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 16, 2009
Reading International,
Inc.
(Exact
Name of Registrant as Specified in its Charter)
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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)
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(IRS
Employer
Identification
No.)
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500 Citadel Drive, Suite 300, Commerce,
California
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90040
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(Address
of Principal Executive Offices)
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(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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¨
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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.
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On March 16, 2009, Reading
International, Inc. issued a press release announcing information regarding its
results of operations and financial condition for the year ended December 31,
2008, 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 year ended December 31,
2008.
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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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Date:
March 16, 2009
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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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Reading
International Announces 2008 Results
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·
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Revenue from
operations for the year was up 68.7% over
2007, to $191.3 million
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Los Angeles, California, - (PR
NEWSWIRE) –March 16, 2009 – Reading International, Inc. (NYSE Alternext
US: RDI) announced today results for its year and fourth quarter ended December
31, 2008.
Twelve
Month 2008 Highlights
With
respect to our cinema activities:
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·
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On
February 22, 2008, we acquired 15 cinemas with 181 screens in Hawaii and
California, the “Consolidated Entertainment” acquisition. The
initial purchase price was $70.2 million, but allowed for certain
post-closing purchase price adjustments to be made. The
adjusted purchase price is currently $63.9
million;
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·
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On
June 6, 2008, we sold our 50% interest in the 8-screen Botany Downs cinema
in Auckland, New Zealand, to our joint venture partner. The
sale price was $3.3 million in cash plus the assumption of our 50% share
of the outstanding debt, which amounted to $1.0 million;
and
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We
took a $2.1 million impairment charge relative to certain of our New
Zealand cinemas.
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With
respect to our real estate activities:
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In
the first quarter of 2008, we acquired or entered into agreements to
acquire four contiguous properties in Brisbane, Australia. We
acquired three properties for $2.5 million and conditionally agreed to
purchase a fourth property for $7.6
million;
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On
September 16, 2008, we entered into a sale option agreement to sell our
Auburn property located in Sydney, Australia. The option sale
price is $28.5 million and comes to term on November 1, 2009, following
non-refundable option payments of $2.8
million;
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·
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On
September 18, 2006, we acquired a 0.3 acre property in Brisbane,
Australia, for $1.8 million. The six-story office building with
two basement levels of parking that is being constructed on that site is
anticipated to be completed in March
2009;
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At
December 31, 2007, we had sold of all 67 residential units of the Place 57 residential
condominium tower in Manhattan, in which we own a 25%
interest. The one retail unit which had remained unsold was
sold in February 2009. Based on the closing statements of the
sale, our share of the earnings will be approximately $800,000;
and
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·
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We
took a $4.0 million impairment charge relative to certain parcels of land
held for development in Australia and New
Zealand.
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-1-
Which
resulted in:
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·
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revenue
growth of 68.7% to $191.3 million, compared to $113.4 million in
2007;
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·
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an
operating loss of $4.6 million, compared to income of $5.2 million in
2007;
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net
loss for the 2008 year of $18.5 million compared to a loss of $2.1 million
in 2007;
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·
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EBITDA(1)
of $17.9 million in 2008 compared to $20.0 million in 2007;
and
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·
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adjusted
EBITDA(1)
of $21.3 million in 2008 compared to $18.9 million in
2007.
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Fourth
Quarter 2008 Discussion
Revenue
from operations increased from $26.5 million in Q4 2007 to $43.8 million in
2008, a 65.6% increase, or $17.4 million. Cinema segment revenue
increased by $18.7 million and was predominantly in the U.S., which was $18.8
million higher than last year. This increase in the U.S. was driven
by our Consolidated Entertainment acquisition. The quarter also
reflected a good product mix, which included “Quantum of Solace,” “Madagascar:
Escape 2 Africa” and “Twilight.” These top 3 grossing films
for our worldwide circuit accounted for approximately 17.8% of our cinema box
office revenue. The decrease in real estate revenue was predominantly
in the U.S. and driven by a reduction in rental revenue from our live theatres,
which contributed to a decrease in real estate revenue by $1.2 million, to $2.4
million in 2008.
As a
percent of revenue, cinema/real estate segment operating expense, at 79.4% in
the 2008 quarter, was higher than the 72.1% of the 2007 quarter. The
primary driver for this was an increase in cinema costs primarily related to
higher film rent expense incurred in the United States as a result of the
acquisition of the Consolidated Entertainment cinemas. Since
Consolidated Entertainment cinemas are commercial houses, their film product is
more expensive than the art and specialty film featured at the art cinemas,
which made up the bulk of our US cinema assets prior to the
acquisition.
