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): March
30, 2007
Reading
International, Inc.
(Exact
Name of Registrant as Specified in its Charter)
|
Nevada
|
|
1-8625
|
|
95-3885184
|
|
(State
or Other Jurisdiction
of
Incorporation)
|
|
(Commission
File
Number)
|
|
(IRS
Employer
Identification
No.)
|
|
500
Citadel Drive, Suite 300, Commerce,
California
|
|
90040
|
||
|
(Address
of Principal Executive Offices)
|
|
(Zip
Code)
|
||
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:
|
¨
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
|
¨
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
¨
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
|
|
¨
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
|
Item
2.02. Results of Operations and Financial Condition.
On
March
30, 2007, Reading International, Inc. issued a press release announcing
information regarding its results of operations and financial condition for
the
year ended December 31, 2006, a copy of which is attached as Exhibit
99.1.
Item
9.01. Financial Statements and Exhibits.
|
99.1
|
Press
release issued by Reading International, Inc. pertaining to its results
of
operations and financial condition for the year ended December 31,
2006.
|
-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.
|
|
|
READING
INTERNATIONAL, INC.
|
||
|
Date:
March 30, 2007
|
|
By:
|
|
/s/
Andrzej Matyczynski
|
|
|
|
Name:
|
|
Andrzej
Matyczynski
|
|
|
|
Title:
|
|
Chief
Financial Officer
|
-2-
Reading
International Announces 2006 Results
| · |
Revenue
from continuing operations for the year was up
8.2%
over 2005, to $106.1
million
|
| · |
Net
Income for
the year was up
289.9%
over 2005, to $3.9
million
|
| · |
EBITDA
(1)as
reported for the year was
$25.9
million up 32.2%, compared
to $19.6
million
in
2005
|
Los
Angeles, California, - (PR NEWSWIRE) -March 30, 2007 -
Reading
International, Inc. (AMEX: RDI) announced today results for its year and fourth
quarter ended December 31, 2006.
Twelve
Month 2006 Highlights
Consistent
with our business philosophy to be opportunistic in our cinema acquisitions
and
to focus on modern stadium design mainstream cinemas, we
have:
| · |
in
working towards a consolidation and rationalization of our holdings,
sold
to our joint venture partner (Everard Entertainment) our 50% joint
venture
interests in three mainstream cinemas (aggregating 13 screens) operated
under the “Berkeley” name in suburban Auckland, New Zealand and acquired
from Everard Entertainment its 50% interest in our joint venture cinema
(8
screens) in Christchurch, New Zealand, effectively exchanging our 50%
interest in three older conventional cinemas for our joint venture
partner’s interest in a modern stadium design multiplex;
|
| · |
entered
into a contract to acquire the long-term ground lease interest underlying
our Tower Theater in Sacramento, California (the principal art cinema
in
Sacramento);
|
| · |
refurbished,
expanded and reopened the Rialto art cinema in Auckland, in which we
have
a 50% unconsolidated joint venture interest with SkyCity Leisure Ltd.
This
Rialto cinema is the premier art house in New
Zealand;
|
| · |
entered
into agreements for lease with respect to two new 8 screen cinemas
currently under development in regional shopping centers located in
fast
growing residential areas in Australia. It is anticipated that these
cinemas will open in the first quarters of 2008 and 2010. One of these
agreements to lease was executed in 2006. The other in February 2007;
|
| · |
obtained
the final governmental approvals required for the construction of the
approximately 33,000 square foot six-screen cinema component of our
Newmarket ETRC; and
|
| · |
acquired
an existing 3-screen leasehold cinema in Queenstown, New Zealand (the
only
cinema in this premier New Zealand mountain resort
community).
|
(1)
The Company defines EBITDA as net
income (loss) before net interest expense, income tax benefit, 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).
