þ
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
¨
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
NEVADA
(State
or other jurisdiction of incorporation or organization)
|
95-3885184
(IRS
Employer Identification No.)
|
500
Citadel Drive, Suite 300
Commerce
CA
(Address
of principal executive offices)
|
90040
(Zip
Code)
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June
30, 2006
|
December
31, 2005
|
||||||
ASSETS
|
|||||||
Current
Assets:
|
|||||||
Cash
and cash equivalents
|
$
|
6,115
|
$
|
8,548
|
|||
Receivables
|
4,682
|
5,272
|
|||||
Inventory
|
422
|
468
|
|||||
Investment
in marketable securities
|
628
|
401
|
|||||
Prepaid
and other current assets
|
2,119
|
996
|
|||||
Total
current assets
|
13,966
|
15,685
|
|||||
Property
held for development
|
6,965
|
6,889
|
|||||
Property
under development
|
24,347
|
23,069
|
|||||
Property
& equipment, net
|
164,709
|
167,389
|
|||||
Investment
in unconsolidated entities
|
16,406
|
14,025
|
|||||
Capitalized
leasing costs
|
12
|
15
|
|||||
Goodwill
|
17,216
|
14,653
|
|||||
Intangible
assets, net
|
8,333
|
8,788
|
|||||
Other
assets
|
2,085
|
2,544
|
|||||
Total
assets
|
$
|
254,039
|
$
|
253,057
|
|||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
Current
Liabilities:
|
|||||||
Accounts
payable and accrued liabilities
|
$
|
12,031
|
$
|
13,538
|
|||
Film
rent payable
|
4,307
|
4,580
|
|||||
Notes
payable - current portion
|
2,302
|
1,776
|
|||||
Income
taxes payable
|
7,941
|
7,504
|
|||||
Deferred
current revenue
|
1,679
|
2,319
|
|||||
Other
current liabilities
|
193
|
250
|
|||||
Total
current liabilities
|
28,453
|
29,967
|
|||||
Notes
payable - long-term portion
|
96,955
|
93,544
|
|||||
Notes
payable to related parties
|
14,000
|
14,000
|
|||||
Deferred
non-current revenue
|
542
|
554
|
|||||
Other
liabilities
|
17,847
|
12,509
|
|||||
Total
liabilities
|
157,797
|
150,574
|
|||||
Commitments
and contingencies
|
--
|
--
|
|||||
Minority
interest in consolidated affiliates
|
1,860
|
3,079
|
|||||
Stockholders’
equity:
|
|||||||
Class
A Nonvoting Common Stock, par value $0.01, 100,000,000 shares authorized,
35,495,729 issued and 20,918,505 outstanding at June 30, 2006 and
35,468,733 issued and 20,990,458 outstanding at December 31,
2005
|
215
|
215
|
|||||
Class
B Voting Common Stock, par value $0.01, 20,000,000 shares authorized
and
1,495,490 issued and outstanding at June 30, 2006 and December 31,
2005
|
15
|
15
|
|||||
Nonvoting
Preferred Stock, par value $0.01, 12,000 shares authorized and no
outstanding shares
|
--
|
--
|
|||||
Additional
paid-in capital
|
128,160
|
128,028
|
|||||
Accumulated
deficit
|
(57,294
|
)
|
(53,914
|
)
|
|||
Treasury
shares
|
(4,307
|
)
|
(3,515
|
)
|
|||
Accumulated
other comprehensive income
|
27,593
|
28,575
|
|||||
Total
stockholders’ equity
|
94,382
|
99,404
|
|||||
Total
liabilities and stockholders’ equity
|
$
|
254,039
|
$
|
253,057
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Revenue
|
|||||||||||||
Cinema
|
$
|
23,954
|
$
|
20,983
|
$
|
46,463
|
$
|
42,899
|
|||||
Real
estate
|
4,007
|
3,870
|
7,435
|
7,478
|
|||||||||
27,961
|
24,853
|
53,898
|
50,377
|
||||||||||
Operating
expense
|
|||||||||||||
Cinema
|
19,187
|
17,642
|
37,064
|
35,235
|
|||||||||
Real
estate
|
1,756
|
2,055
|
3,468
|
3,664
|
|||||||||
Depreciation
and amortization
|
3,337
|
3,003
|
6,577
|
6,166
|
|||||||||
General
and administrative
|
3,076
|
4,132
|
6,441
|
7,879
|
|||||||||
27,356
|
26,832
|
53,550
|
52,944
|
||||||||||
Operating
income (loss)
|
605
|
(1,979
|
)
|
348
|
(2,567
|
)
|
|||||||
Non-operating
income (expense)
|
|||||||||||||
Interest
income
|
26
|
36
|
87
|
109
|
|||||||||
Interest
expense
|
(1,537
|
)
|
(744
|
)
|
(3,382
|
)
|
(1,683
|
)
|
|||||
Other
income (loss)
|
1
|
559
|
(1,154
|
)
|
289
|
||||||||
Loss
before minority interest expense, discontinued operations, income
tax
expense, and equity earnings of unconsolidated entities
|
(905
|
)
|
(2,128
|
)
|
(4,101
|
)
|
(3,852
|
)
|
|||||
Minority
interest expense
|
192
|
281
|
272
|
419
|
|||||||||
Loss
from continuing operations
|
(1,097
|
)
|
(2,409
|
)
|
(4,373
|
)
|
(4,271
|
)
|
|||||
Discontinued
operations:
|
|||||||||||||
Gain
on disposal of business operations
|
--
|
13,610
|
--
|
13,610
|
|||||||||
Loss
from discontinued operations
|
--
|
(667
|
)
|
--
|
(1,379
|
)
|
|||||||
Income
(loss) before income tax expense and equity earnings of unconsolidated
entities
|
(1,097
|
)
|
10,534
|
(4,373
|
)
|
7,960
|
|||||||
Income
tax expense
|
344
|
220
|
681
|
453
|
|||||||||
Income
(loss) before equity earnings of unconsolidated
entities
|
(1,441
|
)
|
10,314
|
(5,054
|
)
|
7,507
|
|||||||
Equity
earnings of unconsolidated entities
|
1,207
|
186
|
1,674
|
590
|
|||||||||
Net
income (loss)
|
$
|
(234
|
)
|
$
|
10,500
|
$
|
(3,380
|
)
|
$
|
8,097
|
|||
Earnings
(loss) per common share - basic:
|
|||||||||||||
Loss
from continuing operations
|
$
|
(0.01
|
)
|
$
|
(0.11
|
)
|
$
|
(0.15
|
)
|
$
|
(0.19
|
)
|
|
Income
(loss) from discontinued operations, net
|
0.00
|
0.59
|
0.00
|
0.56
|
|||||||||
Basic
earnings (loss) per share
|
$
|
(0.01
|
)
|
$
|
0.48
|
$
|
(0.15
|
)
|
$
|
0.37
|
|||
Weighted
average number of shares outstanding - basic
|
22,413,995
|
21,988,031
|
22,431,834
|
21,988,031
|
|||||||||
Earnings
(loss) per common share - diluted:
|
|||||||||||||
Loss
from continuing operations
|
$
|
(0.01
|
)
|
$
|
(0.11
|
)
|
$
|
(0.15
|
)
|
$
|
(0.19
|
)