Depreciation
and amortization increased by $1.3 million or 46.0%, from $2.8 million in the
2007 quarter to $4.0 million in the 2008 quarter, primarily related to our newly
acquired Consolidated Entertainment cinema assets.
During
the fourth quarter, we recorded asset impairment charges of $5.3 million,
compared to no charge in the 2007 quarter. The impairment of our real
estate assets,
-2-
which
accounted for $3.2 million of this amount, was driven by reduced market
capitalization rates; whereas the $2.1 million associated with our cinema assets
was a mixture of reduced cash flow from our New Zealand cinemas and reductions
in market value multiples. These impairments are non-cash charges to
earnings and did not affect the company’s liquidity or cash flow from
operations.
General
and administrative expense increased by $2.8 million
or 59.7%, from $4.7 million to $7.4 million in the 2008 quarter. This
increase was primarily due to additional compensation expense of $125,000
relating to hiring our Chief Legal Officer, additional audit costs from a
stand-alone audit of the entity that holds our Consolidated Entertainment
acquisition; expensing of executive stock grants of $700,000, legal and
professional fees of $450,000 associated principally with our real estate
investment activities and the defense of the IRS claim; and a $710,000 write
down in the value recoverable on our Malulani investment.
Net
interest expense increased by $3.7 million to $5.9 million, primarily related to
an increase in interest expense of $2.3 million in the 2008 quarter, compared to
a decrease of interest expense of $506,000 for the 2007 quarter, relating to our
interest rate swap contracts; this was in addition to higher outstanding loan
balances in 2008 compared to 2007, primarily relating to our current year
Consolidated Entertainment acquisition.
Other
expense (which includes equity earnings from unconsolidated entities) increased
by $527,000 as a result of a decrease in equity earnings from unconsolidated
joint ventures and entities primarily relating to a $307,000 impairment of one
of our joint venture investments, a write-off of acquired development plans as
part of our 2005 Movieland acquisition of $173,000, a final settlement expense
relating to New Zealand litigation of $158,000, and an impairment charge of
$130,000 relating to some of our historical properties in
Philadelphia. These amounts were offset by a decrease in
mark-to-market expense for our Becker securities of $314,000 ($810,000 in the
2007 quarter and $496,000 in the 2008 quarter).
As a
result of the above, we reported a net loss of $16.5 million for the 2008
quarter compared to a net loss of $4.0 million in the 2007 quarter.
Our
EBITDA (1) of
negative $6.0 million for the 2008 quarter was $7.8 million lower than the 2007
quarter of positive $1.8 million. However, adjusting 2008
for:
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·
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the
write-offs and impairment charges of $5.9
million;
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·
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the
Becker available-for-sale shares mark-to-market expense of $496,000;
and
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·
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the
write-down of the amount recoverable on our Malulani investment of
$710,000,
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our adjusted EBITDA(1) for the 2008 quarter was $1.1
million. Adjusting the 2007 quarter for:
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·
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the
Becker available-for-sale shares mark-to-market expense of
$810,000,
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our
adjusted EBITDA(1) for
the 2007 quarter was $2.6 million.
-3-
Twelve
Month 2008 Summary
Revenue from operations increased by
68.7% or $77.9 million, to $191.3 million in the twelve months of 2008 compared
to 2007. This increase was driven by an increase in cinema segment
revenue for 2008 of $77.6 million or 77.8%. The 2008 increase was
primarily a result of $66.9 million of revenue from our newly acquired
Consolidated Entertainment cinemas and improved results from our Australia
operations of $9.5 million. Strong circuit-wide showings of “The Dark Knight,” “Iron Man” and “Indiana Jones: Kingdom of the
Crystal Skull” accounted for 11.5% of our worldwide cinema box office
revenue. The real estate segment revenue increase of $2.0 million came
predominantly from the U.S., driven by rental revenues from our acquisition of
the Consolidated Entertainment cinemas that have ancillary real estate
associated with them, and Australia.
As a
percent of revenue, cinema/real estate segment operating expense, at 78.7% in
the 2008 twelve months, was higher than the 71.8% of the 2007 twelve
months. The primary drivers were the same factors that drove the 2008
quarter, as stated above.