-1-
and
with respect to the expansion of the real estate side of our
business:
| · |
obtained
final approval for the rezoning of our 50.6 acre Burwood property from
an
essentially industrial use to a mixed retail, entertainment, commercial
and residential use;
|
| · |
completed
construction and lease-up of the retail components of our Newmarket
ETRC;
|
| · |
completed
the assemblage of two additional parcels of land, totaling 0.4 acres,
into
our existing Moonee Ponds property. This acquisition increases our
holdings at Moonee Ponds (a suburb of Melbourne) to 3.3 acres and gives
us
frontage facing the principal transit station servicing the area;
|
| · |
formed
Landplan Property Partners, Ltd (“Landplan”) to identify, acquire and
develop or redevelop properties in Australia and New Zealand on an
opportunistic basis. Through March 14, 2007, we have acquired two such
properties, one in Australia and one in New Zealand, for a total
investment of approximately $6.7 million;
|
| · |
acquired
for $1.8 million, an 18.4% equity interest in Malulani Investments,
Limited (“MIL”), a closely held Hawaiian company which currently owns
approximately 763,000 square feet of developed commercial real estate
principally in California, Hawaii and Texas, and approximately 22,000
acres of agricultural land in Northern California. Included among MIL’s
assets is the Guenoc Winery, consisting of approximately 400 acres
of
vineyard land and a winery equipped to bottle up to 120,000 cases of
wine
annually. This land and commercial real estate holdings are encumbered
by
debt.; and
|
| · |
through
December 31, 2006 completed the sale of 59 out of 67 residential units
comprising our Place 57 residential condominium tower in Manhattan,
in
which we own a 25% interest (an additional 5 units having closed during
the period from January 1, 2007 to March 14, 2007).
|
which
resulted in:
| · |
revenue
growth of 8.2% to $106.1 million, compared to $98.1 million in
2005;
|
| · |
recognition
of $8.3 million in earnings from our 25% interest in the Place 57.
Our
total investment in this project was $3.0
million;
|
| · |
recognition
of a $3.4 million gain on the sale of our 50% interest in 3 cinemas
in
Auckland, New Zealand to our joint venture
partner;
|
| · |
net
income for the 2006 year of $3.9 million compared to $1.0 million in
2005,
an increase of 289.9%; and
|
| · |
EBITDA
(1)
of
$25.9 million in 2006 compared to $19.6 million in 2005, an increase
of
32.2%.
|
Fourth
Quarter 2006 Highlights
| · |
entered
into a contract to acquire the long-term ground lease interest underlying
our Tower Theater in Sacramento, California (the principal art cinema
in
Sacramento);
|
| · |
entered
into an agreement for lease with respect to a new 8 screen cinema
currently under development in a regional shopping center located in
a
fast growing residential area in Australia. It is anticipated that
this
cinema will open in the first quarter of 2008. An additional agreement
for
lease was entered into in February 2007 for another similarly situated
8
screen cinema, scheduled for opening in the first quarter of 2010;
|
-2-
| · |
revenue
from continuing operations at $27.2 million increased 18.6% compared
to
$22.9 million in Q4 2005;
|
| · |
recognized
$2.3 million in earnings from our 25% interest in the Place 57 mixed-use
condominium development in Manhattan;
|
| · |
net
income for the quarter at $1.1 million was $3.7 million better than
the
$2.5 million loss reported in the 2005 quarter;
|
| · |
EBITDA
(1)
at
$7.0 million was 223.4% higher than the $2.2 million reported in the
2005
quarter; and
|
| · |
adjusted
EBITDA at $5.9 million for the quarter was the best since our business
combination on December 31, 2001.
|
On
February 5, 2007, we closed a $50.0 million private placement of 20-year
maturity trust preferred securities. These securities were issued by an
affiliate, and is similar to Reading International Inc. issuing $50.0 million
in
fully subordinated debt. There are no principal payments until maturity in
2027
when the notes are paid in full. We have elected to fix the interest rate on
this subordinated debt at 9.22% for five years, and intend to monitor interest
rates over this period with the intention of purchasing swap positions to
protect against long term exposure to interest rate fluctuations with respect
to
this security. The net proceeds of $48.4 million have been used primarily to
retire bank debt in New Zealand and Australia.
Fourth
Quarter 2006 Discussion
Revenue
from continuing operations (all information relating to sold assets is included
in the tables that follow under the headings marked “gain on disposal of
business operations,” “loss from discontinued operations” and “adjustment for
discontinued operations,” including prior year data which has been restated)
increased from $22.9 million in Q4 2005 to $27.2 million in 2006, an 18.6%
increase or $4.3 million. The cinema revenue increase of $3.3 million was
predominantly due to Australia ($2.0 million higher than last year) and the
U.S.
($1.2 million higher than last year), where higher admissions were driven by
improved film product. This improved product offering included “Borat,”
“The Departed,” “Casino Royale” and“The
Queen.”