|
|
Income
(loss) from discontinued operations, net
|
0.00
|
0.59
|
0.00
|
0.56
|
|||||||||
Diluted
earnings (loss) per share
|
$
|
(0.01
|
)
|
$
|
0.48
|
$
|
(0.15
|
)
|
$
|
0.37
|
|||
Weighted
average number of shares outstanding - diluted
|
22,413,995
|
21,988,031
|
22,431,834
|
21,988,031
|
Six
Months Ended
June
30,
|
|||||||
2006
|
2005
|
||||||
Operating
Activities
|
|||||||
Net
income (loss)
|
$
|
(3,380
|
)
|
$
|
8,097
|
||
Adjustments
to reconcile net (loss) income to net cash provided by (used in)
operating
activities:
|
|||||||
Loss
(gain) recognized on foreign currency transactions
|
6
|
(289
|
)
|
||||
Equity
earnings of unconsolidated entities
|
(1,674
|
)
|
(590
|
)
|
|||
Distributions
of earnings from unconsolidated entities
|
483
|
470
|
|||||
Gain
on sale of Puerto Rico Cinema Circuit
|
--
|
(1,597
|
)
|
||||
Gain
on sale of Glendale Office Building
|
--
|
(12,013
|
)
|
||||
(Gain)
loss on disposal of other assets
|
(3
|
)
|
3
|
||||
Depreciation
and amortization
|
6,577
|
6,166
|
|||||
Stock
based compensation expense
|
45
|
--
|
|||||
Minority
interest
|
272
|
419
|
|||||
Changes
in operating assets and liabilities:
|
|||||||
Decrease
in receivables
|
1,062
|
1,760
|
|||||
Increase
in prepaid and other assets
|
(780
|
)
|
(740
|
)
|
|||
Decrease
in accounts payable and accrued expenses
|
(1,134
|
)
|
(1,746
|
)
|
|||
Increase
(decrease) in film rent payable
|
(220
|
)
|
389
|
||||
Increase
(decrease) in deferred revenues and other liabilities
|
450
|
(1,226
|
)
|
||||
Net
cash provided by (used in) operating activities
|
1,704
|
(897
|
)
|
||||
Investing
activities
|
|||||||
Proceeds
from the sale of Puerto Rico Circuit
|
--
|
2,335
|
|||||
Proceeds
from the sale of Glendale Office Building
|
--
|
10,300
|
|||||
Acquisitions
|
(3,689
|
)
|
(12,159
|
)
|
|||
Purchase
of property and equipment
|
(4,645
|
)
|
(14,364
|
)
|
|||
Investments
in unconsolidated entities
|
(1,800
|
)
|
(963
|
)
|
|||
Change
in restricted cash
|
193
|
833
|
|||||
Purchase
of marketable securities
|
(219
|
)
|
--
|
||||
Net
cash used in investing activities
|
(10,160
|
)
|
(14,018
|
)
|
|||
Financing
activities
|
|||||||
Repayment
of long-term borrowings
|
(2,907
|
)
|
(182
|
)
|
|||
Proceeds
from borrowings
|
8,038
|
15,302
|
|||||
Option
deposit received
|
3,000
|
--
|
|||||
Proceeds
from exercise of stock options
|
87
|
43
|
|||||
Repurchase
of Class A Nonvoting Common Stock
|
(792
|
)
|
--
|
||||
Minority
interest distributions
|
(1,489
|
)
|
(217
|
)
|
|||
Net
cash provided by financing activities
|
5,937
|
14,946
|
|||||
Effect
of exchange rate changes on cash and cash
equivalents
|
86
|
(229
|
)
|
||||
Decrease
in cash and cash equivalents
|
(2,433
|
)
|
(198
|
)
|
|||
Cash
and cash equivalents at beginning of period
|
8,548
|
12,292
|
|||||
Cash
and cash equivalents at end of period
|
$
|
6,115
|
$
|
12,094
|
|||
Supplemental
Disclosures
|
|||||||
Interest
paid
|
$
|
4,021
|
$
|
2,498
|
|||
Income
taxes paid
|
$
|
166
|
$
|
150
|
|||
Non-cash
transactions
|
|||||||
Common
stock issued for note receivable (Note 2)
|
$
|
--
|
$
|
55
|
|||
Increase
in cost basis of Cinemas 1, 2, & 3 related to the purchase price
adjustment of the call option liability to related party
|
$
|
1,087
|
--
|
||||
Buyer
assumption of note payable on Glendale Office Building
|
$
|
--
|
$
|
10,103
|
·
|
the
development, ownership and operation of multiplex cinemas in the
United
States, Australia, and New Zealand
and
|
·
|
the
development, ownership and operation of retail and commercial real
estate
in Australia, New Zealand and the United States, including
entertainment-themed retail centers (“ETRC”) in Australia and New Zealand
and live theatre assets in Manhattan and Chicago in the United
States.
|
2005
|
|
Stock
option exercise price
|
$
8.10
|
Risk-free
interest rate
|
4.22%
|
Expected
dividend yield
|
--
|
Expected
option life
|
5.97
yrs
|
Expected
volatility
|
34.70%
|
Weighted
average fair value
|
$
4.33
|
Common
Stock Options Outstanding
|
Weighted
Average
Price
of Options Outstanding
|
Common
Stock Exercisable
Options
|
Weighted
Average
Price
of Exercisable
Options
|
||||||||||||||||||||||
Class
A
|
Class
B
|
Class
A
|
Class
B
|
Class
A
|
Class
B
|
Class
A
|
Class
B
|
||||||||||||||||||
Outstanding-December
31, 2004
|
1,488,200
|
185,100
|
$
|
4.19
|
$
|
9.90
|
1,377,700
|
185,100
|
$
|
4.80
|
$
|
9.90
|
|||||||||||||
Exercised
|
(974,600
|
)
|
--
|
$
|
3.78
|
$
|
--
|
||||||||||||||||||
Granted
|
7,500
|
--
|
$
|
7.86
|
$
|
--
|
|||||||||||||||||||
Outstanding-December
31, 2005
|
521,100
|
185,100
|
$
|
5.00
|
$
|
9.90
|
474,600
|
185,100
|
$
|
5.04
|
$
|
9.90
|
|||||||||||||
Exercised
|
(27,000
|
)
|
--
|
$
|
3.22
|
$
|
--
|
||||||||||||||||||
Granted
|
20,000
|
--
|
$
|
8.10
|
$
|
--
|
|||||||||||||||||||
Outstanding-June
30, 2006
|
514,100
|
185,100
|
$
|
5.21
|
$
|
9.90
|
476,600
|
185,100
|
$
|
5.08
|
$
|
9.90
|
Three
Months
Ending
June 30,
2005
|
Six
Months
Ending
June 30,
2005
|
||||||
Net
income, as reported
|
$
|
10,500
|
$
|
8,097
|
|||
Add:
Stock-based employee/director compensation expense included in reported
net income
|
--
|
--
|
|||||
Less:
Total stock-based employee compensation expense determined under
fair
value based method for all awards
|
20
|
40
|
|||||
Pro
forma net income
|
$
|
10,480
|
$
|
8,057
|
|||
Earnings
per share:
|
|||||||
Basic
and diluted—as reported
|
$
|
0.48
|
$
|
0.37
|
|||
Basic
and diluted—pro forma
