UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date
of
report (Date of earliest event reported): August
9, 2006
Reading
International, Inc.
(Exact
Name of Registrant as Specified in its Charter)
|
Nevada
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1-8625
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95-3885184
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File
Number)
|
(IRS
Employer
Identification
No.)
|
|
500
Citadel Drive, Suite 300, Commerce, California
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90040
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(Address
of Principal Executive Offices)
|
(Zip
Code)
|
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Registrant's
telephone number, including area code (213)
235-2240
N/A
(Former
Name or Former Address, if Changed Since Last Report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
|
¨
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Item
2.02. Results of Operations and Financial Condition.
On
August
9, 2006, Reading International, Inc. issued a press release announcing
information regarding its results of operations and financial condition for
the
quarter ended June 30, 2006, a copy of which is attached as Exhibit
99.1.
Item
9.01. Financial Statements and Exhibits.
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99.1
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Press
release issued by Reading International, Inc. pertaining to its results
of
operations and financial condition for the quarter ended June 30,
2006.
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-1-
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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READING
INTERNATIONAL, INC.
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||
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Date:
August 9, 2006
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By:
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/s/
Andrzej Matyczynski
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Name:
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Andrzej
Matyczynski
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Title:
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Chief
Financial Officer
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-2-
EXHIBIT
99.1
Reading
International Announces 2nd
Quarter 2006 Results
| · |
Revenue
from continuing operations was up
12.5%
over the 2005 quarter, to $28.0
million
|
Los
Angeles, California, - (PR NEWSWIRE) - August 09, 2006 -
Reading
International, Inc. (AMEX: RDI) announced today results for its quarter and
six
months ended June 30, 2006.
Second
Quarter 2006 Summary
Our
quarter to quarter results of operations
were
principally impacted by the following:
| · |
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,
an approximately 100,000 square foot retail center in a suburb of
Brisbane, Australia;
|
| · |
The
opening on October 20, 2005, and the acquisition effective February
23,
2006, of cinemas in a suburb of Adelaide, Australia and Queenstown,
New
Zealand, respectively;
|
| · |
The
acquisition, effective April 01, 2006 of the remaining 50% share
that we
did not already own of the Palms cinema located in Christchurch,
New
Zealand;
|
| · |
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;
|
| · |
Revenue
from continuing operations, despite negative currency effects, grew
by
12.5% to $28.0 million compared to the 2005 quarter of $24.9 million;
|
| · |
Net
loss was $234,000 for the three months ending June 30, 2006 compared
to a
net income of $10.5 million (including a one time gain on disposal
of
business operations of $13.6 million) for the same period in 2005;
and
|
| · |
Reported
EBITDA (1)
at
$5.0 million for the 2006 quarter was down 65.5% from the $14.5 million
(including the aforementioned a one time gain on disposal of business
operations of $13.6 million) in the 2005
quarter.
|
|
|
-1-
Second
Quarter 2006 Discussion
Revenue
from continuing operations increased from $24.9 million in the 2005 quarter
to
$28.0 million in 2006, a 12.5% increase despite overall negative currency
effects. The cinema revenue increase of $3.0 million was across our geographical
spectrum with Australia $1.5 million higher than last year, New Zealand $1.0
million higher than last year and the US $517,000 higher. The top 3 grossing
films in our circuit worldwide were “Ice
Age 2: The Meltdown”, “The Da Vinci Code” and“X-Men:
The Last Stand” which
between them accounted for approximately 26% of our cinema box office revenue.
Our real estate revenue was slightly higher than last year with Australia
showing good rental stream growth, $389,000 higher than last year (predominantly
attributable to Newmarket), offset by the US, which was down by approximately
$219,000 due primarily to decreases in our live theater income from the 2005
quarter.
As
a
percent of revenue, operating expense, at 74.9% in the 2006 quarter was
basically flat with the first quarter 2006, but significantly better than the
79.3% of the 2005 quarter. The primary driver for the better performance in
2006
versus 2005, was the lackluster 2005 product offering, which resulted in shorter
play times and higher cost ratios.
