Reading International Announces Record First Quarter Revenue
- Revenue was up 23.6% over the 2004 Quarter, to $28.0 million
LOS ANGELES, May 10 /PRNewswire-FirstCall/ -- Reading International, Inc. (AMEX:RDI) announced today a record first quarter revenue of $28.0 million, for
its quarter ended March 31, 2005 coupled with a strong positive EBITDA(1).
(Logo: http://www.newscom.com/cgi-bin/prnh/20030403/LATH058LOGO) First Quarter 2005 Highlights * Revenue at $28.0 million increased 23.6% compared to Q1 2004.
* Strong positive EBITDA at $2.3 million for the quarter and
year-to-date.
* Entered into a purchase and sale agreement for the sale of our
Glendale office building in California, for $21.0 million.
First Quarter 2005 Discussion
Revenue grew by $5.3 million, 23.6% to $28.0 million from $22.6 million in the
2004-quarter, somewhat assisted by currency effects and despite an
industry-wide lackluster quarter in the cinema exhibition aspects of our
operations. Cinema revenues in Australia and New Zealand grew by $3.6 million
compared to last year, with some assistance from currency, but primarily as a
result of our mid/late-year 2004 acquisitions of the "Anderson" and "Movieland"
circuits and the completion and opening, in December 2004, of two new cinemas
with 15 screens in Australia. In the US, cinema revenue grew by $1.2 million
due to increased admissions resulting from renewed access to film from
distributors with whom we have reached settlements, relative to our anti-trust
cases against them. Also in the US, real estate income was strong for the
quarter, up $477,000 from last year, primarily from our live theater rentals.
We maintained our strong EBITDA(1), which at $2.3 million was only $0.3 million
or 12.8% lower than last year's quarter. This year's quarter was negatively
affected primarily by higher than prior year legal expenses predominantly due
to the not yet fully settled anti-trust litigation in the US.
As a percent of revenue, operating expense was better from year-to-year, at
79.1% in the 2005 quarter compared to 80.0% in the 2004 quarter. Increased
rental revenue from our real estate holdings, especially our live theater
properties, due to higher occupancy factors and renegotiated rent levels,
without a corresponding increase in expense, was a contributing factor.
Depreciation and amortization was up by $392,000 or 13.6% from $2.9 million to
$3.3 million for the 2005 quarter. This increase reflects the 2004
acquisitions of the "Anderson" and "Movieland" circuits.
General and administrative expense grew $432,000 or 12.3%, from $3.5 million to
$3.9 million in the 2005 quarter. This increase was primarily due to higher
legal bills for our continuing anti-trust litigation in the US.
The other significant drivers that affected the 2005 quarter compared to the
2004 quarter were: * in the 2005 quarter, $384,000 of increased interest expense, driven by
higher borrowings and interest rates; and
* in the 2004 quarter, a gain of $719,000 on realized currency
translations not repeated in the 2005 quarter.
As a result of the above, we reported a $2.4 million net loss for the 2005
quarter compared to a $1.4 million loss in the 2004 quarter. Our EBITDA(1) at
$2.3 million for the 2005 quarter, compared to $2.7 million for the 2004
quarter, although lower than prior year quarter was, in our view, a positive
result given the quality of film available during the first quarter and
operating results generally in the cinema industry.
In January 2005, we entered into a purchase and sale agreement providing for
the sale of our Glendale office building in Glendale, California for $21.0
million. Our Glendale property is currently subject to a first mortgage in the
amount of approximately $10.1 million. It is currently our intention to
complete a "1031 exchange" of the Glendale property for the fee and ground
lease comprising the Cinemas 1, 2 & 3 property. In accordance with generally
accepted accounting practices we have disclosed all data relating to the
Glendale property as a discontinued operation and an asset held for sale.
Balance Sheet Total assets at March 31, 2005 were $231.9 million compared to $230.2 million
at December 31, 2004. The currency exchange rates for Australia and New
Zealand as of March 31, 2005 were $0.7729 and $0.7126, respectively, and as of
December 31, 2004, these rates were $0.7709 and $0.7125, respectively. As a
result, currency had only a slight positive effect on the balance sheet at
March 31, 2005 compared to December 31, 2004.
Cash and cash equivalents were down approximately $5.3 million at $7.0 million
compared to $12.3 million at December 31, 2004. The decrease in cash was
primarily driven by: * $5.7 million related to the on-going construction work on our
Newmarket development; * $300,000 related to the purchase of property and equipment in the
U.S. and New Zealand; * $963,000 attributed to our additional investment in the
205-209 East 57th Street Associates, LLC, the company developing
Place 57, the site of our former Sutton Cinema; * $3.4 million additional deposit made to acquire the Cinemas 1, 2, 3
property in New York City; and * $3.0 million reduction in accounts payable related to the accelerated
payoff of Australian payables in preparation for the implementation of
a new accounting system for our world-wide operation, coupled with a
seasonal reduction of film payable; offset by * $7.8 million of new borrowings.
In addition, we have sufficient borrowing capacity under our new corporate
facility from our Australian bank, to recoup substantially all of the working
capital that we have invested in our 2004 Australian acquisition, if we so
choose. At the present time we have approximately $15.0 million in undrawn
funds under our Australian Corporate Credit Facility.