|
$
|
0.48
|
$
|
0.37
|
Three
Months Ended June 30, 2006
|
Cinema
|
Real
Estate
|
Total
|
|||||||
Revenue
|
$
|
23,954
|
$
|
4,007
|
$
|
27,961
|
||||
Operating
expense
|
19,187
|
1,756
|
20,943
|
|||||||
Depreciation
& amortization
|
2,271
|
999
|
3,270
|
|||||||
General
& administrative expense
|
532
|
--
|
532
|
|||||||
Segment
operating income
|
$
|
1,964
|
$
|
1,252
|
$
|
3,216
|
||||
Three
Months Ended June 30, 2005
|
Cinema
|
Real
Estate
|
Total
|
|||||||
Revenue
|
$
|
20,983
|
$
|
3,870
|
$
|
24,853
|
||||
Operating
expense
|
17,642
|
2,055
|
19,697
|
|||||||
Depreciation
& amortization
|
2,017
|
957
|
2,974
|
|||||||
General
& administrative expense
|
1,785
|
(146
|
)
|
1,639
|
||||||
Segment
operating income (loss)
|
$
|
(461
|
)
|
$
|
1,004
|
$
|
543
|
Reconciliation
to consolidated net (loss) income:
|
2006
Quarter
|
2005
Quarter
|
|||||
Total
segment operating income
|
$
|
3,216
|
$
|
543
|
|||
Non-segment:
|
|||||||
Depreciation
and amortization expense
|
67
|
29
|
|||||
General
and administrative expense
|
2,544
|
2,493
|
|||||
Operating
income (loss)
|
605
|
(1,979
|
)
|
||||
Interest
expense, net
|
(1,511
|
)
|
(708
|
)
|
|||
Other
income
|
1
|
559
|
|||||
Minority
interest expense
|
(192
|
)
|
(281
|
)
|
|||
Gain
on disposal of discontinued operations
|
--
|
13,610
|
|||||
Loss
from discontinued operations
|
--
|
(667
|
)
|
||||
Income
tax expense
|
(344
|
)
|
(220
|
)
|
|||
Equity
earnings of unconsolidated entities
|
1,207
|
186
|
|||||
Net
income (loss)
|
$
|
(234
|
)
|
$
|
10,500
|
Six
Months Ended June 30, 2006
|
Cinema
|
Real
Estate
|
Total
|
|||||||
Revenue
|
$
|
46,463
|
$
|
7,435
|
$
|
53,898
|
||||
Operating
expense
|
37,064
|
3,468
|
40,532
|
|||||||
Depreciation
& amortization
|
4,355
|
2,019
|
6,374
|
|||||||
General
& administrative expense
|
1,508
|
--
|
1,508
|
|||||||
Segment
operating income
|
$
|
3,536
|
$
|
1,948
|
$
|
5,484
|
||||
Six
Months Ended June 30, 2005
|
Cinema
|
Real
Estate
|
Total
|
|||||||
Revenue
|
$
|
42,899
|
$
|
7,478
|
$
|
50,377
|
||||
Operating
expense
|
35,235
|
3,664
|
38,899
|
|||||||
Depreciation
& amortization
|
4,231
|
1,863
|
6,094
|
|||||||
General
& administrative expense
|
3,110
|
3
|
3,113
|
|||||||
Segment
operating income
|
$
|
323
|
$
|
1,948
|
$
|
2,271
|
Reconciliation
to consolidated net income (loss):
|
2006
Six Months
|
2005
Six Months
|
|||||
Total
segment operating income
|
$
|
5,484
|
$
|
2,271
|
|||
Non-segment:
|
|||||||
Depreciation
and amortization expense
|
203
|
72
|
|||||
General
and administrative expense
|
4,933
|
4,766
|
|||||
Operating
income (loss)
|
348
|
(2,567
|
)
|
||||
Interest
expense, net
|
(3,295
|
)
|
(1,574
|
)
|
|||
Other
income (loss)
|
(1,154
|
)
|
289
|
||||
Minority
interest expense
|
(272
|
)
|
(419
|
)
|
|||
Gain
on disposal of discontinued operations
|
--
|
13,610
|
|||||
Loss
from discontinued operations
|
--
|
(1,379
|
)
|
||||
Income
tax expense
|
(681
|
)
|
(453
|
)
|
|||
Equity
earnings of unconsolidated entities
|
1,674
|
590
|
|||||
Net
income (loss)
|
$
|
(3,380
|
)
|
$
|
8,097
|
US
Dollar
|
|||||||
June
30, 2006
|
December
31, 2005
|
||||||
Australian
Dollar
|
$
|
0.7423
|
$
|
0.7342
|
|||
New
Zealand Dollar
|
$
|
0.6105
|
$
|
0.6845
|
Three
Months Ending
June
30,
|
Six
Months Ending
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Loss
from continuing operations
|
$
|
(234
|
)
|
$
|
(2,442
|
)
|
$
|
(3,380
|
)
|
$
|
(4,134
|
)
|
|
Income
from discontinued operations
|
--
|
12,942
|
--
|
12,231
|
|||||||||
Net
income (loss)
|
(234
|
)
|
10,500
|
(3,380
|
)
|
8,097
|
|||||||
Weighted
average shares of common stock
|
22,413,995
|
21,988,031
|
22,431,834
|
21,988,031
|
|||||||||
Earnings
(loss) per share:
|
|||||||||||||
Loss
from continuing operations - basic and dilutive
|
$
|
(0.01
|
)
|
$
|
(0.11
|
)
|
$
|
(0.15
|
)
|
$
|
(0.19
|
)
|
|
Income
from discontinued operations - basic and dilutive
|
$
|
--
|
$
|
0.59
|
$
|
--
|
$
|
0.56
|
|||||
Earnings
(loss) per share - basic and dilutive
|
$
|
(0.01
|
)
|
$
|
0.48
|
$
|
(0.15
|
)
|
$
|
0.37
|
Property
Under Development
|
June
30,
2006
|
December
31,
2005
|
|||||
Land
|
$
|
18,592
|
$
|
18,585
|
|||
Construction-in-progress
(including capitalized interest)
|
5,755
|
4,484
|
|||||
Property
Under Development
|
$
|
24,347
|
$
|
23,069
|
June
30,
2006
|
December
31,
2005
|
||||||
Property
and equipment
|
|||||||
Land
|
$
|
55,033
|
$
|
54,476
|
|||
Building
|
91,303
|
92,188
|
|||||
Leasehold
interest
|
9,539
|
9,075
|
|||||
Construction-in-progress
|
1,799
|
863
|
|||||
Fixtures
and equipment
|
53,518
|
51,221
|
|||||
211,192
|
207,823
|
||||||
Less
accumulated depreciation
|
(46,483
|
)
|
(40,434
|
)
|
|||
Property
and equipment, net
|
$
|
164,709
|
$
|
167,389
|
Interest
|
June
30,
2006
|
December
31,
2005
|
||||||||
Malulani
Investments, Ltd.
|
18.4
%
|
|
$
|
1,800
|
$
|
--
|
||||
Rialto
Distribution
|
33.3
%
|
|
633
|
734
|
||||||
Rialto
Cinemas
|
50.0
%
|
|
4,184
|
4,691
|
||||||
205-209
East 57th
Street Associates, LLC
|
25.0
%
|
|
4,057
|
3,139
|
||||||
Mt.
Gravatt
|
33.3
%
|
|
4,381
|
4,052
|
||||||
Berkeley
Cinemas
|
50.0
%
|
|
1,351
|
1,409
|
||||||
Total
|
$
|
16,406
|
$
|
14,025
|
Three
Months Ending
June
30,
|
Six
Months Ending
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Rialto
Distribution
|
$
|
(22
|
)
|
$
|
--
|
$
|
(22
|
)
|
$
|
--
|
|||
205-209
East 57th
Street Associates, LLC
|
918
|
--
|
918
|
--
|
|||||||||
Mt.
