Reading International(RDI) - 2020 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Consolidated revenues for Q1 2020 decreased by 20% to $49.2 million compared to Q1 2019, primarily due to the temporary closure of cinemas and live theatres due to COVID-19 [10][75]. - The company reported a net loss of $5.9 million in Q1 2020, an increase from a net loss of $2.1 million in Q1 2019 [11][77]. - Adjusted EBITDA decreased by $6.4 million to a negative $1.7 million in Q1 2020 compared to the same period in the prior year [80]. - Cash position as of March 31, 2020 was just under $55 million, with total debt at $263 million [11][84]. Business Line Data and Key Metrics Changes - Cinema revenues decreased by 20% to $46.3 million in Q1 2020 compared to Q1 2019, with an operating loss of $2.7 million [21][75]. - The U.S. cinema division saw a 27% revenue decline, reporting $23.3 million in Q1 2020 [24]. - Australian cinema revenues decreased by 9% to $19.6 million, with a 38% decrease in operating income [35]. - New Zealand cinema revenues decreased by 24% to $3.4 million, with a 25% decrease in attendance [44]. Market Data and Key Metrics Changes - The Australian dollar weakened by 7.7% and the New Zealand dollar by 6.8% against the U.S. dollar during Q1 2020 [9][77]. - Despite the challenges, the Australian cinema division set records for food and beverage spend per patron [16]. Company Strategy and Development Direction - The company emphasized a geographically diversified strategy combining cinema and real estate operations to navigate the COVID-19 crisis [15]. - Proactive measures included negotiating rent deferrals and postponing non-essential capital expenditures [22][29]. - The company plans to reopen cinemas with reduced ticket prices to attract customers back [97]. Management's Comments on Operating Environment and Future Outlook - Management acknowledged the significant impact of COVID-19 on operations and expressed confidence in the company's liquidity management practices [12][85]. - The reopening plan includes enhanced health and safety protocols to ensure guest safety [34]. - Management is optimistic about pent-up demand for cinema experiences once major films are released [105]. Other Important Information - The company has drawn down on all credit lines to enhance liquidity and is working with lenders on loan governance structures [83][102]. - The real estate business was less impacted by COVID-19, with some tenants remaining operational [49][60]. Q&A Session Summary Question: What will ticket pricing look like once U.S. assets open? - The company plans to open with reduced ticket prices to generate buzz and attract guests back to theatres, reverting to standard pricing once major titles are released [95][97]. Question: What is the current cash burn rate? - As of March 31, 2020, the company had just under $55 million in cash, with a current cash position of about $41 million [99]. Question: What are the plans for optimizing occupancy under capacity restrictions? - The company will curate film programming and may not open all screens initially, focusing on private screenings and flexible programming to maximize occupancy [104][105].