Depreciation
and amortization expense increased by $334,000 or 11.1%, from $3.0 million
to
$3.3 million in the 2006 quarter, predominantly due to additional Australian
depreciation as a result of the opening of the Newmarket shopping center,
located in Brisbane, in late December 2005 and the Elizabeth cinema, located
in
Adelaide, which opened in October 2005.
General
and administrative expense decreased by $1.0 million or 25.6%, from $4.1 million
to $3.1 million in the 2006 quarter. This change was primarily due to a decrease
in our legal expenses specifically relating to our US anti-trust litigation
and
our purchase of the Cinemas 1, 2, 3 which decreased the amount of rent paid
to
related parties.
The
other
significant drivers that affected the 2006 quarter compared to the 2005
quarter
were:
| · |
the
increase in net interest expense. Net interest expense increased
by
$803,000 primarily related to a higher outstanding loan balance
in
Australia and due to the effective completion of construction of
our
Newmarket Shopping Centre in December 2005 (at which point we ceased
to
capitalize interest expense on our $24.2 million construction loan),
offset by a decrease in interest expense adjustment in the 2006
quarter
related to the mark-to-market adjustment of our interest rate swaps
compared to the adjustment for the same period in 2005;
|
| · |
the
increase in other income. Other income increased by $463,000 primarily
due
to the recognition of $918,000 of profit on the closing of the
sales of 11
out of 67 units of our Place 57 development in New York, in which
we have
a 25% interest ; offset by $275,000 of a mark-to-market charge
relating to
the Sutton Hill Capital LLC option (SHC Option) to acquire a 25%
non-managing membership interest in the limited liability company
in which
we hold our fee interest in our Cinemas 1, 2 & 3 property;
and
|
-2-
| · |
the
effect of income from discontinued operations. In the 2005 quarter
we
recognized a gain on the sale of assets of $13.6 million, which
was not
repeated in the 2006 quarter.
|
As
a
result of the above, we reported a net loss of $234,000 for the 2006 quarter
compared to a net income of $10.5 million in the 2005
quarter.
Our
EBITDA (1)
at $5.0
million for the 2006 quarter was $9.5 million lower than the 2005 quarter of
$14.5 million, predominantly driven by the gain on the sale of assets in the
2005 quarter of $13.6 million. Allowing
for this asset sale in 2005, the 2006 quarter EBITDA (1)
from
continuing operations, of $5.0 million is $4.1 million or 445.1% higher then
that of the 2005 quarter.
First
Half 2006 Summary
| · |
Revenue
from continuing operations increased by 7.0% or $3.5 million, to
$53.9
million in the first half 2006 compared to 2005, while the operating
expense percentage decreased to 75.2% in 2006 compared to 77.2% in
the
2005 half-year. The primary driver for this was the lackluster film
product in the 2005 quarter as described above in the quarter
discussion.
|
| · |
The
top 5 grossing films in our circuit worldwide for the 2006 half-year
were:
“Ice
Age 2: The Meltdown”, “The Da Vinci Code”, “The Chronicles of Narnia: The
Lion, the Witch and the Wardrobe”, “X-Men: The Last Stand” and
“Cars”, which
between them accounted for approximately 20% of our cinema box office
revenue.
|
| · |
Depreciation
and amortization increased by $411,000 to $6.6 million in 2006, driven
primarily by the Australian shopping center and cinema
additions.
|
| · |
General
and administrative expense declined by $1.4 million to $6.5 million
in the
2006 period. This decrease was due to the decrease in rent and legal
expenses.
|
| · |
Interest
expense increased by $1.7 million to $3.3 million in 2006, due to
the
cessation of interest capitalization on the Newmarket project partially
offset by interest rate swap mark-to-market
fluctuations.
|
| · |
Other
income decreased by $359,000 to $520,000 in 2006, primarily due to
the
profit recognition on Place 57, offset by the mark-to-market of the
SHC
Option.
|
| · |
Income
from discontinued operations at $12.2 million in 2005 was driven
by the
above discussed gain on sale of $13.6
million.
|
As
a
result we reported a net loss of $3.4 million for the 2006 half year compared
to
a net income of $8.1 million in the 2005 half year.
Our
reported EBITDA
(1)
at $7.2
million for the half year 2006 was $9.7 million lower than the $16.9 million
of
the 2005 half year. Adjusting
for the $13.6 million gain on sale of assets in the 2005 half-year, our
EBITDA
(1)
from continuing operations in the 2006 half-year was $3.9 million or 120.2%
higher than the 2005 half-year.