Gravatt
|
91
|
83
|
285
|
218
|
|||||||||
Berkeley
Cinemas
|
220
|
103
|
493
|
372
|
|||||||||
$
|
1,207
|
$
|
186
|
$
|
1,674
|
$
|
590
|
June
30,
2006
|
December
31,
2005
|
||||||
Segments
|
|||||||
Cinema
|
$
|
12,126
|
$
|
9,489
|
|||
Real
estate
|
5,090
|
5,164
|
|||||
Total
|
$
|
17,216
|
$
|
14,653
|
As
of June 30, 2006
|
Beneficial
Leases
|
Option
Fee
|
Other
Intangible Assets
|
Total
|
|||||||||
Gross
carrying amount
|
$
|
10,937
|
$
|
2,773
|
$
|
191
|
$
|
13,901
|
|||||
Less:
Accumulated amortization
|
3,175
|
2,379
|
14
|
5,568
|
|||||||||
Total,
net
|
$
|
7,762
|
$
|
394
|
$
|
177
|
$
|
8,333
|
As
of December 31, 2005
|
Beneficial
Leases
|
Option
Fee
|
Other
Intangible Assets
|
Total
|
|||||||||
Gross
carrying amount
|
$
|
10,957
|
$
|
2,773
|
$
|
212
|
$
|
13,942
|
|||||
Less:
Accumulated amortization
|
2,809
|
2,332
|
13
|
5,154
|
|||||||||
Total,
net
|
$
|
8,148
|
$
|
441
|
$
|
199
|
$
|
8,788
|
June
30,
2006
|
December
31,
2005
|
||||||
Prepaid
and other current assets
|
|||||||
Prepaid
expenses
|
$
|
1,256
|
$
|
246
|
|||
Prepaid
taxes
|
480
|
370
|
|||||
Deposits
|
167
|
157
|
|||||
Other
|
216
|
223
|
|||||
Total
prepaid and other current assets
|
$
|
2,119
|
$
|
996
|
|||
Other
non-current assets
|
|||||||
Other
non-cinema and non-rental real estate assets
|
$
|
1,314
|
$
|
1,314
|
|||
Long-term
restricted cash
|
--
|
191
|
|||||
Deferred
financing costs, net
|
517
|
847
|
|||||
Other
|
254
|
192
|
|||||
Total
non-current assets
|
$
|
2,085
|
$
|
2,544
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Foreign
income tax provision
|
$
|
30
|
$
|
38
|
$
|
59
|
$
|
72
|
|||||
Foreign
withholding tax
|
137
|
119
|
273
|
245
|
|||||||||
Federal
tax provision
|
128
|
--
|
255
|
51
|
|||||||||
Other
income tax
|
49
|
63
|
94
|
85
|
|||||||||
Net
tax provision
|
$
|
344
|
$
|
220
|
$
|
681
|
$
|
453
|
Interest
Rates as of
|
Balance
as of
|
|||||||||||||||
Name
of Note Payable
|
June
30, 2006
|
December
31, 2005
|
Maturity
Date
|
June
30, 2006
|
December
31, 2005
|
|||||||||||
Australian
Corporate Credit Facility
|
7.06%
|
|
6.96%
|
|
January
1, 2009
|
$
|
62,503
|
$
|
32,442
|
|||||||
Australian
Newmarket Construction Loan
|
N/A
|
7.34%
|
|
N/A
|
--
|
21,701
|
||||||||||
Australian
Shopping Center Loans
|
6.53%
|
|
6.53%
|
|
2007-2013
|
1,098
|
1,169
|
|||||||||
New
Zealand Corporate Credit Facility
|
9.05%
|
|
9.15%
|
|
November
23, 2009
|
30,525
|
34,225
|
|||||||||
New
Zealand Movieland Note Payable
|
N/A
|
5.50%
|
|
February
27, 2006
|
--
|
537
|
||||||||||
US
Sutton Hill Capital Note 1 - Related Party
|
9.26%
|
|
9.26%
|
|
July
28, 2007
|
5,000
|
5,000
|
|||||||||
US
Royal George Theatre Term Loan
|
7.66%
|
|
6.97%
|
|
November
29, 2007
|
1,903
|
1,986
|
|||||||||
US
Sutton Hill Capital Note 2 - Related Party
|
8.25%
|
|
8.25%
|
|
December
31, 2010
|
9,000
|
9,000
|
|||||||||
US
Union Square Theatre Term Loan
|
7.31%
|
|
7.31%
|
|
October
1, 2011
|
3,228
|
3,260
|
|||||||||
Total
Notes Payable
|
$
|
113,257
|
$
|
109,320
|
June
30, 2006
|
December
31, 2005
|
||||||
Current
liabilities
|
|||||||
Security
deposit payable
|
$
|
193
|
$
|
174
|
|||
Other
|
--
|
76
|
|||||
Other
current liabilities
|
$
|
193
|
$
|
250
|
|||
Other
liabilities
|
|||||||
Foreign
withholding taxes
|
$
|
5,078
|
$
|
4,944
|
|||
Straight-line
rent liability
|
3,621
|
3,541
|
|||||
Option
liability
|
3,481
|
1,055
|
|||||
Environmental
reserve
|
1,656
|
1,656
|
|||||
Interest
rate swap
|
86
|
635
|
|||||
Option
deposit
|
3,000
|
--
|
|||||
Other
|
925
|
678
|
|||||
Other
liabilities
|
$
|
17,847
|
$
|
12,509
|
·
|
50%
of membership interest in Angelika Film Center LLC (“AFC LLC”) by a
subsidiary of National Auto Credit,
Inc.;
|
·
|
33%
minority interest in the Elsternwick Joint Venture by Champion Pictures
Pty Ltd.; and
|
·
|
25%
minority interest in Australia Country Cinemas Pty Ltd (“ACC”) by Panorama
Cinemas for the 21st
Century Pty Ltd.
|
June
30,
|
December
31,
|
||||||
2006
|
2005
|
||||||
AFC
LLC
|
$
|
1,717
|
$
|
2,847
|
|||
Elsternwick
Unincorporated Joint Venture
|
112
|
116
|
|||||
Australian
Country Cinemas
|
30
|
113
|
|||||
Others
|
1
|
3
|
|||||
Minority
interest in consolidated affiliates
|
$
|
1,860
|
$
|
3,079
|
|||
Expense
for the
|
Expense
for the
|
||||||||||||
Three
Months Ended June 30,
|
Six
Months Ended June 30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
AFC
LLC
|
$
|
187
|
$
|
51
|
$
|
257
|
$
|
209
|
|||||
Australian
Country Cinemas
|
--
|
150
|
3
|
152
|
|||||||||
Elsternwick
Unincorporated Joint Venture
|
5
|
80
|
12
|
58
|
|||||||||
Minority
interest expense
|
$
|
192
|
$
|
281
|
$
|
272
|
$
|
419
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Net
income (loss)
|
$
|
(234
|
)
|
$
|
10,500
|
$
|
(3,380
|
)
|
$
|
8,097
|
|||
Foreign
currency translation
|
2,497
|
(2,030
|
)
|
(999
|
)
|
(1,524
|
)
|
||||||
Unrealized
loss on AFS
|
10
|
--
|
17
|
--
|
|||||||||
Comprehensive
income (loss)
|
$
|
2,273
|
$
|
8,470
|
$
|
(4,362
|
)
|
$
|
6,573
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Revenue
|
$
|
--
|
$
|
441
|
$
|
--
|
$
|
1,103
|
|||||
Operating
expense
|
--
|
129
|
--
|
355
|
|||||||||
Depreciation
& amortization expense
|
--
|
(99
|
)
|
--
|
51
|
||||||||
General
& administrative expense
|
--
|
1
|
--
|
1
|
|||||||||
Operating
income
|
--
|
410
|
--
|
696
|
|||||||||
Interest
income
|
--
|
3
|
--
|
3
|
|||||||||
Interest
expense
|
--
|
105
|
--
|
312
|
|||||||||
Income
from discontinued operations before gain on sale
|
--
|
308
|
--
|
387
|
|||||||||
Gain
on sale
|
--
|
12,013
|
--
|
12,013
|
|||||||||
Total
income from discontinued operations
|
$
|
--
|
$
|
12,321
|
$
|
--
|
$
|
12,400
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Revenue
|
$
|
--
|
$
|
2,098
|
$
|
--
|
$
|
4,575
|
|||||
Operating
expense
|
--
|
2,796
|
--
|
5,752
|
|||||||||
Depreciation
& amortization expense
|
--
|
86
|
--
|
206
|
|||||||||
General
& administrative expense
|
--
|
191
|
--
|
383
|
|||||||||
Income
(loss) from discontinued operations before gain on sale
|
--
|
(975
|
)
|
--
|
(1,766
|
)
|
|||||||
Gain
on sale
|
--
|
1,597
|
--
|
1,597
|
|||||||||
Total
income (loss) from discontinued operations
|
$
|
--
|
$
|
622
|
$
|
--
|
$
|
(169
|
)
|
Palms
Cinema
|
||||
Assets
|
||||
Accounts
receivable
|
$
|
284
|
||
Inventory
|
11
|
|||
Other
assets
|
11
|
|||
Property
and equipment
|
749
|
|||
Goodwill
|
2,983
|
|||
Total
assets
|
4,038
|
|||
Liabilities
|
||||
Accounts
payable and accrued liabilities
|
121
|
|||
Note
payable
|
993
|
|||
Other
liabilities
|
83
|
|||
Total
liabilities
|
1,197
|
|||
Total
net assets
|
$
|
2,841
|
Type
of Instrument
|
Notional
Amount
|
Pay
Fixed Rate
|
Receive
Variable Rate
|
Maturity
Date
|
|||||||||
Interest
rate swap
|
$
|
8,908,000
|
5.7000%
|
|
5.6600%
|
|
December
31, 2007
|
||||||
Interest
rate swap
|
$
|
11,506,000
|
6.4400%
|
|
5.6600%
|
|
December
31, 2008
|
||||||
Interest
rate swap
|
$
|
12,118,000
|
6.6800%
|
|
5.6600%
|
|
December
31, 2008
|
||||||
Interest
rate swap
|
$
|
9,038,000
|
5.8800%
|
|
5.6600%
|
|
December
31, 2008
|
||||||
Interest
rate swap
|
$
|
2,598,000
|
6.3600%
|
|
5.8767%
|
|
December
31, 2008
|
·
|
the
development, ownership and operation of multiplex cinemas in the
United
States, Australia, and New Zealand;
|
·
|
the
development and operation of cinema-based entertainment-themed
retail
centers (“ETRC”) in Australia and New
Zealand;
|
·
|
the
ownership and operation, typically as a landlord, of “Off Broadway” style
live theatres in Manhattan and Chicago;
and
|
·
|
the
development, ownership and operation of commercial real estate
in
Australia, New Zealand and the United States typically as a business
ancillary to the development and operation of cinemas, cinema-based
ETRC’s
and live theatres; and
|
·
|
the
ownership and operation, typically as a landlord, of “Off Broadway” style
live theatres in Manhattan and
Chicago.