Depreciation and amortization increased
by $7.1 million to $17.9 million in 2008 from $10.7 million in 2007, driven
primarily by our acquisition of the Consolidated Entertainment cinema assets in
2008.
During
2008, we recorded asset impairment charges of $6.0 million, compared to no
charge in 2007. The impairment of our real estate assets, which
accounted for $4.0 million of this amount, was driven by reduced market
capitalization rates, whereas the $2.1 million associated with our cinema assets
was a mixture of reduced cash flow from our New Zealand cinemas and reductions
in market value multiples. Again, these impairments are non-cash
charges to earnings and did not affect the company’s liquidity or cash flows
from operations.
General
and administrative expense increased by $5.3 million to $21.4 million in 2008
from $16.1 million in 2007. The significant drivers of this increase
were $1.2 million in executive stock bonus expense, additional compensation
expense related to our newly hired CLO of $240,000, additional directors’ fees
of $150,000, acquisition related one-time charges of $300,000 and on-going audit
charges of $125,000 related to the acquisition of the Consolidated Entertainment
assets, additional legal fees related to our investment activities and the IRS
tax case of $1.3 million, and a $710,000 write down in the value recoverable on
our Malulani investment.
Net
interest expense increased by $7.6 million in the 2008 year, to $15.7 million,
primarily related to higher outstanding loan balances in 2008 compared to 2007
predominantly relating to our Consolidated Entertainment acquisition in February
2008, combined with an increase in interest expense of $2.1 million for 2008
compared to a decrease in interest expense of $320,000 for 2007, relating to our
interest rate swap contracts.
Other
income (which includes equity earnings from unconsolidated entities) decreased
by $552,000 to $1.5 million in 2008, primarily due to our Burstone litigation
settlement receipts totaling $1.2 million, insurance proceeds of $910,000
related to damage caused by Hurricane George in 1998 to one of our previously
owned cinemas in Puerto Rico. This income was offset by 2008
write-off and impairment expenses of
-4-
$173,000,
$307,000, and $130,000 as described in the quarter discussion above,
a $158,000 final litigation settlement described above; and equity earnings from
unconsolidated joint ventures and entities which decreased by $2.0 million
primarily due to lower earnings from our Place 57
investment.
During 2007, upon the fulfillment of
our commitment, we recorded the release of a deferred gain on the sale of a
discontinued operation of $1.9 million associated with a previously sold
property.
During 2008, we recorded a gain of $2.5
million on the sale of our 50% share of the 8-screen Botany Downs cinema in
Auckland, New Zealand, to our joint venture partner.
As a
result, we reported a net loss of $18.5 million for the 2008 twelve months
compared to a net loss of $2.1 million in the 2007 twelve months.
Our
reported EBITDA (1) at
$17.9 million for the twelve months of 2008 was $2.1 million lower than the
$20.0 million in the 2007 twelve months. However, adjusting 2008
for:
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·
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the
write-offs and impairment charges of $6.7
million;
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the
Becker shares mark-to-market expense of $496,000;
and
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the
write-down of the amount recoverable on our Malulani investment of
$710,000; offset by
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the
Botany Downs gain on sale of $2.5 million;
and
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litigation
settlements and insurance claim recoveries of $2.1
million,
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our adjusted EBITDA (1) for 2008 was $21.3
million. Adjusting 2007 for:
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·
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the
Becker shares mark-to-market expense of
$810,000;
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the
Sutton Hill Capital, L.L.C. Cinemas 1, 2, & 3 option mark-to-market
expense of $950,000; and
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$391,000
of expensed director stock option costs; offset
by
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the
release of the deferred gain on sale of $1.9 million;
and
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Place 57 earnings of
$1.3 million,
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our adjusted EBITDA (1) for 2007 was $18.9
million. The result is that our adjusted EBITDA (1) from
operations in the 2008 twelve months was $2.4 million higher than the
2007 twelve months.
-5-
Balance
Sheet and Liquidity
Our total
assets at December 31, 2008 were $370.1 million compared to $346.1 million at
December 31, 2007. The currency exchange rates for Australia and New
Zealand as of December 31, 2008 were $0.6983 and $0.5815, respectively, and as
of December 31, 2007, these rates were $0.8776 and $0.7678,
respectively. As a result, currency had a significant negative effect
on the balance sheet at December 31, 2008 compared to December 31,
2007.