-3-
Balance
Sheet
Our
total
assets at June 30, 2006 were $254.0 million and remained basically flat with
December 31, 2005. The currency exchange rates for Australia and New Zealand
as
of June 30, 2006 were $0.7423 and $0.6105, respectively, and as of December
31,
2005, these rates were $0.7342 and $0.6845, respectively. As a result, currency
had an overall negative impact on the balance sheet at June 30, 2006 compared
to
December 31, 2005.
Our
cash
position at June 30, 2006 was $6.1 million compared to $8.5 million at December
31, 2005. The majority of the $2.4 million change related to cash invested
of
$1.8 million in Malulani Investments, Ltd. to acquire an 18.4% interest in
a
private real estate company with holdings principally in California, Texas,
and
Hawaii.
At
the
present time we have approximately $8.5 million in undrawn funds under our
Australian Corporate Credit Facility. Accordingly, we believe that we have
sufficient borrowing capacity under our corporate facility from our Australian
bank, to meet our anticipated short-term working capital requirements. Our
negative working capital at $14.5 million compares to $14.3 million at December
31, 2005. Negative working capital is typical in the cinema industry, due to
the
lag time between the collection of box office and concession receipts and the
payment of film distributors and vendors.
Requiring
estimated funding of approximately $500.0 million, our development in Burwood,
Australia will clearly not be funded from normal working capital even in a
phased approach. We have approached several financing sources who have already
given a favorable response to the prospect of this funding. However, we continue
to investigate all options available to us including debt financing, equity
financing, and joint venture partnering to achieve the optimal financing
structure for this most significant development.
Stockholders’
equity was $94.4 million at June 30, 2006 compared to $99.4 million at December
31, 2005.
Real
Estate Update
205-209
East 57th
Street Associates, LLC -
We
currently have a $4.1 million investment in 205-209 East 57th
Street
Associates, LLC (“57th
Street
Associates”). Construction is virtually complete and includes the lobby and
amenity areas. The managing member of 57th
Street
Associates reports that it now has under contract 63 out of 67 units,
representing 94% of total units, at an average selling price of $1,341 per
square foot an increase of $241 per square foot (21.9%) from the project’s
budget. Of these 63 contracts, 11 units closed during the June quarter. As
reported above, in the June quarter we recognized our share of the profit on
the
closure of 11 out of the 63 sold units ($918,000 to date), the remaining 4
units
being out-to-contract. We currently anticipate that the remainder of the units
under contract will be closed before the end of the year. The unit sales
currently being closed relate to the units on the lower stories of the property,
and may reflect less profit than the more expensive upper units.
Newmarket
Shopping Centre
- On
November 28, 2005, we opened the initial retail elements of our Newmarket ETRC,
an approximately 100,000 square foot retail facility situated on an
approximately 177,500 square foot parcel in Newmarket, a suburb of Brisbane.
The
remaining tenants took-up their occupancy during the first quarter of 2006.
We
are currently in the planning phase relating to stage two of this entertainment
themed retail centre (or “ETRC”) which is to include a 6 screen cinema complex.
The design for the anticipated 33,067 square foot cinema component is currently
before the Newmarket City Council for approval.
-4-
Subsequent
Events
Berkeley
Cinemas
On
May
23, 2006, our Joint Venture Partner exercised his option to offer to acquire
our
interest in the remaining Berkeley Joint Venture cinemas, at an aggregate
purchase price of $7.3 million (NZ$11.9 million) plus the assumption of debt
of
$3.0 million (NZ$5.0 million). The exercise of this option has triggered our
right to buy out our Joint Venture Partner at the same price. On July 27, 2006,
we gave notice to our Joint Venture Partner that we do not intend to exercise
our right to acquire the cinemas at Whangaparaoa, Takapuna and Mission Bay,
and
accordingly, we currently anticipate that we will sell our interest in those
cinemas to our Joint Venture Partner for $4.4 million (NZ$7.2 million) in cash
and the assumption of $1.5 million (NZ$2.5 million) in debt. We are currently
still considering whether to exercise our right to acquire our Joint Venture
partner’s interest in the Botany Downs cinema. If we exercise that right, the
cost to acquire the 50% interest that we do not already own in that cinema
would
be $2.9 million (NZ$4.7 million) plus the assumption of debt estimated to be
approximately $1.5 million (NZ$2.5 million) as of the closing date.