|
·
|
in
the US, under the Reading, Angelika Film Center and City Cinemas
brands;
|
·
|
in
Australia, under the Reading brand;
and
|
·
|
in
New Zealand, under the Reading, Berkeley Cinemas and Rialto
brands.
|
·
|
the
rezoning approval by the Victoria State Government of our 50.6
acre
Burwood property (located in suburban Melbourne) from an essentially
industrial to a priority use zone allowing a mixture of retail,
entertainment, commercial and residential uses;
and
|
·
|
the
completion and lease-up of our 4.1 acre Newmarket Shopping Centre
in
Brisbane, Australia (100,000 square feet of leased retail space).
That
property is now approximately 98% leased, including anchor tenancies
provided by a major grocery chain and a major pub
operator.
|
·
|
the
sale effective June 8, 2005 of our Puerto Rican cinema
operations;
|
·
|
the
sale effective May 17, 2005 of our Glendale, California office building,
our only commercial domestic property with no entertainment
component;
|
·
|
the
acquisition on June 1, 2005 and September 19, 2005 of the various
real
property interests underlying our leasehold interest in our Cinemas
1, 2
& 3 cinema;
|
·
|
the
opening in the fourth quarter of 2005 and the occupancy of the majority
of
tenancies during first quarter of 2006 of our Newmarket Shopping
Center, a
100,000 square foot retail center in a suburb of Brisbane,
Australia;
|
·
|
the
opening of a cinema in a suburb of Adelaide, Australia on October
20, 2005
and the acquisition of a cinema in Queenstown, New Zealand effective
February 23, 2006;
|
·
|
the
purchase of the 50% share that we did not already own of the Palms
8-screen, leasehold cinema located in Christchurch, New Zealand effective
April 1, 2006; and
|
·
|
the
reduction in the value of the Australian and New Zealand dollars
vis-à-vis
the US dollar from $0.7618 and $0.6959, respectively, as of June
30, 2005
to $0.7423 and $0.6105, respectively, as of June 30,
2006.
|
Three
Months Ended June 30, 2006
|
Cinema
|
Real
Estate
|
Total
|
|||||||
Revenue
|
$
|
23,954
|
$
|
4,007
|
$
|
27,961
|
||||
Operating
expense
|
19,187
|
1,756
|
20,943
|
|||||||
Depreciation
& amortization
|
2,271
|
999
|
3,270
|
|||||||
General
& administrative expense
|
532
|
--
|
532
|
|||||||
Segment
operating income
|
$
|
1,964
|
$
|
1,252
|
$
|
3,216
|
||||
Three
Months Ended June 30, 2005
|
Cinema
|
Real
Estate
|
Total
|
|||||||
Revenue
|
$
|
20,983
|
$
|
3,870
|
$
|
24,853
|
||||
Operating
expense
|
17,642
|
2,055
|
19,697
|
|||||||
Depreciation
& amortization
|
2,017
|
957
|
2,974
|
|||||||
General
& administrative expense
|
1,785
|
(146
|
)
|
1,639
|
||||||
Segment
operating income (loss)
|
$
|
(461
|
)
|
$
|
1,004
|
$
|
543
|
Reconciliation
to consolidated net income (loss):
|
2006
Quarter
|
2005
Quarter
|
|||||
Total
segment operating income
|
$
|
3,216
|
$
|
543
|
|||
Non-segment:
|
|||||||
Depreciation
and amortization expense
|
67
|
29
|
|||||
General
and administrative expense
|
2,544
|
2,493
|
|||||
Operating
income (loss)
|
605
|
(1,979
|
)
|
||||
Interest
expense, net
|
(1,511
|
)
|
(708
|
)
|
|||
Other
income
|
1
|
559
|
|||||
Minority
interest expense
|
(192
|
)
|
(281
|
)
|
|||
Gain
on disposal of discontinued operations
|
--
|
13,610
|
|||||
Loss
from discontinued operations
|
--
|
(667
|
)
|
||||
Income
tax expense
|
(344
|
)
|
(220
|
)
|
|||
Equity
earnings of unconsolidated entities
|
1,207
|
186
|
|||||
Net
income (loss)
|
$
|
(234
|
)
|
$
|
10,500
|
Six
Months Ended June 30, 2006
|
Cinema
|
Real
Estate
|
Total
|
|||||||
Revenue
|
$
|
46,463
|
$
|
7,435
|
$
|
53,898
|
||||
Operating
expense
|
37,064
|
3,468
|
40,532
|
|||||||
Depreciation
& amortization
|
4,355
|
2,019
|
6,374
|
|||||||
General
& administrative expense
|
1,508
|
--
|
1,508
|
|||||||
Segment
operating income
|
$
|
3,536
|
$
|
1,948
|
$
|
5,484
|
||||
Six
Months Ended June 30, 2005
|
Cinema
|
Real
Estate
|
Total
|
|||||||
Revenue
|
$
|
42,899
|
$
|
7,478
|
$
|
50,377
|
||||
Operating
expense
|
35,235
|
3,664
|
38,899
|
|||||||
Depreciation
& amortization
|
4,231
|
1,863
|
6,094
|
|||||||
General
& administrative expense
|
3,110
|
3
|
3,113
|
|||||||
Segment
operating income
|
$
|
323
|
$
|
1,948
|
$
|
2,271
|
||||
Reconciliation
to consolidated net income (loss):
|
2006
Six Months
|
2005
Six Months
|
|||||
Total
segment operating income
|
$
|
5,484
|
$
|
2,271
|
|||
Non-segment:
|
|||||||
Depreciation
and amortization expense
|
203
|
72
|
|||||
General
and administrative expense
|
4,933
|
4,766
|
|||||
Operating
income (loss)
|
348
|
(2,567
|
)
|
||||
Interest
expense, net
|
(3,295
|
)
|
(1,574
|
)
|
|||
Other
income (loss)
|
(1,154
|
)
|
289
|
||||
Minority
interest expense
|
(272
|
)
|
(419
|
)
|
|||
Gain
on disposal of discontinued operations
|
--
|
13,610
|
|||||
Loss
from discontinued operations
|
--
|
(1,379
|
)
|
||||
Income
tax expense
|
(681
|
)
|
(453
|
)
|
|||
Equity
earnings of unconsolidated entities
|
1,674
|
590
|
|||||
Net
income (loss)
|
$
|
(3,380
|
)
|
$
|
8,097
|
Three
Months Ended June 30, 2006
|
United
States
|
Australia
|
New
Zealand
|
Total
|
|||||||||
Admissions
revenue
|
$
|
3,952
|
$
|
9,822
|
$
|
3,790
|
$
|
17,564
|
|||||
Concessions
revenue
|
1,186
|
2,980
|
1,095
|
5,261
|
|||||||||
Advertising
and other revenues
|
471
|
475
|
183
|
1,129
|
|||||||||
Total
revenues
|
5,609
|
13,277
|
5,068
|
23,954
|
|||||||||
Cinema
costs
|
4,107
|
10,190
|
3,762
|
18,059
|
|||||||||
Concession
costs
|
163
|
701
|
264
|
1,128
|
|||||||||
Total
operating expense
|
4,270
|
10,891
|
4,026
|
19,187
|
|||||||||
Depreciation
and amortization
|
545
|
1,411
|
315
|
2,271
|
|||||||||
General
& administrative expense
|
518
|
33
|
(19
|
)
|
532
|
||||||||
Segment
operating income
|
$
|
276
|
$
|
942
|
$
|
746
|
$
|
1,964
|
|||||
Three
Months Ended June 30, 2005
|
United
States
|
Australia
|
New
Zealand
|
Total
|
|||||||||
Admissions
revenue
|
$
|
3,741
|
$
|
8,647
|
$
|
2,958
|
$
|
15,346
|
|||||
Concessions
revenue
|
1,081
|
2,810
|
927
|
4,818
|
|||||||||
Advertising
and other revenues
|
270
|
389
|
160
|
819
|
|||||||||
Total
revenues
|
5,092
|
11,846
|
4,045
|
20,983
|
|||||||||
Cinema
costs
|
4,156
|
9,652
|
2,726
|
16,534
|
|||||||||
Concession
costs
|
220
|
633
|
255
|
1,108
|
|||||||||
Total
operating expense
|
4,376
|
10,285
|
2,981
|
17,642
|
|||||||||
Depreciation
and amortization
|
522
|
1,243
|
252
|
2,017
|
|||||||||
General
& administrative expense
|
1,771
|
39
|
(25
|
)
|
1,785
|
||||||||
Segment
operating income (loss)
|
$
|
(1,577
|
)
|
$
|
279
|
$
|
837
|
$
|
(461
|
)
|
|||
·
|
Cinema
revenue increased for the 2006 Quarter by $3.0 million or 14.2% compared
to the same period in 2005. The 2006 Quarter increase was from improved
results in our Australia and New Zealand operations of $2.4 million
primarily related to increased admissions and a commensurate increase
in
concessions and other revenues.
