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)
|
¨
|
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.
|
99.1
|
Press
release issued by Reading International, Inc. pertaining to its results of
operations and financial condition for the quarter ended June 30,
2008.
|
READING
INTERNATIONAL, INC.
|
||
Date:
August 7, 2008
|
By:
|
/s/
Andrzej Matyczynski
|
Name:
|
Andrzej
Matyczynski
|
|
Title:
|
Chief
Financial Officer
|
|
·
|
Revenue from continuing
operations for the quarter was up
78.3% over the 2007
quarter, to $53.8 million
|
|
·
|
Net Income
for the quarter was
$0.3 million
compared
to $1.6
million in the 2007
quarter
|
|
·
|
EBITDA(1) for the quarter was $9.3 million
up 30.9%, compared
to $7.1
million in 2007
quarter
|
|
·
|
the
acquisition on February 22, 2008, of 14 cinemas with 173 screens in Hawaii
and California and an agreement to manage one cinema with 8 screens in
Hawaii, the “Consolidated Entertainment”
acquisition;
|
|
·
|
the
recognition of a gain on the sale of our unconsolidated 50% interest in
the cinema at Botany Downs, Auckland, New
Zealand;
|
|
·
|
the
receipt of litigation and insurance proceeds offset by fewer sales of our
Place 57
residential condominium units which have now been sold out with the
exception of the one retail unit;
and
|
|
·
|
the
change in the value of the Australian and New Zealand dollars vis-à-vis
the US dollar from $0.8491 and $0.7730, respectively, as of June 30, 2007
to $0.9562 and $0.7609, respectively, as of June 30,
2008.
|
|
which
resulted in:
|
|
·
|
revenue
growth of $23.7 million or 78.3% to $53.8 million, compared to $30.1
million in the 2007 quarter;
|
|
·
|
income
from continuing operations of $284,000 in the 2008 quarter compared to a
loss from continuing operations of $278,000 in the 2007 quarter;
and
|
|
·
|
EBITDA(1)
of $9.3 million in the 2008 quarter compared to $7.1 million in the
2007 quarter, an increase of 30.9%.
|
|
·
|
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.
|
|
·
|
in
the United States, under the
|
|
o
|
Reading
brand,
|
|
o
|
Angelika
Film Center brand (http://angelikafilmcenter.com/),
|
|
o
|
Consolidated
Theatres brand (http://www.consolidatedtheatres.com/),
and
|
|
o
|
City
Cinemas brand;
|
|
·
|
in
Australia, under the Reading brand (http://www.readingcinemas.com.au/);
and
|
|
·
|
in
New Zealand, under the
|
|
o
|
Reading
(http://www.readingcinemas.co.nz)
and
|
|
o
|
Rialto
(http://www.rialto.co.nz)
brands.
|
|
·
|
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 risks and uncertainties
associated with real estate
development;
|
|
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.
|
Statements of Operations
|
Three
Months Ended
June 30,
|
Six
Months Ended
June 30,
|
||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Revenue
|
$ | 53,751 | $ | 30,139 | $ | 93,478 | $ | 58,115 | ||||||||
Operating
expense
|
||||||||||||||||
Cinema/real
estate
|
44,076 | 21,795 | 73,595 | 41,916 | ||||||||||||
Depreciation
and amortization
|
5,528 | 3,047 | 9,411 | 6,016 | ||||||||||||
General
and administrative
|
4,909 | 3,879 | 9,597 | 7,555 | ||||||||||||
Operating (loss)
income
|
(762 | ) | 1,418 | 875 | 2,628 | |||||||||||
Interest
expense, net
|
(3,039 | ) | (1,950 | ) | (5,876 | ) | (3,701 | ) | ||||||||
Other
income
|
1,860 | 851 | 3,592 | 1,586 | ||||||||||||
Gain
on sale of discontinued operations
|
-- | 1,912 | -- | 1,912 | ||||||||||||
Gain
on sale of unconsolidated entity
|
2,450 | 2,450 | ||||||||||||||
Income
tax expense
|
(407 | ) | (443 | ) | (824 | ) | (942 | ) | ||||||||
Minority
interest expense
|
182 | (154 | ) | (161 | ) | (495 | ) | |||||||||
Net income
|
$ | 284 | $ | 1,634 | $ | 56 | $ | 988 | ||||||||
Basic
and diluted earnings per share
|
$ | 0.01 | $ | 0.07 | $ | 0.00 | $ | 0.04 | ||||||||
EBITDA*
|
$ | 9,258 | $ | 7,074 | $ | 16,167 | $ | 11,647 | ||||||||
EBITDA*
change
|
$2,184
|
$4,520
|
*
|
EBITDA
presented above is net income 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).