Our cash
position at December 31, 2008 was $30.9 million compared to $20.8 million at
December 31, 2007.
In June
2008, we negotiated an extension of our Australia Corporate Credit Facility of
$76.8 million (AUS$110.0 million), through to June 30, 2011 and thereafter one
year rolling extensions based on a yearly review. At December 31,
2008, we had drawn a total of $70.2 million (AUS$100.5 million) against this
facility and issued lease guarantees as the lessee of $2.8 million (AUS$4.0
million) leaving an available, undrawn balance of $3.8 million (AUS$5.5
million).
On June
29, 2007, we finalized the renegotiation of our New Zealand Corporate Credit
Facility as a $34.9 million (NZ$60.0 million) line of credit together with an
extension of the facility through to November 23, 2010. At December
31, 2008 we had drawn only $8.7 million (NZ$15.0 million) against this line of
credit, leaving an available undrawn balance of $26.2 million (NZ$45.0
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
positive working capital at December 31, 2008 was $32.6 million compared to a
positive working capital of $32.3 million at December 31, 2007. The
increase in 2008 and the reclassification in 2007 was a result of characterizing
our Auburn, Sydney, Australia property as an asset held for sale.
Stockholders’
equity was $65.8 million at December 31, 2008 compared to $121.4 at December 31,
2007. The significant movement was due to the currency rates at the
relevant year-ends, which adjusted the stockholders’ equity negatively by $39.1
million.
Based
upon the current levels of the consolidated operations, further anticipated cost
savings and future growth, we believe our cash flow from operations, together
with both the existing and anticipated lines-of-credit and other sources of
liquidity, will be adequate to meet our anticipated requirements for interest
payments and other debt service obligations, working capital, capital
expenditures, and other operating needs.
Recent
and Subsequent Events
Trust Preferred Securities (“TRUPS”)
Redemption: In a series of transactions between December 31,
2008 and February 3, 2009 we:
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On
December 31, 2008, secured a waiver of all financial covenants with
respect to our TRUPS for a period of nine years, in consideration of the
payment of $1.6 million, consisting of an initial payment of $1.1 million
and a contractual obligation to pay $270,000 in December 2011 and $270,000
in December 2014. In the event these payments are not made, the
only remedy is the termination of the waiver;
and
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took
advantage of the current market illiquidity for securities such as our
TRUPS to effectively repurchase $22.9 million of these securities for
$11.5 million. The resultant gain on forgiveness of debt will
be recognized once the securities are cancelled, which is scheduled for
April 30, 2009.
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Place 57 Retail Condominium
Sale: At December 31, 2007, we had sold all 67 residential units of
the Place 57
residential condominium tower in Manhattan, in which we own a 25%
interest. The one retail unit which had remained unsold was sold in
February 2009 for approximately $4.0 million. Based on the closing
statements of the sale, our share of the earnings will be approximately
$800,000.
Malulani Investments
Litigation: In December 2006, we commenced a lawsuit against
certain officers and directors of Malulani Investments Limited (“MIL”) alleging
various direct and derivative claims for breach of fiduciary duty and waste and
seeking, among other things, access to various company books and
records. As certain of these claims were brought derivatively, MIL
was also named as a defendant in that litigation. On
March 11, 2009, we and Magoon LLC agreed to terms of settlement (the “Settlement
Terms”) with respect to this lawsuit. Under the Settlement Terms, we
and Magoon LLC will receive $2.5 million in cash, a $6.75 million three-year
6.25% secured promissory note (issued by TMG), and a ten year “tail interest” in
MIL and TMG which allows us, in effect, to participate in certain distributions
made or received by MIL, TMG and/or, in certain cases, the shareholders of
TMG. However, the tail interest continues only for a period of ten
years and no assurances can be given that we will in fact receive any
distributions with respect to this Tail Interest.
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:
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the
development, ownership and operation of multiplex cinemas in the United
States, Australia and New Zealand;
and
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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.
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Reading
manages its worldwide cinema business under various different
brands:
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in
the United States under the
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o
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Reading
brand,
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o
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Angelika
Film Center brand (http://angelikafilmcenter.com/),
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o
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City
Cinemas brand (http://citycinemas.moviefone.com/),
and
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o
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Consolidated
brand (http://www.consolidatedtheatres.com/);
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-7-
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in
Australia under the Reading brand (http://www.readingcinemas.com.au/);
and
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in
New Zealand under the
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o
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Reading
brand (http://www.readingcinemas.co.nz)
and
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o
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Rialto
brand (http://www.rialto.co.nz).