The
increase in real estate revenue was predominantly in Australia ($1.0 million
higher than last year), which was driven by the rental income from the retail
portion of our Newmarket ETRC, opened in early 2006.
Operating
expense continued to be managed in line with revenue growth.
Depreciation
and amortization was up $274,000 or 9.2%, from $3.0 million to $3.2 million
for
the 2006 quarter. This increase reflects the acquisitions in New Zealand of
the
Queenstown cinema in February 2006 and the Palms cinema in April 2006 and
commencement in January 2006 of the use of the retail portions of our Newmarket
ETRC.
General
and administrative expense decreased by $266,000 or 7.1%, from $3.8 million
to
$3.5 million in the 2006 quarter. This was mainly due to the reduction in the
litigation costs related to our U.S. antitrust litigation. That litigation
is
now at an end.
The
other
significant driver that affected the 2006 quarter compared to the 2005 quarter
was the increase in other income of $1.2 million. This was primarily due to
earnings from Place 57 of $2.3 million offset by a $1.2 million charge for
claims related to the use by third parties of counterfeit credit cards. The
issues surrounding that credit card situation have now been addressed and we
are
currently reviewing our options to recoup all or substantially all of this
charge.
-3-
As
a
result of the above, we reported a net income of $1.1 million for the 2006
quarter compared to a loss of $2.5 million in the 2005 quarter.
Our
EBITDA (1)
at $7.0
million for the 2006 quarter was $4.8 million higher than the 2005 quarter
of
$2.2 million, predominantly driven by better operating margins, general and
administrative expense reductions and the Place 57 profit recognition, offset
by
the counterfeit credit card charge. Allowing
for these last two items, the 2006 quarter EBITDA (1)
of $5.9 million was still $3.7 million higher than the $2.2 million of the
2005
quarter.
Twelve
Month 2006 Summary
| · |
Revenue
from continuing operations increased by 8.2% or $8.0 million, to $106.1
million in the twelve months of 2006 compared to 2005. This increase
was
driven by strong circuit showings of “Pirates
of the Caribbean: Dead Man’s Chest”,
“Ice
Age 2: The Meltdown”,
“Borat”
and “The
Da Vinci Code.”
The U.S. $1.6 million increase, the Australian $4.1 million increase
and
the New Zealand $1.6 million increase were all predominately due to
higher
admissions related to more appealing film product availability in 2006
compared to that offered in 2005. The real estate revenue increase
of
$762,000 came predominantly from Australia where the rent from the
Newmarket ETRC retail component added approximately $2.1 million and
was
offset in the U.S. by decreased rents from live theatre rentals, which
were depressed from 2005.
|
| · |
Operating
expense continued to be managed in line with revenue
growth.
|
| · |
Depreciation
and amortization increased by $828,000 to $13.2 million in 2006 from
$12.4
million in 2005, driven primarily by the acquisitions in New Zealand
of
the Queenstown cinema and the Palms cinema as well as the opening of
the
retail component of our Newmarket ETRC in
Australia.
|
| · |
General
and administrative expense decreased by $4.3 million to $13.0 million
in
2006 from $17.3 million in the 2005 period. This decrease is predominantly
due to the reduction in litigation costs related to our U.S. antitrust
litigation. That litigation is now at an
end.
|
| · |
Interest
expense increased by $2.1 million to $6.6 million in 2006 from $4.5
in
2005, due to increased borrowings, higher interest rates and the effective
completion of the retail component of our Newmarket ETRC in early 2006,
which decreased the amount of interest that could be
capitalized.
|
| · |
Other
income increased by $6.1 million to $7.5 million in 2006 from $1.4
million
in 2005, primarily due to $8.3 million of Place 57 earnings, offset
by the
mark-to-market of the SHC Cinema 1,2,3 option of $1.6 million and the
$1.2
million potential credit card claims.
|
| · |
Income
from discontinued operations in 2006 was zero compared to $12.2 million
in
2005. This was driven by the gain on sale of assets of $13.6 million
reported for the second quarter in connection with our disposal of
both
our Puerto Rico circuit and our Glendale, California office
building.
|
| · |
The
gain on sale of unconsolidated entity of $3.4 million was due to the
sale
of our 50% interest in certain joint venture cinema assets in New Zealand.
|
-4-
| · |
Our
income tax expense increased by $1.1 million to $2.3 million in 2006
from
$1.2 million in 2005 primarily due to the tax expense incurred for
our
equity earnings from our investment in the Place 57
development.
|
As
a
result we reported a net income of $3.9 million for the 2006 twelve months
compared to $1.0 million in the 2005 twelve months.