As a result of the above, our negative working capital has reduced to $5.8
million compared to $8.1 million at December 31, 2004. Negative working
capital is typical in the cinema industry, due to the lag time between the
collection of box office and concession receipts and the payment of film
distributors and vendors.
The resulting stockholders' equity was $100.3 million at March 31, 2004
compared to $102.0 at December 31, 2004.
About Reading International, Inc.
Reading International 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, New Zealand and Puerto Rico; 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/), and
* City Cinemas brand (http://citycinemas.moviefone.com/); * in Australia, under the Reading brand
(http://www.readingcinemas.com.au/); * in New Zealand, under the
* Reading (http://www.readingcinemas.co.nz/) and
* Berkeley Cinemas (http://www.berkeleycinemas.co.nz/) brands; and * in Puerto Rico, under the CineVista brand.
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 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 management
believes it to be a relevant and useful measure to compare operating
results among its 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 Reading International, Inc. and Subsidiaries
Supplemental Data
Reconciliation of EBITDA to Net Loss (Unaudited)
(dollars in thousands, except per share amounts) Statements of Operations Three Months Ended
March 31,
2005 2004 Revenue $28,001 $22,647
Operating expense
Cinema/live theater/real estate 22,155 18,113
Depreciation and amortization 3,283 2,891
General and administrative 3,941 3,509 Operating loss (1,378) (1,866) Interest expense, net (866) (482)
Other (income) expense (271) 666
Minority interest (expense) income (137) 15
Income from discontinued operations 78 90
Income tax expense (233) (301)
Equity earnings of unconsolidated investments 404 525 Net loss $(2,403) $(1,353) Basic and diluted loss per share $(0.11) $(0.06) EBITDA* 2,338 2,682 EBITDA change (344) * 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,
2005 2004 Net loss $(2,403) $(1,353)
Add: Interest expense, net 866 482
Add: Income tax expense 233 301
Add: Depreciation and amortization 3,283 2,891
Add: Adjustment for discontinued operations 359 361 EBITDA $2,338 $2,682 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,
2005 2004
Revenue
Cinema $24,393 $19,676
Real estate 3,608 2,971
28,001 22,647
Operating expense
Cinema 20,547 16,559
Real estate 1,608 1,554
Depreciation and amortization 3,283 2,891
General and administrative 3,941 3,509
29,379 24,513 Operating loss (1,378) (1,866) Non-operating income (expense)
Interest income 73 336
Interest expense (939) (818)
Other (expense) income (271) 666
(1,137) 184 Loss before minority interest,
income from discontinued operations,
income tax expense, and equity earnings
of unconsolidated investments (2,515) (1,682)
Minority interest 137 (15) Loss from continuing operations (2,652) (1,667)
Income from discontinued operations 78 90 Loss before income tax expense and equity
earnings of unconsolidated investments (2,574) (1,577)
Income tax expense 233 301 Loss before equity earnings of
unconsolidated investments (2,807) (1,878)
Equity earnings of unconsolidated investments 404 525 Net loss $(2,403) $(1,353) Basic loss per share $(0.11) $(0.06)
Weighted average number of shares
outstanding - basic 22,006,839 21,899,290 Diluted loss per share $(0.11) $(0.06)
Weighted average number of shares
outstanding - diluted 22,006,839 21,899,290 Reading International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets as of
March 31, 2005 and December 31, 2004
(U.S. dollars in thousands) March 31, December 31,
2005 2004
ASSETS
Current Assets:
Cash and cash equivalents $6,985 $12,292
Receivables 6,104 7,246
Inventory 581 804
Investment in marketable securities, at cost 29 29
Restricted cash 471 815
Assets held for sale 8,539 8,590
Prepaid and other current assets 7,499 2,367
Total current assets 30,208 32,143
Property & equipment, net 136,774 133,660
Property held for development 27,417 27,346
Investment in unconsolidated joint ventures 8,565 7,352
Capitalized leasing costs 18 20
Goodwill 13,827 13,816
Intangible assets, net 11,652 11,957
Other assets 3,393 3,933
Total assets $231,854 $230,227 LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities $10,191 $13,272
Film rent payable 3,593 4,144
Notes payable - current portion 416 401
Income taxes payable 7,244 7,091
Deferred current revenue 2,079 2,227
Liabilities related to assets held for sale 12,339 12,533
Other current liabilities 113 599
Total current liabilities 35,975 40,267
Notes payable - long-term portion 80,398 72,664
Deferred non-current revenue 531 522
Other non-current liabilities 11,044 11,294
Total liabilities 127,948 124,747
Commitments and contingencies
Minority interest in consolidated subsidiaries 3,605 3,470
Stockholders equity:
Class A Nonvoting Common Stock,
par value $0.01, 100,000,000 shares authorized,
34,464,167 issued and 20,472,733 outstanding
at March 31, 2005 and 34,444,167 issued and
20,452,733 outstanding at December 31, 2004 205 205
Class B Voting Common stock, par value $0.01,
20,000,000 shares authorized, 2,198,761 issued
and 1,545,506 outstanding at March 31, 2005 and
December 31, 2004 15 15
Nonvoting Preferred Stock,
par value $0.01, 12,000 shares authorized -- --
Additional paid-in capital 124,495 124,307
Accumulated deficit (57,306) (54,903)
Accumulated other comprehensive income 32,892 32,386
Total stockholders equity 100,301 102,010
Total liabilities and
stockholders equity $231,854 $230,227
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.readingcinemas.com.au/
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