|
·
|
Operating
expense increased for the 2006 Quarter by $1.5 million or 8.8% compared
to
the same period in 2005. This increase followed the aforementioned
increase in revenues. Overall, our operating expenses for three months
year-to-year were consistent at approximately 80% of gross revenue
for
both 2006 and 2005.
|
·
|
Depreciation
and amortization expense increased for the 2006 Quarter by $254,000
or
12.6% compared to the same period in 2005 primarily related to the
increase in depreciation in the new Australian Elizabeth Cinema acquired
in October 2005 offset by the decrease in the Sutton Hill Capital
Option
Fee amortization expense directly related to the purchase of the
Cinemas
1, 2, & 3 in Sep 2005.
|
·
|
General
and administrative expense decreased for the 2006 Quarter by $1.3
million
or 70.3% compared to the same period in 2005. The decrease was due
to a
drop in legal costs primarily related to our anti-trust litigation
associated with our Village East cinema and the purchase of the Cinemas
1,
2, & 3 which decreased the amount of rent paid to related parties.
|
·
|
As
a result of the above, cinema segment income increased for the 2006
Quarter by $2.4 million compared to the same period in
2005.
|
Six
Months Ended June 30, 2006
|
United
States
|
Australia
|
New
Zealand
|
Total
|
|||||||||
Admissions
revenue
|
$
|
8,238
|
$
|
19,205
|
$
|
6,608
|
$
|
34,051
|
|||||
Concessions
revenue
|
2,505
|
5,898
|
1,955
|
10,358
|
|||||||||
Advertising
and other revenues
|
754
|
942
|
358
|
2,054
|
|||||||||
Total
revenues
|
11,497
|
26,045
|
8,921
|
46,463
|
|||||||||
Cinema
costs
|
8,759
|
20,003
|
6,003
|
34,765
|
|||||||||
Concession
costs
|
422
|
1,356
|
521
|
2,299
|
|||||||||
Total
operating expense
|
9,181
|
21,359
|
6,524
|
37,064
|
|||||||||
Depreciation
and amortization
|
991
|
2,778
|
586
|
4,355
|
|||||||||
General
& administrative expense
|
1,453
|
40
|
15
|
1,508
|
|||||||||
Segment
operating income (loss)
|
$
|
(128
|
)
|
$
|
1,868
|
$
|
1,796
|
$
|
3,536
|
||||
Six
Months Ended June 30, 2005
|
United
States
|
Australia
|
New
Zealand
|
Total
|
|||||||||
Admissions
revenue
|
$
|
8,386
|
$
|
17,298
|
$
|
5,834
|
$
|
31,518
|
|||||
Concessions
revenue
|
2,345
|
5,355
|
1,778
|
9,478
|
|||||||||
Advertising
and other revenues
|
628
|
962
|
313
|
1,903
|
|||||||||
Total
revenues
|
11,359
|
23,615
|
7,925
|
42,899
|
|||||||||
Cinema
costs
|
8,757
|
19,209
|
4,990
|
32,956
|
|||||||||
Concession
costs
|
491
|
1,253
|
535
|
2,279
|
|||||||||
Total
operating expense
|
9,248
|
20,462
|
5,525
|
35,235
|
|||||||||
Depreciation
and amortization
|
1,044
|
2,670
|
517
|
4,231
|
|||||||||
General
& administrative expense
|
3,090
|
43
|
(23
|
)
|
3,110
|
||||||||
Segment
operating income (loss)
|
$
|
(2,023
|
)
|
$
|
440
|
$
|
1,906
|
$
|
323
|
·
|
Cinema
revenue increased for the 2006 Six Months by $3.6 million or 8.3%
compared
to the same period in 2005. The 2006 Six Months increase was from
improved
results from our Australia and New Zealand operations including $2.7
million from admissions and $883,000 from concessions and other revenues.
|
·
|
Operating
expense increased for the 2006 Six Months by $1.8 million or 5.2%
compared
to the same period in 2005. This increase followed the aforementioned
increase in revenues. Overall, our operating expenses from year-to-year
were consistent at approximately 80% of gross revenue for both 2006
and
2005.
|
·
|
Depreciation
and amortization expense increased for the 2006 Six Months by $124,000
or
2.9% compared to the same period in 2005. This increase is primarily
related to the new Australian Elizabeth Cinema acquired in October
2005
offset by the decrease in the Sutton Hill Capital Option Fee amortization
expense directly related to the purchase of the Cinemas 1, 2, & 3 in
September 2005.
|
·
|
General
and administrative expense decreased for the 2006 Six Months by
$1.6
million or 51.5% compared to the same period in 2005. The decrease
was due
to a drop in legal costs primarily related to our anti-trust litigation
associated with our Village East cinema and the purchase of the
Cinemas 1,
2 & 3 which decreased the amount of rent paid to related parties.
|
·
|
As
a result of the above, cinema segment income increased for the 2006
Six
Months by $3.2 million compared to the same period in
2005.
|
·
|
ETRCs
at Belmont in Perth; at Auburn in Sydney; and at Newmarket in Brisbane
in
Australia; and Courtenay Central in Wellington, New
Zealand;
|
·
|
three
single auditorium live theatres in Manhattan (Minetta Lane, Orpheum,
and
Union Square) and a four auditorium live theatre complex in Chicago
(The
Royal George) and, in the case of the Union Square and the Royal
George
their accompanying ancillary retail and commercial
tenants;
|
·
|
the
ancillary retail and commercial tenants at some of our non-ETRC cinema
locations; and
|
·
|
certain
raw land, used in our historic
activities.