Our
reported EBITDA (1)
at $25.9
million for the twelve months of 2006 was $6.3 million higher than the $ 19.6
million in the 2005 twelve months. Adjusting for the gain on the joint venture
sale of $3.4 million; the Place 57 earnings of $8.3 million; the SHC C1,2,3
option mark-to-market of ($1.6) million; and the potential credit card claims
of
($1.2) million, our adjusted EBITDA (1)
for 2006
was $17.0 million. Adjusting for the $13.6 million gain on sale of assets,
our
adjusted EBITDA (1)
in 2005
was $6.0 million. As
a result our EBITDA (1)
from continuing operations in the 2006 twelve months was still $11.0 million
higher than the 2005 twelve months.
Balance
Sheet
Our
total
assets at December 31, 2006 were $289.2 million compared to $253.1 million
at
December 31, 2005. The currency exchange rates for Australia and New Zealand
as
of December 31, 2006 were $0.7884 and $0.7046, respectively, and as of December
31, 2005, these rates were $0.7342 and $0.6845, respectively. As a result,
currency had a positive effect on the balance sheet at December 31, 2006
compared to December 31, 2005.
Our
cash
position at December 31, 2006 was $11.0 million compared to $8.5 million at
December 31, 2005.
On
December 15, 2006, our New Zealand Corporate Credit Facility with the Westpac
Banking Corporation was increased from $35.2 million (NZ$50.0 million) to $42.3
million (NZ$60.0 million) and the facility’s related principal payments were
deferred to begin in February 2009.
In
September 2006, we renegotiated our $78.8 million (AUS$100.0 million) Australian
Corporate Credit Facility. Under the new terms, it is unlikely that we will
be
required to make any further principal payments on the loan until the facility
comes to term on January 1, 2009.
At
December 31, 2006, we were in the process of issuing $50.0 million in trust
preferred securities through our wholly owned trust subsidiary. There are no
principal payments until maturity in 2027 when the notes are paid in full.
This
transaction closed on February 5, 2007 and we used the funds principally to
payoff our bank indebtedness in New Zealand by $34.4 million (NZ$50.0 million)
and to pay down our indebtedness in Australia by $5.8 million (AUS$7.4 million).
In New Zealand we have left in place a $42.3 million (NZ$60.0 million) line
of
credit and in Australia we have increased our borrowing ability to $10.9 million
(AUS$13.9 million).
In
addition, on December 4, 2006, we renegotiated our loan agreement secured by
our
Union Square Theatre in Manhattan from $3.2 million to $7.5 million.
Accordingly,
we believe that we have sufficient borrowing capacity under our New Zealand
and
Australian corporate facilities, to meet our anticipated short-term working
capital requirements.
Our
negative working capital at December 31, 2006 was $7.0 million compared to
$14.3
million at December 31, 2005. Negative working capital is typical in the cinema
industry, due to
-5-
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 high-level, favorable response to 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 $107.7 million at December 31, 2006 compared to $99.4 at December
31,
2005.
Subsequent
Events
Trust
Preferred Private Placement.
On
February 5, 2007 we issued $50.0 million in 20-year Trust Preferred Securities,
interest fixed for five years at 9.22%, to a trust which we control, and which
in turn issued $50.0 million in trust preferred securities in a private
placement. There are no principal payments until maturity in 2027 when the
notes
are paid in full. The trust is essentially a pass through, and the transaction
is similar to the issuance of fully subordinated notes. The placement generated
$48.4 million in net proceeds, which were used principally to retire all of
our
bank indebtedness in New Zealand $34.4 million (NZ$50.0 million) and to retire
a
portion of our bank indebtedness in Australia $5.8 million (AUS$7.4 million).
Tower
Lease Acquisition.
At
December 31, 2006, we were under contract to purchase the underlying lease
of
our Tower Cinema in Sacramento, California. The agreement called for a purchase
price of $493,000 to be paid in two installments. The first installment of
$243,000 was paid on February 8, 2007 and the second installment of $250,000
is
due on July 1, 2007.
