Reading International(RDIB) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Q4 2024 global total revenue reached $58.6 million, a 29% increase compared to Q4 2023, marking the best fourth quarter since Q4 2019 [9] - Q4 2024 global operating income was$ 1.5 million, up $8.5 million or 122% from a loss of$ 7 million in Q4 2023, representing the first positive operating income since Q4 2019 [9] - Q4 2024 adjusted EBITDA increased over 400% to $6.8 million from a negative$ 2.2 million in Q4 2023, the highest fourth quarter EBITDA since Q4 2019 [9] - For the full year 2024, total revenue was $210.5 million, a 5% decrease from 2023, with a global operating loss of$ 14 million, up 17% from the previous year [14][56] Business Line Data and Key Metrics Changes - Global cinema revenue in Q4 2024 was $54.6 million, a 30% increase from Q4 2023, representing just under 84% of pre-pandemic Q4 2019 levels [9] - Global real estate revenues in Q4 2024 were$ 5.2 million, a 14% increase over Q4 2023, with operating income rising 148% to $1.4 million [12][46] - The U.S. cinema revenue increased by 24% to$ 29.3 million in Q4 2024, the highest since Q4 2019, while the full-year U.S. cinema revenue decreased by 12% to $99.9 million [35][38] Market Data and Key Metrics Changes - Australian cinema revenue increased 37% to$ 21.4 million in Q4 2024, with operating income rising 254% to $1.7 million [41] - New Zealand cinema revenue increased 53% to$ 3.8 million in Q4 2024, with operating income increasing 228% to $504,000 [41] - The occupancy rate of the third-party tenant portfolio in Australia/New Zealand was 96% [12] Company Strategy and Development Direction - The company aims to reduce debt as a top priority for 2025 while planning upgrades for at least four theaters [74] - Management is assessing the global real estate portfolio to identify assets for sale to generate liquidity for debt repayment [16] - The focus remains on curating original series and programming compelling content to engage audiences and boost ticket sales [26] Management Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by the 2023 Hollywood strikes and the impact on the first part of 2024, but expressed optimism for the remainder of 2025 with an exciting film lineup [23] - The company expects the first quarter of 2025 to be disappointing compared to last year due to a softer film slate, but anticipates improvements later in the year [23] - Management highlighted the importance of recalibrating occupancy costs with landlords to reflect current attendance levels [34] Other Important Information - The company sold its Culver City office building for$ 10 million, which will reduce interest expenses [16] - The real estate division's operating income in Q4 2024 was the best since Q3 2019, driven by improved live theater operations and rent revenue [46][49] - The company is working on monetizing additional real estate assets, including properties in Wellington and Cannon Park [50][51] Q&A Session Summary Question: What are your capital allocation priorities for 2025? - The highest priority is to reduce debt while planning upgrades for theaters, subject to box office performance [74] Question: What are the recent underperforming theater closures and expected savings? - One U.S. cinema will close in April 2025, expected to save $500,000 to$ 1 million annually; another small theater in New Zealand closed with expected savings of $100,000 to$ 200,000 [76][77] Question: Is the Australian cinema development project in Noosa still on track? - The project is still in planning phases, with an expected opening pushed to 2027 [80] Question: Why did the company fail to engage with investors in 2024? - Discussions are underway to fulfill commitments for non-deal roadshows in 2025 and participation in a microcap virtual conference [82]