Moonee
Ponds
On
June
21, 2006, we signed an agreement to purchase two tracks of land of 0.4 acres
adjacent to our Moonee Ponds property for $2.4 million (AUS$3.3 million). As
a
partial fulfillment of this contract, on July 7, 2006, we made a $245,000
(AUS$330,000) deposit for these properties and we anticipate closing on these
purchases during the month of September 2006.
About
Reading International, Inc.
Reading
International (http://www.readingrdi.com)
is in
the business of owning and operating cinemas and developing, owning and
operating real estate assets. Our business consists primarily of:
| · |
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 theater assets in Manhattan and Chicago in the United
States.
|
Reading
manages its worldwide cinema business under various different
brands:
| · |
in
the United States, under the
|
| o |
Reading
brand,
|
| o |
Angelika
Film Center brand (http://angelikafilmcenter.com/),
and
|
| o |
City
Cinemas brand (http://citycinemas.moviefone.com/);
|
| · |
in
Australia, under the Reading brand (http://www.readingcinemas.com.au/);
and
|
| · |
in
New Zealand, under the
|
| o |
Reading
(http://www.readingcinemas.co.nz),
|
-5-
| o |
Rialto
(http://www.rialto.co.nz),
and
|
| o |
Berkeley
Cinemas (http://www.berkeleycinemas.co.nz/)
brands.
|
Our
statements in this press release contain a variety of forward-looking statements
as defined by the Securities Litigation Reform Act of 1995. Forward-looking
statements reflect only our expectations regarding future events and operating
performance and necessarily speak only as of the date the information was
prepared. No guarantees can be given that our expectation will in fact be
realized, in whole or in part. You can recognize these statements by our use
of
words such as, by way of example, “may,” “will,” “expect,” “believe,” and
“anticipate” or other similar terminology.
These
forward-looking statements reflect our expectation after having considered
a
variety of risks and uncertainties. However, they are necessarily the product
of
internal discussion and do not necessarily completely reflect the views of
individual members of our Board of Directors or of our management team.
Individual Board members and individual members of our management team may
have
different view as to the risks and uncertainties involved, and may have
different views as to future events or our operating
performance.
Among
the factors that could cause actual results to differ materially from those
expressed in or underlying our forward-looking statements are the
following:
| · |
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;
|
| · |
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:
|
-6-
| 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.
|
The
above list is not necessarily exhaustive, as business is by definition
unpredictable and risky, and subject to influence by numerous factors outside
of
our control such as changes in government regulation or policy, competition,
interest rates, supply, technological innovation, changes in consumer taste
and
fancy, weather, and the extent to which consumers in our markets have the
economic wherewithal to spend money on beyond-the-home
entertainment.
Given
the variety and unpredictability of the factors that will ultimately influence
our businesses and our results of operation, it naturally follows that no
guarantees can be given that any of our forward-looking statements will
ultimately prove to be correct. Actual results will undoubtedly vary and there
is no guarantee as to how our securities will perform either when considered
in
isolation or when compared to other securities or investment
opportunities.
Finally,
please understand that we undertake no obligation to publicly update or to
revise any of our forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required under
applicable law. Accordingly, you should always note the date to which our
forward-looking statements speak.
Additionally,
certain of the presentations included in this press release may contain “pro
forma” information or “non-US
GAAP financial measures.” In such case, a reconciliation of this information to
our US GAAP financial statements will be made available in connection with
such
statements.