|
Three
Months Ended
June 30,
|
Six
Months Ended
June 30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Net
earnings
|
$ | 284 | $ | 1,634 | $ | 56 | $ | 988 | ||||||||
Add:Interest
expense, net
|
3,039 | 1,950 | 5,876 | 3,701 | ||||||||||||
Add:Income
tax provision
|
407 | 443 | 824 | 942 | ||||||||||||
Add:Depreciation
and amortization
|
5,528 | 3,047 | 9,411 | 6,016 | ||||||||||||
EBITDA
|
$ | 9,258 | $ | 7,074 | $ | 16,167 | $ | 11,647 |
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Revenue
|
||||||||||||||||
Cinema
|
$ | 49,488 | $ | 26,034 | $ | 84,831 | $ | 50,540 | ||||||||
Real
estate
|
4,263 | 4,105 | 8,647 | 7,575 | ||||||||||||
53,751 | 30,139 | 93,478 | 58,115 | |||||||||||||
Operating
expense
|
||||||||||||||||
Cinema
|
41,780 | 19,931 | 69,185 | 38,051 | ||||||||||||
Real
estate
|
2,296 | 1,864 | 4,410 | 3,865 | ||||||||||||
Depreciation
and amortization
|
5,528 | 3,047 | 9,411 | 6,016 | ||||||||||||
General
and administrative
|
4,909 | 3,879 | 9,597 | 7,555 | ||||||||||||
54,513 | 28,721 | 92,603 | 55,487 | |||||||||||||
Operating
income (loss)
|
(762 | ) | 1,418 | 875 | 2,628 | |||||||||||
Non-operating
income (expense)
|
||||||||||||||||
Interest
income
|
365 | 84 | 603 | 229 | ||||||||||||
Interest
expense
|
(3,404 | ) | (2,034 | ) | (6,479 | ) | (3,930 | ) | ||||||||
Net
loss on sale of assets
|
-- | -- | -- | (185 | ) | |||||||||||
Other
income (expense)
|
1,671 | 465 | 3,045 | (271 | ) | |||||||||||
Loss
before minority interest expense, discontinued operations, income tax
expense, and equity earnings of unconsolidated joint ventures and
entities
|
(2,130 | ) | (67 | ) | (1,956 | ) | (1,529 | ) | ||||||||
Minority
interest income (expense)
|
182 | (154 | ) | (161 | ) | (495 | ) | |||||||||
Loss
before discontinued operations, income tax expense, and equity earnings of
unconsolidated joint ventures and entities
|
(1,948 | ) | (221 | ) | (2,117 | ) | (2,024 | ) | ||||||||
Gain
on sale of a discontinued operation
|
-- | 1,912 | -- | 1,912 | ||||||||||||
Income
(loss) before income tax expense and equity earnings of unconsolidated
joint ventures and entities
|
(1,948 | ) | 1,691 | (2,117 | ) | (112 | ) | |||||||||
Income
tax expense
|
(407 | ) | (443 | ) | (824 | ) | (942 | ) | ||||||||
Income
(loss) before equity earnings of unconsolidated joint ventures and
entities
|
(2,355 | ) | 1,248 | (2,941 | ) | (1,054 | ) | |||||||||
Equity
earnings of unconsolidated joint ventures and entities
|
189 | 386 | 547 | 2,042 | ||||||||||||
Gain
on sale of unconsolidated entity
|
2,450 | -- | 2,450 | -- | ||||||||||||
Net
income
|
$ | 284 | $ | 1,634 | $ | 56 | $ | 988 | ||||||||
Earnings
(loss) per common share – basic and diluted:
|
||||||||||||||||
Earnings (loss) from continuing
operations
|
$ | 0.01 | $ | (0.01 | ) | $ | 0.00 | $ | (0.04 | ) | ||||||
Earnings from discontinued
operations
|
0.00 | 0.08 | 0.00 | 0.08 | ||||||||||||
Basic
and diluted earnings per share
|
$ | 0.01 | $ | 0.07 | $ | 0.00 | $ | 0.04 | ||||||||
Weighted
