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rdi-20230930x10q

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: September 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 November 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	44
Item 4 – Controls and Procedures	46
PART II – Other Information	47
Item 1 – Legal Proceedings	47
Item 1A – Risk Factors	47
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds	47
Item 3 – Defaults Upon Senior Securities	47
Item 4 – Mine Safety Disclosure	47
Item 5 – Other Information	47
Item 6 – Exhibits	48
SIGNATURES	49
Certifications

‎

PART 1 – FINANCIAL INFORMATION

Item 1 - Financial Statements

READING INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEETS

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



	September 30,		December 31,
	2023		2022
ASSETS	(unaudited)
Current Assets:
Cash and cash equivalents	$	11,925	$	29,947
Restricted cash		5,714		5,032
Receivables		5,779		6,206
Inventories		1,488		1,616
Derivative financial instruments - current portion		17		907
Prepaid and other current assets		4,243		3,804
Land and property held for sale		12,362		—
Total current assets		41,528		47,512
Operating property, net		261,614		286,952
Operating lease right-of-use assets		180,718		200,417
Investment and development property, net		8,336		8,792
Investment in unconsolidated joint ventures		4,488		4,756
Goodwill		24,597		25,504
Intangible assets, net		2,110		2,391
Deferred tax asset, net		489		447
Other assets		8,717		10,284
Total assets	$	532,597	$	587,055
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities	$	41,896	$	42,590
Film rent payable		3,462		5,678
Debt - current portion		40,402		37,279
Subordinated debt - current portion		776		747
Taxes payable - current		2,390		300
Deferred revenue		8,616		10,286
Operating lease liabilities - current portion		22,977		23,971
Other current liabilities		6,673		813
Total current liabilities		127,192		121,664
Debt - long-term portion		138,560		148,688
Subordinated debt, net		27,117		26,950
Noncurrent tax liabilities		5,842		7,117
Operating lease liabilities - non-current portion		180,002		200,037
Other liabilities		11,829		19,320
Total liabilities	$	490,542	$	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 September 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 September 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 September 30, 2023 and December 31, 2022		—		—
Additional paid-in capital		154,903		153,784
Retained earnings/(deficits)		(67,104)		(48,816)
Treasury shares		(40,407)		(40,407)
Accumulated other comprehensive income		(5,647)		(1,957)
Total Reading International, Inc. stockholders’ equity		41,998		62,856
Noncontrolling interests		57		423
Total stockholders’ equity		42,055		63,279
Total liabilities and stockholders’ equity	$	532,597	$	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				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Revenue
Cinema	$	62,688	$	48,359	$	165,731	$	147,476
Real estate		3,875		2,837		11,694		8,432
Total revenue		66,563		51,196		177,425		155,908
Costs and expenses
Cinema		(53,278)		(45,308)		(146,297)		(134,579)
Real estate		(2,281)		(2,352)		(6,600)		(6,715)
Depreciation and amortization		(4,580)		(5,010)		(13,908)		(15,781)
Impairment expense		—		—		—		(1,549)
General and administrative		(5,405)		(5,257)		(15,693)		(17,364)
Total costs and expenses		(65,544)		(57,927)		(182,498)		(175,988)
Operating income (loss)		1,019		(6,731)		(5,073)		(20,080)
Interest expense, net		(5,072)		(3,693)		(14,063)		(10,242)
Gain (loss) on sale of assets		—		(59)		—		(59)
Other income (expense)		267		5,455		356		8,445
Income (loss) before income tax expense and equity earnings of unconsolidated joint ventures		(3,786)		(5,028)		(18,780)		(21,936)
Equity earnings of unconsolidated joint ventures		217		61		443		233
Income (loss) before income taxes		(3,569)		(4,967)		(18,337)		(21,703)
Income tax benefit (expense)		(896)		(332)		(313)		(1,492)
Net income (loss)	$	(4,465)	$	(5,299)	$	(18,650)	$	(23,195)
Less: net income (loss) attributable to noncontrolling interests		(65)		(122)		(361)		(228)
Net income (loss) attributable to Reading International, Inc.	$	(4,400)	$	(5,177)	$	(18,289)	$	(22,967)
Basic earnings (loss) per share	$	(0.20)	$	(0.23)	$	(0.82)	$	(1.04)
Diluted earnings (loss) per share	$	(0.20)	$	(0.23)	$	(0.82)	$	(1.04)
Weighted average number of shares outstanding–basic		22,273,423		22,043,823		22,208,757		22,011,755
Weighted average number of shares outstanding–diluted		22,273,423		22,043,823		22,208,757		22,011,755

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				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Net income (loss)	$	(4,465)	$	(5,299)	$	(18,650)	$	(23,195)
Foreign currency translation gain (loss)		(1,686)		(8,279)		(3,038)		(15,268)
Gain (loss) on cash flow hedges		(26)		60		(813)		1,253
Other		52		49		156		154
Comprehensive income (loss)		(6,125)		(13,469)		(22,345)		(37,056)
Less: net income (loss) attributable to noncontrolling interests		(65)		(122)		(361)		(228)
Less: comprehensive income (loss) attributable to noncontrolling interests		(3)		(3)		(5)		(1)
Comprehensive income (loss)	$	(6,057)		(13,344)	$	(21,979)	$	(36,827)

See accompanying Notes to the Unaudited Consolidated Financial Statements.

‎

READING INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; U.S. dollars in thousands)



	Nine Months Ended
	September 30,
	2023		2022
Operating Activities
Net income (loss)	$	(18,650)	$	(23,195)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Equity earnings of unconsolidated joint ventures		(443)		(233)
Distributions of earnings from unconsolidated joint ventures		468		283
(Gain) loss recognized on foreign currency transactions		—