Reading International(US:RDI)2024-05-15 20:59Financial Performance - Total revenue for Q1 2024 was $45.052 million, a decrease of 1.65% from $45.807 million in Q1 2023[10] - Cinema revenue decreased to $41.271 million in Q1 2024 from $41.987 million in Q1 2023, a decline of 1.7%[10] - Real estate revenue was $3.781 million in Q1 2024, slightly down from $3.820 million in Q1 2023[10] - Net loss attributable to Reading International, Inc. was $13.228 million in Q1 2024, compared to a net loss of $11.111 million in Q1 2023, representing a 19.1% increase in losses[10] - Basic and diluted earnings per share for Q1 2024 were both $(0.59), compared to $(0.50) in Q1 2023[10] - Comprehensive loss for Q1 2024 was $(15.768) million, compared to $(12.403) million in Q1 2023, indicating a worsening in overall financial performance[12] - For the first quarter ended March 31, 2024, the company reported a net loss of $13.2 million, compared to a net loss of $11.1 million for the same period in 2023, resulting in a basic and diluted earnings per share of $(0.59) for both periods[37] Assets and Liabilities - Total assets decreased to $494.860 million as of March 31, 2024, down from $533.051 million as of December 31, 2023[9] - Total liabilities decreased to $477.132 million as of March 31, 2024, compared to $500.055 million as of December 31, 2023[9] - Cash and cash equivalents at the end of Q1 2024 were $7.501 million, down from $12.906 million at the end of Q4 2023[9] - As of March 31, 2024, the company had $41.9 million of debt due within twelve months and cash of $7.5 million, with negative working capital of $114.6 million, indicating liquidity challenges[27] - Total borrowings as of March 31, 2024, were $194,544,000, a decrease from $208,847,000 as of December 31, 2023, representing a decline of 6.8%[67] Debt Management - The company has extended the maturity dates of its Union Square financing facility ($47.1 million) to May 6, 2025, and its NAB facility ($65.2 million) to July 31, 2026, to manage its debt obligations[28] - The Bank of America Credit Facility was amended to extend the maturity date to August 18, 2025, and required a principal paydown of $275,000[68] - The Cinemas 1, 2, 3 Term Loan was extended to October 1, 2024, with an interest rate of 3.50% above monthly SOFR, with a floor of 7.50%[70] - The Union Square Financing loan facility was extended to May 6, 2025, with a variable interest rate of TERM SOFR plus 6.9%[71] Operational Challenges - The company experienced soft cinema revenues and increasing costs due to the COVID-19 pandemic, the 2023 Hollywood strikes, and rising operating costs, which have adversely impacted film revenues[24] - The company is addressing operational challenges by improving automated services, enhancing food and beverage offerings, and expanding alternative content programs[113] - The company plans to reduce fixed costs by closing non-performing cinemas and seeking occupancy relief from landlords due to potential impacts from the Hollywood strikes[114] - The company is optimistic about the cinema business despite challenges from COVID-19, the 2023 Hollywood strikes, and macroeconomic factors impacting profitability[110] Real Estate and Assets - The carrying value of the company's operating property as of March 31, 2024, was $253.8 million, down from $262.4 million at the end of 2023, reflecting ongoing depreciation[39] - The company classified approximately 26.6 acres of industrial land in Williamsport, Pennsylvania, as held for sale, with a current book value of $460,000[47] - The company is exploring monetization of certain real estate assets to support liquidity needs due to upcoming debt maturities[126] Cinema Operations - The company operated 61 cinemas with a total of 491 screens across the U.S., Australia, and New Zealand as of March 31, 2024[136] - The company has converted 110 out of 198 U.S. auditoriums to luxury recliner seating, enhancing customer experience[145] - The latest cinema additions include a new state-of-the-art cinema in Noosa, Queensland, Australia, authorized for lease negotiations[140] - The U.S. cinema circuit achieved 100% licensing for the sale of liquor, beer, and wine in 2023, with plans to expand these offerings in Australia and New Zealand[116] Revenue Trends - Total revenue for the quarter ended March 31, 2024, decreased by $0.8 million to $45.1 million compared to the same period in 2023, primarily due to lower cinema operations and decreased property rent revenue[163] - Cinema exhibition revenue for the quarter was $41.3 million, a decrease of $0.7 million from the prior year, attributed to lower food and beverage revenues and weakened foreign exchange rates[171] - The average ticket price per patron in the U.S. increased by 9.2% to $13.76 in Q1 2024 compared to $12.60 in Q1 2023[131] - Food and Beverage Spend Per Patron in the U.S. was $7.74, a slight increase of 0.3% from $7.72 in the previous year[129] Legal Matters - The company has accrued estimates of probable and estimable losses for legal proceedings, although it does not believe that exposure under applicable environmental laws is material[82][83] - The company is involved in various legal claims, but it does not expect these to have a material adverse effect on its business or financial position[84] - The company is currently involved in legal proceedings and has accrued estimates of probable losses for resolution[196] Stock and Compensation - The total stockholders' equity at March 31, 2024, was $17,728 thousand, down from $32,996 thousand at January 1, 2024, primarily due to a net loss of $(13,403) thousand[86] - For the three months ended March 31, 2024, stock-based compensation expense was recorded at $49,000, significantly higher than $9,000 in the same period of 2023[93] - The total number of Restricted Stock Units (RSUs) granted is 2,233,372, with 988,580 vested and 1,117,041 unvested as of March 31, 2024[95] Future Outlook - The company believes the global cinema industry will improve in the latter half of 2024 and 2025, supported by anticipated releases of major films and an increase in the number of movies from major studios[29] - The company expects to face challenges from reduced consumer demand due to inflationary pressures and the ongoing impact of the COVID-19 pandemic[205] - The company anticipates potential disruptions in film supply and marketing due to the 2023 Hollywood Strikes, affecting future attendance and revenue[206]