average number of shares outstanding – basic
|
22,476,355 | 22,487,943 | 22,476,355 | 22,485,480 | ||||||||||||
Weighted
average number of shares outstanding – dilutive
|
22,763,826 | 22,487,943 | 22,763,826 | 22,485,480 |
June
30, 2008
|
December
31, 2007
|
|||||||
ASSETS
|
||||||||
Current
Assets:
|
||||||||
Cash
and cash equivalents
|
$ | 26,752 | $ | 20,782 | ||||
Receivables
|
7,116 | 5,671 | ||||||
Inventory
|
816 | 654 | ||||||
Investment
in marketable securities
|
4,939 | 4,533 | ||||||
Restricted
cash
|
59 | 59 | ||||||
Prepaid
and other current assets
|
2,230 | 3,800 | ||||||
Total
current assets
|
41,912 | 35,499 | ||||||
Land
held for sale
|
1,954 | 1,984 | ||||||
Property
held for development
|
13,844 | 11,068 | ||||||
Property
under development
|
77,725 | 66,787 | ||||||
Property
& equipment, net
|
223,435 | 178,174 | ||||||
Investment
in unconsolidated joint ventures and entities
|
15,369 | 15,480 | ||||||
Investment
in Reading International Trust I
|
1,547 | 1,547 | ||||||
Goodwill
|
25,697 | 19,100 | ||||||
Intangible
assets, net
|
24,866 | 8,448 | ||||||
Other
assets
|
10,494 | 7,984 | ||||||
Total
assets
|
$ | 436,843 | $ | 346,071 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
Current
Liabilities:
|
||||||||
Accounts
payable and accrued liabilities
|
$ | 13,814 | $ | 12,331 | ||||
Film
rent payable
|
6,471 | 3,275 | ||||||
Notes
payable – current portion
|
1,253 | 395 | ||||||
Note
payable to related party – current portion
|
-- | 5,000 | ||||||
Taxes
payable
|
5,137 | 4,770 | ||||||
Deferred
current revenue
|
2,881 | 3,214 | ||||||
Other
current liabilities
|
200 | 169 | ||||||
Total
current liabilities
|
29,756 | 29,154 | ||||||
Notes
payable – long-term portion
|
187,677 | 111,253 | ||||||
Notes
payable to related party – long-term portion
|
14,000 | 9,000 | ||||||
Subordinated
debt
|
51,547 | 51,547 | ||||||
Noncurrent
tax liabilities
|
5,672 | 5,418 | ||||||
Deferred
non-current revenue
|
619 | 566 | ||||||
Other
liabilities
|
16,379 | 14,936 | ||||||
Total
liabilities
|
305,650 | 221,874 | ||||||
Commitments
and contingencies
|
||||||||
Minority
interest in consolidated affiliates
|
2,344 | 2,835 | ||||||
Stockholders’
equity:
|
||||||||
Class
A Nonvoting Common Stock, par value $0.01, 100,000,000 shares authorized,
35,564,339 issued and 20,987,115 outstanding at June 30, 2008 and at
December 31, 2007
|
216 | 216 | ||||||
Class
B Voting Common Stock, par value $0.01, 20,000,000 shares authorized and
1,495,490 issued and outstanding at June 30, 2008 and at December 31,
2007
|
15 | 15 | ||||||
Nonvoting
Preferred Stock, par value $0.01, 12,000 shares authorized and no
outstanding shares
|
-- | -- | ||||||
Additional
paid-in capital
|
132,446 | 131,930 | ||||||
Accumulated
deficit
|
(52,614 | ) | (52,670 | ) | ||||
Treasury
shares
|
(4,306 | ) | (4,306 | ) | ||||
Accumulated
other comprehensive income
|
53,092 | 46,177 | ||||||
Total
stockholders’ equity
|
128,849 | 121,362 | ||||||
Total
liabilities and stockholders’ equity
|
$ | 436,843 | $ | 346,071 |