595 34,103 Notes payable -
long-term portion 163,206 172,268 Notes payable to related party -
long-term portion 14,000 14,000 Subordinated debt 51,547 51,547
Noncurrent tax liabilities 6,475 6,347 Deferred non-current revenue
573 554 Other liabilities 24,758 23,604 Total liabilities 297,154
302,423 Commitments and contingencies Stockholders' equity: Class A
Nonvoting Common Stock, par value $0.01, 100,000,000 shares
authorized, 35,564,339 issued and 21,084,582 outstanding at March
31, 2009 and 35,564,339 issued and 20,987,115 outstanding at
December 31, 2008 216 216 Class B Voting Common Stock, par value
$0.01, 20,000,000 shares authorized and 1,495,490 issued and
outstanding at March 31, 2009 and at December 31, 2008 15 15
Nonvoting Preferred Stock, par value $0.01, 12,000 shares
authorized and no outstanding shares -- -- Additional paid-in
capital 134,123 133,906 Accumulated deficit (72,870) (69,477)
Treasury shares (4,306) (4,306) Accumulated other comprehensive
income 4,995 7,276 Total Reading International, Inc. stockholders'
equity 62,173 67,630 Noncontrolling interest 2,018 1,817 Total
stockholders' equity 64,191 69,447 Total liabilities and
stockholders' equity $361,345 $371,870
http://www.newscom.com/cgi-bin/prnh/20030403/LATH058LOGO
http://photoarchive.ap.org/ DATASOURCE: Reading International, Inc.
CONTACT: Andrzej Matyczynski, Chief Financial Officer of Reading
International, Inc., +1-213-235-2240 Web Site:
http://www.readingrdi.com/
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