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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________________________

FORM 10-Q

(Mark One)


þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2023


¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission file number 1-8625

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READING INTERNATIONAL, INC.

(Exact name of Registrant as specified in its charter)

Nevada

State or other jurisdiction of incorporation or organization)

95-3885184

(IRS Employer Identification Number)

189 Second Avenue, Suite 2S

New York, New York

(Address of principal executive offices)

10003

(Zip Code)

Registrant’s telephone number, including area code: (213) 235-2240

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Class A Nonvoting Common Stock, $0.01 par value	RDI	The Nasdaq Stock Market LLC
Class B Voting Common Stock, $0.01 par value	RDIB	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ¨ Accelerated Filer ¨ Non-Accelerated Filer þ Smaller Reporting Company þ Emerging Growth Company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of August 13, 2023, there were 20,592,834 shares of Class A Nonvoting Common Stock, $0.01 par value per share and 1,680,590 shares of Class B Voting Common Stock, $0.01 par value per share outstanding.
‎

READING INTERNATIONAL, INC. AND SUBSIDIARIES

TABLE OF CONTENTS


	Page
PART I - Financial Information	3
Item 1 – Financial Statements	3
Consolidated Balance Sheets (Unaudited)	3
Consolidated Statements of Income (Unaudited)	4
Consolidated Statements of Comprehensive Income (Unaudited)	5
Consolidated Statements of Cash Flows (Unaudited)	6
Notes to Consolidated Financial Statements (Unaudited)	7
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3 – Quantitative and Qualitative Disclosure about Market Risk	43
Item 4 – Controls and Procedures	45
PART II – Other Information	46
Item 1 – Legal Proceedings	46
Item 1A – Risk Factors	46
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds	46
Item 3 – Defaults Upon Senior Securities	46
Item 4 – Mine Safety Disclosure	46
Item 5 – Other Information	46
Item 6 – Exhibits	47
SIGNATURES	48
Certifications

‎

PART 1 – FINANCIAL INFORMATION

Item 1 - Financial Statements

READING INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands, except share information)



	June 30,		December 31,
	2023		2022
ASSETS	(unaudited)
Current Assets:
Cash and cash equivalents	$	15,511	$	29,947
Restricted cash		6,330		5,032
Receivables		5,447		6,206
Inventories		1,522		1,616
Derivative financial instruments - current portion		64		907
Prepaid and other current assets		5,725		3,804
Land and property held for sale		11,656		—
Total current assets		46,255		47,512
Operating property, net		267,558		286,952
Operating lease right-of-use assets		189,008		200,417
Investment and development property, net		8,502		8,792
Investment in unconsolidated joint ventures		4,538		4,756
Goodwill		25,048		25,504
Intangible assets, net		2,197		2,391
Deferred tax asset, net		456		447
Other assets		8,680		10,284
Total assets	$	552,242	$	587,055
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities	$	39,435	$	42,590
Film rent payable		5,609		5,678
Debt - current portion		47,259		37,279
Subordinated debt - current portion		766		747
Taxes payable - current		1,797		300
Deferred revenue		8,766		10,286
Operating lease liabilities - current portion		23,732		23,971
Other current liabilities		839		813
Total current liabilities		128,203		121,664
Debt - long-term portion		136,993		148,688
Subordinated debt, net		27,061		26,950
Noncurrent tax liabilities		5,776		7,117
Operating lease liabilities - non-current portion		188,016		200,037
Other liabilities		18,627		19,320
Total liabilities	$	504,676	$	523,776
Commitments and contingencies (Note 15)
Stockholders’ equity:
Class A non-voting common shares, par value $0.01, 100,000,000 shares authorized,
33,528,994 issued and 20,592,834 outstanding at June 30, 2023 and
33,348,295 issued and 20,412,185 outstanding at December 31, 2022		236		235
Class B voting common shares, par value $0.01, 20,000,000 shares authorized and
1,680,590 issued and outstanding at June 30, 2023 and December 31, 2022		17		17
Nonvoting preferred shares, par value $0.01, 12,000 shares authorized and no issued
or outstanding shares at June 30, 2023 and December 31, 2022		—		—
Additional paid-in capital		154,290		153,784
Retained earnings/(deficits)		(62,705)		(48,816)
Treasury shares		(40,407)		(40,407)
Accumulated other comprehensive income		(3,990)		(1,957)
Total Reading International, Inc. stockholders’ equity		47,441		62,856
Noncontrolling interests		125		423
Total stockholders’ equity		47,566		63,279
Total liabilities and stockholders’ equity	$	552,242	$	587,055

See accompanying Notes to the Unaudited Consolidated Financial Statements.