New
Zealand Property Acquisition.
On
February 14, 2007, we acquired through Landplan Property Partners commercial
real estate of 1.0 acre in New Zealand. The acquisition of this property
constitutes an investment of approximately $4.9 million (NZ$7.1
million).
Australia
Lease Agreement.
On
February 23, 2007, we entered into an agreement to lease a site for an initial
term of 15 years in which we intend to fit-out an 8 screen cinema in a regional
shopping center located in a fast growing residential area in Australia. It
is
anticipated that this cinema will open in the first quarter of
2010.
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:
-6-
| · |
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/);
|
| · |
in
New Zealand, under the
|
| o |
Reading
(http://www.readingcinemas.co.nz),
|
| 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 views 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;
|
-7-
| 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:
|
| 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-U.S.
GAAP financial measures.” In such case, a reconciliation of this information to
our U.S. GAAP financial statements will be made available in connection with
such statements.
For
more
information, contact:
-8-
Andrzej
Matyczynski, Chief Financial Officer
Reading
International, Inc. (213) 235-2240
[TABLES
FOLLOW]
-9-
Reading
International, Inc. and Subsidiaries
Supplemental
Data
Reconciliation
of EBITDA to Net Income
(Loss) (Unaudited)
(dollars
in thousands, except per share amounts)
|
Statements
of Operations
|
Three
Months Ended
December
31,
|
Twelve
Months Ended
December
31,
|
|||||||||||
|
2006
|
2005
|
2006
|
2005
|
||||||||||
|
Revenue
|
$
|
27,184
|
$
|
22,919
|
$
|
106,125
|
$
|
98,105
|
|||||
|
Operating
expense
|
|||||||||||||
|
Cinema/real
estate
|
18,003
|
17,323
|
77,507
|
74,846
|
|||||||||
|
Depreciation
and amortization
|
3,249
|
2,975
|
13,212
|
12,384
|
|||||||||
|
General
and administrative
|
3,502
|
3,768
|
12,991
|
17,247
|
|||||||||
|
Operating
income (loss)
|
2,430
|
(1,147
|
)
|
2,415
|
(6,372
|
)
|
|||||||
|
Interest
expense, net
|
(1,548
|
)
|
(1,157
|
)
|
(6,608
|
)
|
(4,473
|
)
|
|||||
|
Other
income
|
1,557
|
354
|
7,549
|
1,391
|
|||||||||
|
Income
(loss) from discontinued operations
|
--
|
--
|
--
|
12,231
|
|||||||||
|
Gain
on sale of unconsolidated joint venture
|
--
|
--
|
3,442
|
--
|
|||||||||
|
Income
tax expense
|
(1,048
|
)
|
(566
|
)
|
(2,270
|
)
|
(1,209
|
)
|
|||||
|
Minority
interest
|
(247
|
)
|
(20
|
)
|
(672
|
)
|
(579
|
)
|
|||||
|
Net
income (loss)
|
$
|
1,144
|
$
|
(2,536
|
)
|
$
|
3,856
|
$
|
989
|
||||
|
Basic
earnings (loss) per share
|
$
|
0.05
|
$
|
(0.13
|
)
|
$
|
0.17
|
$
|
0.04
|
||||
|
Diluted
earnings (loss) per share
|
$
|
0.05
|
$
|
(0.13
|
)
|
$
|
0.17
|
$
|
0.04
|
||||
|
EBITDA*
|
$
|
6,989
|
$
|
2,161
|
$
|
25,946
|
$
|
19,622
|
|||||
|
EBITDA*
change
|
$4,828
|
$6,324
|
|||||||||||
* 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 income (loss) is presented below:
|
Three
Months Ended
December
31,
|
Twelve
Months Ended
December
31,
|
||||||||||||
|
2006
|
2005
|
2006
|
2005
|
||||||||||
|
Net
income (loss)
|
$
|
1,144
|
$
|
(2,536
|
)
|
$
|
3,856
|
$
|
989
|
||||
|
Add: Interest
expense, net
|
1,548
|
1,157
|
6,608
|
4,473
|
|||||||||
|
Add: Income
tax provision
|
1,048
|
566
|
2,270
|
1,209
|
|||||||||
|
Add: Depreciation
and amortization
|
3,249
|
2,975
|
13,212
|
12,384
|
|||||||||
|
Add:
Depreciation and interest for discontinued operations
|
--
|
(1
|
)
|
--
|
567
|
||||||||
|
EBITDA
|
$
|
6,989
|
$
|
2,161
|
$
|
25,946
|
$
|
19,622
|
|||||
-10-
Reading
International, Inc. and Subsidiaries
Consolidated
Statements of Operations for the Three Years Ended December 31,
2006
(U.S.