For
more
information, contact:
Andrzej
Matyczynski, Chief Financial Officer
Reading
International, Inc. (213) 235 2240
[TABLES
FOLLOW]
-7-
Reading
International, Inc. and Subsidiaries
Supplemental
Data
Reconciliation
of EBITDA to Net Loss (Unaudited)
(dollars
in thousands, except per share amounts)
|
Statements
of Operations
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|||||||||||
|
2006
|
2005
|
2006
|
2005
|
||||||||||
|
Revenue
|
$
|
27,961
|
$
|
24,853
|
$
|
53,898
|
$
|
50,377
|
|||||
|
Operating
expense
|
|||||||||||||
|
Cinema/real
estate
|
20,943
|
19,697
|
40,532
|
38,899
|
|||||||||
|
Depreciation
and amortization
|
3,337
|
3,003
|
6,577
|
6,166
|
|||||||||
|
General
and administrative
|
3,076
|
4,132
|
6,441
|
7,879
|
|||||||||
|
Operating
income (loss)
|
605
|
(1,979
|
)
|
348
|
(2,567
|
)
|
|||||||
|
Interest
expense, net
|
(1,511
|
)
|
(708
|
)
|
(3,295
|
)
|
(1,574
|
)
|
|||||
|
Other
income
|
1,208
|
745
|
520
|
879
|
|||||||||
|
Income
from discontinued operations
|
--
|
12,943
|
--
|
12,231
|
|||||||||
|
Income
tax expense
|
(344
|
)
|
(220
|
)
|
(681
|
)
|
(453
|
)
|
|||||
|
Minority
interest expense
|
(192
|
)
|
(281
|
)
|
(272
|
)
|
(419
|
)
|
|||||
|
Net
income (loss)
|
$
|
(234
|
)
|
$
|
10,500
|
$
|
(3,380
|
)
|
$
|
8,097
|
|||
|
Basic
earnings (loss) per share
|
$
|
(0.01
|
)
|
$
|
0.48
|
$
|
(0.15
|
)
|
$
|
0.37
|
|||
|
Diluted
earnings (loss) per share
|
$
|
(0.01
|
)
|
$
|
0.48
|
$
|
(0.15
|
)
|
$
|
0.37
|
|||
|
EBITDA*
|
4,958
|
14,520
|
7,173
|
16,858
|
|||||||||
|
EBITDA*
change
|
(9,562)
|
(9,685)
|
|||||||||||
* EBITDA
presented above is net loss adjusted for interest expense (net of interest
income), income tax expense, depreciation and amortization expense, and an
adjustment for discontinued operations (this includes interest expense and
depreciation and amortization for the discontinued operations).
Reconciliation
of EBITDA to the net loss is presented below:
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
||||||||||||
|
2006
|
2005
|
2006
|
2005
|
||||||||||
|
Net
income (loss)
|
$
|
(234
|
)
|
$
|
10,500
|
$
|
(3,380
|
)
|
$
|
8,097
|
|||
|
Add: Interest
expense, net
|
1,511
|
708
|
3,295
|
1,574
|
|||||||||
|
Add: Income
tax provision (benefit)
|
344
|
220
|
681
|
453
|
|||||||||
|
Add: Depreciation
and amortization
|
3,337
|
3,003
|
6,577
|
6,166
|
|||||||||
|
Add:
EBITDA adjustment for discontinued operations
|
--
|
89
|
--
|
568
|
|||||||||
|
EBITDA
|
$
|
4,958
|
$
|
14,520
|
$
|
7,173
|
$
|
16,858
|
|||||
-8-
Reading
International, Inc. and Subsidiaries
Consolidated
Statements of Operations (Unaudited)
(U.S.
dollars in thousands,
except per share amounts)
|
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
|
|||||||||
-9-
Reading
International, Inc. and Subsidiaries
Consolidated
Balance Sheets (Unaudited)
(U.S.
dollars in thousands)
|
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
|
|||
(1)
The
Company defines EBITDA as net income (loss) before net interest expense,
income
taxes, depreciation, and amortization. EBITDA is presented solely as a
supplemental disclosure as we believe it to be a relevant and useful measure
to
compare operating results among our properties and competitors, as well
as a
measurement tool for evaluation of operating personnel. EBITDA is not a
measure
of financial performance under the promulgations of generally accepted
accounting principles (“GAAP”). EBITDA should not be considered in isolation
from, or as a substitute for, net loss, operating loss or cash flows from
operations determined in accordance with GAAP. Finally, EBITDA is not calculated
in the same manner by all companies and accordingly, may not be an appropriate
measure for comparing performance amongst different companies. See the
“Supplemental Data” table attached for a reconciliation of EBITDA to net income
(loss).
-10-