READING INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited; U.S. dollars in thousands, except per share data)



	Quarter Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Revenue
Cinema	$	61,056	$	61,770	$	103,042	$	99,117
Real estate		3,999		2,741		7,819		5,595
Total revenue		65,055		64,511		110,861		104,712
Costs and expenses
Cinema		(51,364)		(50,769)		(93,019)		(89,271)
Real estate		(2,104)		(2,206)		(4,319)		(4,363)
Depreciation and amortization		(4,689)		(5,247)		(9,329)		(10,771)
Impairment expense		—		(1,549)		—		(1,549)
General and administrative		(5,109)		(6,312)		(10,288)		(12,107)
Total costs and expenses		(63,266)		(66,083)		(116,955)		(118,061)
Operating income (loss)		1,789		(1,572)		(6,094)		(13,349)
Interest expense, net		(4,874)		(3,343)		(8,991)		(6,548)
Other income (expense)		(86)		3,773		91		2,990
Income (loss) before income tax expense and equity earnings of unconsolidated joint ventures		(3,171)		(1,142)		(14,994)		(16,907)
Equity earnings of unconsolidated joint ventures		207		237		226		172
Income (loss) before income taxes		(2,964)		(905)		(14,768)		(16,735)
Income tax benefit (expense)		103		(1,538)		583		(1,160)
Net income (loss)	$	(2,861)	$	(2,443)	$	(14,185)	$	(17,895)
Less: net income (loss) attributable to noncontrolling interests		(83)		(7)		(296)		(105)
Net income (loss) attributable to Reading International, Inc.	$	(2,778)	$	(2,436)	$	(13,889)	$	(17,790)
Basic earnings (loss) per share	$	(0.12)	$	(0.11)	$	(0.63)	$	(0.81)
Diluted earnings (loss) per share	$	(0.12)	$	(0.11)	$	(0.63)	$	(0.81)
Weighted average number of shares outstanding–basic		22,262,214		22,040,512		22,183,618		21,995,186
Weighted average number of shares outstanding–diluted		23,502,506		22,952,960		23,423,910		22,907,634

See accompanying Notes to the Unaudited Consolidated Financial Statements.

READING INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited; U.S. dollars in thousands)



	Quarter Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Net income (loss)	$	(2,861)	$	(2,443)	$	(14,185)	$	(17,895)
Foreign currency translation gain (loss)		(589)		(9,668)		(1,352)		(6,989)
Gain (loss) on cash flow hedges		(205)		395		(788)		1,194
Other		53		54		107		101
Comprehensive income (loss)		(3,602)		(11,662)		(16,218)		(23,589)
Less: net income (loss) attributable to noncontrolling interests		(83)		(7)		(296)		(105)
Less: comprehensive income (loss) attributable to noncontrolling interests		(1)		1		(2)		1
Comprehensive income (loss)	$	(3,518)		(11,656)	$	(15,920)	$	(23,485)

See accompanying Notes to the Unaudited Consolidated Financial Statements.

‎

READING INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; U.S. dollars in thousands)



	Six Months Ended
	June 30,
	2023		2022
Operating Activities
Net income (loss)	$	(14,185)	$	(17,895)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Equity earnings of unconsolidated joint ventures		(226)		(172)
Distributions of earnings from unconsolidated joint ventures		338		288
(Gain) loss recognized on foreign currency transactions		—		(2,312)
Loss provision on impairment of asset		—		1,549
Amortization of operating leases		9,290		11,713
Amortization of finance leases		15		23
Change in operating lease liabilities		(10,059)		(11,688)
Change in net deferred tax assets