dollars in thousands, except per share amounts)
|
Year
Ended December 31,
|
||||||||||
|
2006
|
2005
|
2004
|
||||||||
|
Operating
revenue
|
||||||||||
|
Cinema
|
$
|
94,048
|
$
|
86,760
|
$
|
74,324
|
||||
|
Real
estate
|
12,077
|
11,345
|
9,765
|
|||||||
|
Total
operating revenue
|
106,125
|
98,105
|
84,089
|
|||||||
|
Operating
expense
|
||||||||||
|
Cinema
|
70,142
|
67,487
|
56,816
|
|||||||
|
Real
estate
|
7,365
|
7,359
|
6,948
|
|||||||
|
Depreciation
and amortization
|
13,212
|
12,384
|
11,823
|
|||||||
|
General
and administrative
|
12,991
|
17,247
|
14,824
|
|||||||
|
Total
operating expense
|
103,710
|
104,477
|
90,411
|
|||||||
|
Operating
income (loss)
|
2,415
|
(6,372
|
)
|
(6,322
|
)
|
|||||
|
Non-operating
income (expense)
|
||||||||||
|
Interest
income
|
308
|
209
|
843
|
|||||||
|
Interest
expense
|
(6,916
|
)
|
(4,682
|
)
|
(3,921
|
)
|
||||
|
Net
loss on sale of assets
|
(45
|
)
|
(32
|
)
|
(114
|
)
|
||||
|
Other
income (expense)
|
(1,953
|
)
|
51
|
998
|
||||||
|
Loss
before minority interest, discontinued operations, income tax expense
and
equity earnings of unconsolidated joint ventures and entities
|
(6,191
|
)
|
(10,826
|
)
|
(8,516
|
)
|
||||
|
Minority
interest
|
(672
|
)
|
(579
|
)
|
(112
|
)
|
||||
|
Loss
from continuing operations
|
(6,863
|
)
|
(11,405
|
)
|
(8,628
|
)
|
||||
|
Discontinued
operations:
|
||||||||||
|
Gain
on disposal of business operations
|
--
|
13,610
|
--
|
|||||||
|
Loss
from discontinued operations, net of tax
|
--
|
(1,379
|
)
|
(469
|
)
|
|||||
|
Income
(loss) before income tax expense and equity earnings of unconsolidated
joint ventures and entities
|
(6,863
|
)
|
826
|
(9,097
|
)
|
|||||
|
Income
tax expense
|
(2,270
|
)
|
(1,209
|
)
|
(1,046
|
)
|
||||
|
Loss
before equity earnings of unconsolidated joint ventures and
entities
|
(9,133
|
)
|
(383
|
)
|
(10,143
|
)
|
||||
|
Equity
earnings of unconsolidated joint ventures and entities
|
9,547
|
1,372
|
1,680
|
|||||||
|
Gain
on sale of unconsolidated joint venture
|
3,442
|
--
|
--
|
|||||||
|
Net
income (loss)
|
$
|
3,856
|
$
|
989
|
$
|
(8,463
|
)
|
|||
|
Earnings
(loss) per common share - basic:
|
||||||||||
|
Earnings
(loss) from continuing operations
|
$
|
0.17
|
$
|
(0.51
|
)
|
$
|
(0.37
|
)
|
||
|
Earnings
(loss) from discontinued operations, net
|
--
|
0.55
|
(0.02
|
)
|
||||||
|
Basic
earnings (loss) per share
|
$
|
0.17
|
$
|
0.04
|
$
|
(0.39
|
)
|
|||
|
Weighted
average number of shares outstanding - basic
|
22,425,941
|
22,249,967
|
21,948,065
|
|||||||
|
Earnings
(loss) per common share - diluted:
|
||||||||||
|
Earnings
(loss) from continuing operations
|
$
|
0.17
|
$
|
(0.51
|
)
|
$
|
(0.37
|
)
|
||
|
Earnings
(loss) from discontinued operations, net
|
--
|
0.55
|
(0.02
|
)
|
||||||
|
Diluted
earnings (loss) per share
|
$
|
0.17
|
$
|
0.04
|
$
|
(0.39
|
)
|
|||
|
Weighted
average number of shares outstanding - diluted
|
22,674,818
|
22,249,967
|
21,948,065
|
|||||||
-11-
Reading
International, Inc. and Subsidiaries
Consolidated
Balance Sheets as of December 31, 2006 and 2005
(U.S.