|
Three
Months Ended June 30, 2006
|
United
States
|
Australia
|
New
Zealand
|
Total
|
|||||||||
Live
theatre rental and ancillary income
|
$
|
1,003
|
$
|
--
|
$
|
--
|
$
|
1,003
|
|||||
Property
rental income
|
302
|
1,511
|
1,191
|
3,004
|
|||||||||
Total
revenues
|
1,305
|
1,511
|
1,191
|
4,007
|
|||||||||
Live
theatre costs
|
490
|
--
|
--
|
490
|
|||||||||
Property
rental cost
|
245
|
645
|
376
|
1,266
|
|||||||||
Total
operating expense
|
735
|
645
|
376
|
1,756
|
|||||||||
Depreciation
and amortization
|
106
|
529
|
364
|
999
|
|||||||||
Segment
operating income
|
$
|
464
|
$
|
337
|
$
|
451
|
$
|
1,252
|
Three
Months Ended June 30, 2005
|
United
States
|
Australia
|
New
Zealand
|
Total
|
|||||||||
Live
theatre rental and ancillary income
|
$
|
1,338
|
$
|
--
|
$
|
--
|
$
|
1,338
|
|||||
Property
rental income
|
186
|
1,122
|
1,224
|
2,532
|
|||||||||
Total
revenues
|
1,524
|
1,122
|
1,224
|
3,870
|
|||||||||
Live
theatre costs
|
766
|
--
|
--
|
766
|
|||||||||
Property
rental cost
|
139
|
533
|
617
|
1,289
|
|||||||||
Total
operating expense
|
905
|
533
|
617
|
2,055
|
|||||||||
Depreciation
and amortization
|
115
|
398
|
444
|
957
|
|||||||||
General
& administrative expense
|
--
|
(146
|
)
|
--
|
(146
|
)
|
|||||||
Segment
operating income
|
$
|
504
|
$
|
337
|
$
|
163
|
$
|
1,004
|
|||||
·
|
Revenue
increased for the 2006 Quarter by $137,000 or 3.5% compared to the
same
period in 2005. The increase was primarily related to an enhanced
rental
stream from our recently opened Newmarket ETRC in Australia of $472,000
offset by the decrease in rent of $335,000 in our Domestic Live Theatres
due to fewer shows during 2006 compared to
2005.
|
·
|
Operating
expense for the real estate segment decreased for the 2006 Quarter
by
$299,000 or 14.5% compared to the same period in 2005. This decrease
in
expense was primarily related to the significant drop in operating
activity in our Domestic Live
Theatres.
|
·
|
Depreciation
expense for the real estate segment increased by $42,000 or 4.4%
for the
2006 Quarter compared to the same period in 2005. The majority of
this
increase was attributed to the Newmarket shopping center assets in
Australia which were put into service during the first quarter
2006.
|
·
|
As
a result of the above, real estate segment income increased for the
2006
Quarter by $248,000 compared to the same period in
2005.
|
Six
Months Ended June 30, 2006
|
United
States
|
Australia
|
New
Zealand
|
Total
|
|||||||||
Live
theatre rental and ancillary income
|
$
|
2,038
|
$
|
--
|
$
|
--
|
$
|
2,038
|
|||||
Property
rental income
|
736
|
2,677
|
1,984
|
5,397
|
|||||||||
Total
revenues
|
2,774
|
2,677
|
1,984
|
7,435
|
|||||||||
Live
theatre costs
|
1,146
|
--
|
--
|
1,146
|
|||||||||
Property
rental cost
|
436
|
1,175
|
711
|
2,322
|
|||||||||
Total
operating expense
|
1,582
|
1,175
|
711
|
3,468
|
|||||||||
Depreciation
and amortization
|
212
|
1,054
|
753
|
2,019
|
|||||||||
Segment
operating income
|
$
|
980
|
$
|
448
|
$
|
520
|
$
|
1,948
|
Six
Months Ended June 30, 2005
|
United
States
|
Australia
|
New
Zealand
|
Total
|
|||||||||
Live
theatre rental and ancillary income
|
$
|
2,640
|
$
|
--
|
$
|
--
|
$
|
2,640
|
|||||
Property
rental income
|
532
|
2,259
|
2,047
|
4,838
|
|||||||||
Total
revenues
|
3,172
|
2,259
|
2,047
|
7,478
|
|||||||||
Live
theatre costs
|
1,455
|
--
|
--
|
1,455
|
|||||||||
Property
rental cost
|
261
|
974
|
974
|
2,209
|
|||||||||
Total
operating expense
|
1,716
|
974
|
974
|
3,664
|
|||||||||
Depreciation
and amortization
|
172
|
779
|
912
|
1,863
|
|||||||||
General
& administrative expense
|
3
|
--
|
--
|
3
|
|||||||||
Segment
operating income
|
$
|
1,281
|
$
|
506
|
$
|
161
|
$
|
1,948
|
·
|
Revenue
decreased for the 2006 Six Months by $43,000 or 0.6% compared to
the same
period in 2005. The decrease was primarily related to an enhanced
rental
stream from our recently opened Newmarket ETRC in Australia offset
by the
decrease in rent of $602,000 in our Domestic Live Theatres.
|
·
|
Operating
expense for the real estate segment decreased for the 2006 Six Months
by
$196,000 or 5.3% compared to the same period in 2005. This decrease
in
expense was primarily related to the significant drop in operating
activity in our Domestic Live Theatres due to fewer shows during
2006
compared to 2005.
|
·
|
Depreciation
expense for the real estate segment increased by $156,000 or 8.4%
for the
2006 Six Months compared to the same period in 2005. The majority
of this
increase was attributed to the Newmarket shopping center assets in
Australia which were put into service during the first quarter
2006.
|
·
|
As
a result of the above, real estate segment income for the 2006 Six
Months
remained unchanged compared to the same period in
2005.
|
2006
|
2007
|
2008
|
2009
|
2010
|
Thereafter
|
||||||||||||||
Long-term
debt
|
$
|
851
|
$
|
4,997
|
$
|
3,025
|
$
|
86,991
|
$
|
241
|
$
|
3,152
|
|||||||
Long-term
debt to related parties
|
--
|
5,000
|
--
|
--
|
9,000
|
--
|
|||||||||||||
Lease
obligations
|
4,954
|
10,260
|
9,604
|
9,506
|
9,356
|
70,674
|
|||||||||||||
Estimated
interest on long-term debt
|
4,394
|
8,518
|
7,782
|
3,352
|
955
|
172
|
|||||||||||||
Total
|
$
|
10,199
|
$
|
28,775
|
$
|
20,411
|
$
|
99,849
|
$
|
19,552
|
$
|
73,998
|
· |
working
capital requirements;
|
· |
debt
servicing requirements; and
|
· |
capital
expenditures, centered on obtaining the right financing for the
development of our Burwood
property.
|
· |
$939,000
in cash used to purchase the Queenstown Cinema in New
Zealand;
|
· |
$2.8
million in cash used to purchase the 50% share that we did not already
own
of the Palms joint venture cinema located in Christchurch, New Zealand;
|
· |
$4.6
million in cash used to complete the Newmarket property and for property
enhancements to our Australia, New Zealand and U.S. properties;
and
|
· |
$1.8
million paid for Malulani Investments, Ltd.
stock.
|
· |
$13.5
million in purchases of property and equipment for the most part
related
to the construction work on our Newmarket development in Brisbane,
Australia;
|
· |
$963,000
increase in our investment in the 205-209 East 57th
Street Associates, LLC;
|
· |
$1.0
million in purchases of property and equipment mainly in New Zealand;
|
· |
$700,000
deposit paid to secure a contract to acquire a 50% interest in an
unincorporated joint venture that owns 20 screens; and
|
· |
$11.5
million paid for the acquisition of the fee interest in the Cinemas
1, 2
& 3 property in New York City.
|
· |
$12.6
million in net proceeds from the sales of our Glendale office building
and
Puerto Rico operations; and
|
· |
$833,000
decrease in restricted cash.
|
· |
$8.0
million of new borrowings on our Australian Corporate Credit
Facility;
|
· |
$3.0
million of a deposit paid by Sutton Hill Capital, LLC of the option
to
purchase a 25% non-managing membership interest in the limited liability
company that owns the Cinemas 1, 2 &
3;
|
· |
$2.9
million of cash used to pay down long-term debt which was primarily
related to the final payoff of the Movieland purchase note payable
of
approximately $512,000; the payoff of the Palms - Christchurch Cinema
bank
debt of approximately $1.9 million; and we
made the first principal payment on our
Australian Corporate Credit Facility
of
$280,000;
|
· |
$792,000
of cash used to repurchase the Class A Nonvoting Common Stock (these
shares were previously issued to the Movieland sellers who exercised
their
put option during the 2006 Six Months to sell back to us the shares
they
had received in partial consideration for the sale of the Movieland
cinemas); and
|
· |
$1.5
million in distributions to minority
interests.