dollars in thousands)
|
December
31,
|
|||||||
|
2006
|
2005
|
||||||
|
ASSETS
|
|||||||
|
Current
Assets:
|
|||||||
|
Cash
and cash equivalents
|
$
|
11,008
|
$
|
8,548
|
|||
|
Receivables
|
6,612
|
5,272
|
|||||
|
Inventory
|
606
|
468
|
|||||
|
Investment
in marketable securities
|
8,436
|
401
|
|||||
|
Restricted
cash
|
1,040
|
--
|
|||||
|
Prepaid
and other current assets
|
2,589
|
996
|
|||||
|
Total
current assets
|
30,291
|
15,685
|
|||||
|
Property
held for development
|
1,598
|
6,889
|
|||||
|
Property
under development
|
38,876
|
23,069
|
|||||
|
Property
& equipment, net
|
170,667
|
167,389
|
|||||
|
Investment
in unconsolidated joint ventures and entities
|
19,067
|
14,025
|
|||||
|
Capitalized
leasing costs
|
10
|
15
|
|||||
|
Goodwill
|
17,919
|
14,653
|
|||||
|
Intangible
assets, net
|
7,954
|
8,788
|
|||||
|
Other
assets
|
2,849
|
2,544
|
|||||
|
Total
assets
|
$
|
289,231
|
$
|
253,057
|
|||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
|
Current
Liabilities:
|
|||||||
|
Accounts
payable and accrued liabilities
|
$
|
13,539
|
$
|
13,538
|
|||
|
Film
rent payable
|
4,642
|
4,580
|
|||||
|
Notes
payable - current portion
|
2,237
|
1,776
|
|||||
|
Note
payable to related party - current portion
|
5,000
|
--
|
|||||
|
Income
taxes payable
|
9,128
|
7,504
|
|||||
|
Deferred
current revenue
|
2,565
|
2,319
|
|||||
|
Other
current liabilities
|
177
|
250
|
|||||
|
Total
current liabilities
|
37,288
|
29,967
|
|||||
|
Notes
payable - long-term portion
|
113,975
|
93,544
|
|||||
|
Notes
payable to related party - long-term portion
|
9,000
|
14,000
|
|||||
|
Deferred
non-current revenue
|
527
|
554
|
|||||
|
Other
liabilities
|
18,178
|
12,509
|
|||||
|
Total
liabilities
|
178,968
|
150,574
|
|||||
|
Commitments
and contingencies
|
|||||||
|
Minority
interest in consolidated affiliates
|
2,603
|
3,079
|
|||||
|
Stockholders
equity:
|
|||||||
|
Class
A Nonvoting Common Stock, par value $0.01, 100,000,000 shares authorized,
35,558,089 issued and 20,980,865 outstanding at December 31, 2006
and
35,468,733 issued and 20,990,458 outstanding at December 31,
2005
|
216
|
215
|
|||||
|
Class
B Voting Common Stock, par value $0.01, 20,000,000 shares authorized
and
1,495,490 issued and outstanding at December 31, 2006 and at December
31,
2005
|
15
|
15
|
|||||
|
Nonvoting
Preferred Stock, par value $0.01, 12,000 shares authorized and no
outstanding shares at December 31, 2006 and 2005
|
--
|
--
|
|||||
|
Additional
paid-in capital
|
128,399
|
128,028
|
|||||
|
Accumulated
deficit
|
(50,058
|
)
|
(53,914
|
)
|
|||
|
Treasury
shares
|
(4,306
|
)
|
(3,515
|
)
|
|||
|
Accumulated
other comprehensive income
|
33,393
|
28,575
|
|||||
|
Total
stockholders equity
|
107,659
|
99,404
|
|||||
|
Total
liabilities and stockholders equity
|
$
|
289,231
|
$
|
253,057
|
|||
-12-