|
· |
$1.7
million net cash provided by operating
activities;
|
· |
$8.0
million of new borrowings on our Australian Corporate Credit Facility;
and
|
· |
$3.0
million of a deposit paid by Sutton Hill Capital, LLC of the option
to
purchase a 25% non-managing membership interest in the limited liability
company that owns the Cinemas 1, 2, & 3;
|
· |
$939,000
in cash used to purchase the Queenstown Cinema in New
Zealand;
|
· |
$2.8
million in cash used to purchase the 50% share that we did not already
own
of the Palms joint venture cinema located in Christchurch, New
Zealand;
|
· |
$4.5
million in cash used to complete the Newmarket property and for property
enhancements to our Australia, New Zealand and U.S.
properties;
|
· |
$2.9
million of cash used to pay down long-term debt which was primarily
related the final payoff of the Movieland purchase note payable of
approximately $512,000, to payoff the Palms - Christchurch Cinema
bank
debt of approximately $1.9 million, and we
made the first principal payment on our
Australian Corporate Credit Facility
of
$280,000;
|
· |
$792,000
of cash used to repurchase the Class A Nonvoting Common Stock (these
shares were previously issued to the Movieland sellers who exercised
their
put option during the 2006 Six Months to sell back to us the shares
they
had received in partial consideration for the sale of the Movieland
cinemas);
|
· |
$1.8
million paid for Malulani Investments, Ltd. stock;
and
|
· |
$1.5
million in distributions to minority
interests.
|
· |
impairment
of long-lived assets, including goodwill and intangible
assets;
|
· |
tax
valuation allowance and obligations; and
|
· |
legal
and environmental obligations.
|
· |
contractual
obligations;
|
· |
insurance
claims;
|
· |
IRS
claims;
|
· |
employment
matters; and
|
· |
anti-trust
issues.
|
·
|
With
respect to our cinema operations:
|
o
|
The
number and attractiveness to movie goers of the films released
in future
periods;
|
o
|
The
amount of money spent by film distributors to promote their motion
pictures;
|
o
|
The
licensing fees and terms required by film distributors from motion
picture
exhibitors in order to exhibit their
films;
|
o
|
The
comparative attractiveness of motion pictures as a source of entertainment
and willingness and/or ability of consumers (i) to spend their
dollars on
entertainment and (ii) to spend their entertainment dollars on
movies in
an outside the home environment;
and
|
o
|
The
extent to which we encounter competition from other cinema exhibitors,
from other sources of outside of the home entertainment, and from
inside
the home entertainment options, such as “home theaters” and competitive
film product distribution technology such as, by way of example,
cable,
satellite broadcast, DVD and VHS rentals and sales, and so called
“movies
on demand;”
|
·
|
With
respect to our real estate development and operation
activities:
|
o
|
The
rental rates and capitalization rates applicable to the markets
in which
we operate and the quality of properties that we
own;
|
o
|
The
extent to which we can obtain on a timely basis the various land
use
approvals and entitlements needed to develop our
properties;
|
o
|
The
availability and cost of labor and
materials;
|
o
|
Competition
for development sites and tenants;
and
|
o
|
The
extent to which our cinemas can continue to serve as an anchor
tenant
which will, in turn, be influenced by the same factors as will
influence
generally the results of our cinema operations;
and
|
·
|
With
respect to our operations generally as an international company
involved
in both the development and operation of cinemas and the development
and
operation of real estate; and previously engaged for many years
in the
railroad business in the United
States:
|
o
|
Our
ongoing access to borrowed funds and capital and the interest that
must be
paid on that debt and the returns that must be paid on such
capital;
|
o
|
The
relative values of the currency used in the countries in which
we
operate;
|
o
|
Changes
in government regulation, including by way of example, the costs
resulting
from the implementation of the requirements of
Sarbanes-Oxley;
|
o
|
Our
labor relations and costs of labor (including future government
requirements with respect to pension liabilities, disability insurance
and
health coverage, and vacations and
leave);
|
o
|
Our
exposure from time to time to legal claims and to uninsurable risks
such
as those related to our historic railroad operations, including
potential
environmental claims and health related claims relating to alleged
exposure to asbestos or other substances now or in the future recognized
as being possible causes of cancer or other health related
problems;
|
o
|
Changes
in future effective tax rates and the results of currently ongoing
and
future potential audits by taxing authorities having jurisdiction
over our
various companies; and
|
o
|
Changes
in applicable accounting policies and
practices.
|
·
|
It
is based on a single point in time.
|
·
|
It
does not include the effects of other complex market reactions that
would
arise from the changes modeled.
|
31.1
|
Certification
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed
herewith.
|
31.2
|
Certification
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed
herewith.
|
32
|
Certifications
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed
herewith.
|
Date:
|
August
7, 2006
|
By:
|
/s/
James J. Cotter
|
James
J. Cotter
|
|||
Chief
Executive Officer
|
Date:
|
August
7, 2006
|
By:
|
/s/
Andrzej Matyczynski
|
Andrzej
Matyczynski
|
|||
Chief
Financial Officer
|
1) |
I
have reviewed this quarterly report on Form 10-Q of Reading International
Inc.;
|
2) |
Based
on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to
make the statements made, in light of the circumstances under which
such
statements were made, not misleading with respect to the period covered
by
this quarterly report;
|
3) |
Based
on my knowledge, the financial statements, and other financial information
included in this quarterly report, fairly present in all material
respects
the financial condition, results of operations and cash flows of
the
registrant as of, and for, the periods presented in this quarterly
report;
|
4) |
The
registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and we
have:
|
a) |
designed
such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is
being
prepared;
|
b) |
designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision,
to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with general accepted accounting
principles;
|
c) |
evaluated
the effectiveness of the registrant's disclosure controls and procedures
as of the end of the period covered by this report based on such
evaluation; and
|
d) |
presented
in this quarterly report our conclusions about the effectiveness
of the
disclosure controls and procedures based on our evaluation as of
the
Evaluation Date;
|
5) |
The
registrant's other certifying officer and I have disclosed, based
on our
most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing
the
equivalent function):
|
a) |
all
significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record,
process,
summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls;
and
|
b) |
any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
|
6) |
The
registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in
internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
|
By:
|
/s/
James J. Cotter
|
James
J. Cotter
|
|
Chief
Executive Officer
|
|
August
7, 2006
|
1) |
I
have reviewed this quarterly report on Form 10-Q of Reading International
Inc.;
|
2) |
Based
on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to
make the statements made, in light of the circumstances under which
such
statements were made, not misleading with respect to the period covered
by
this quarterly report;
|
3) |
Based
on my knowledge, the financial statements, and other financial information
included in this quarterly report, fairly present in all material
respects
the financial condition, results of operations and cash flows of
the
registrant as of, and for, the periods presented in this quarterly
report;
|
4) |
The
registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and we
have:
|
a) |
designed
such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is
being
prepared;
|
b) |
designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision,
to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with general accepted accounting
principles;
|
c) |
evaluated
the effectiveness of the registrant's disclosure controls and procedures
as of the end of the period covered by this report based on such
evaluation; and
|
d)
|
presented
in this quarterly report our conclusions about the effectiveness
of the
disclosure controls and procedures based on our evaluation as of
the
Evaluation Date;
|
5) |
The
registrant's other certifying officer and I have disclosed, based
on our
most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing
the
equivalent function):
|
a) |
all
significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record,
process,
summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls;
and
|
b) |
any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
|
6) |
The
registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in
internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
|
By:
|
/s/
Andrzej Matyczynski
|
Andrzej
Matyczynski
|
|
Chief
Financial Officer
|
|
August
7, 2006
|
· |
The
Quarterly Report of the Company on Form 10-Q for the period ended
June 30,
2006 as filed with the Securities and Exchange Commission fully complies
with the requirements of Section 13(a) and 15(d), as applicable,
of the
Securities Exchange Act of 1934;
and
|
· |
The
information contained in such report fairly presents, in all material
respects, the financial condition and results of operation of the
Company.
|