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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:
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With
respect to our cinema operations:
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o
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The
number and attractiveness to moviegoers of the films released in future
periods;
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o
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The
amount of money spent by film distributors to promote their motion
pictures;
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o
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The
licensing fees and terms required by film distributors from motion picture
exhibitors in order to exhibit their
films;
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o
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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
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o
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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;”
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·
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With
respect to our real estate development and operation
activities:
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o
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The
rental rates and capitalization rates applicable to the markets in which
we operate and the quality of properties that we
own;
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o
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The
extent to which we can obtain on a timely basis the various land use
approvals and entitlements needed to develop our
properties;
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-8-
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o
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The
availability and cost of labor and
materials;
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o
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Competition
for development sites and tenants;
and
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o
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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;
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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:
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o
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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;
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o
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The
relative values of the currency used in the countries in which we
operate;
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o
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Changes
in government regulation, including by way of example, the costs resulting
from the implementation of the requirements of
Sarbanes-Oxley;
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o
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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);
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o
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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;
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o
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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
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o
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Changes
in applicable accounting policies and
practices.
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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.
-9-
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:
Andrzej
Matyczynski, Chief Financial Officer
Reading
International, Inc. (213) 235-2240
[TABLES
FOLLOW]
-10-
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,
|
||||||
|
2008
|
2007
|
2008
|
2007
|
|||||
|
Revenue
|
$43,814
|
$26,455
|
$191,286
|
$113,404
|
||||
|
Operating
expense
|
||||||||
|
Cinema/real
estate
|
34,780
|
|
19,077
|
150,515
|
81,416
|
|||
|
Depreciation
and amortization
|
4,039
|
2,767
|
17,868
|
10,737
|
||||
|
Impairment
expense
|
6,045
|
--
|
6,045
|
--
|
||||
|
General
and administrative
|
7,441
|
4,660
|
21,434
|
16,085
|
||||
|
Operating income
(loss)
|
(8,491
|
) |
(49
|
) |
(4,576
|
) |
5,166
|
|
|
|
||||||||
|
Interest
expense, net
|
(5,908
|
) |
(2,183
|
) |
(15,740
|
) |
(8,161
|
) |
|
Other
income (expense)
|
(1,362
|
) |
(835
|
) |
1,488
|
2,040
|
||
|
Gain
on disposal of business operation
|
--
|
--
|
--
|
1,912
|
||||
|
Gain
(loss) from discontinued operations, net of tax
|
191
|
49
|
562
|
(19
|
) | |||
|
Gain
on sale of unconsolidated entity
|
--
|
--
|
2,450
|
--
|
||||
|
Income
tax expense
|
(586
|
) |
(595
|
) |
(2,099
|
) |
(2,038
|
) |
|
Minority
interest expense
|
(374
|
) |
(346
|
) |
(620
|
) |
(1,003
|
) |
|
|
||||||||
|
Net loss
|
$(16,530
|
) |
$(3,959
|
) |
$(18,535
|
) |
$(2,103
|
) |
|
|
|
|||||||
|
Basic
loss per share
|
$ (0.73
|
) |
$ (0.17
|
) |
$ (0.82
|
) |
$ (0.09
|
) |
|
Diluted
loss per share
|
$ (0.73
|
) |
$ (0.17
|
) |
$ (0.82
|
) |
$ (0.09
|
) |
|
|
||||||||
|
EBITDA(1)
|
$(5,990
|
) |
$1,819
|
$17,862
|
$20,019
|
|||
|
EBITDA(1)
change
|
(7,809)
|
(2,157)
|
||||||
|
(1)
|
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,
|
|||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
|
Net
loss
|
$ | (16,530 | ) | $ | (3,959 | ) | $ | (18,535 | ) | $ | (2,103 | ) | ||||
|
Add: Interest
expense, net
|
5,908 | 2,183 | 15,740 | 8,161 | ||||||||||||
|
Add: Income
tax provision
|
586 | 595 | 2,099 | 2,038 | ||||||||||||
|
Add: Depreciation
and amortization
|
4,039 | 2,767 | 17,868 | 10,737 | ||||||||||||
|
Adjustment for discontinued
operations
|
7 | 233 | 690 | 1,186 | ||||||||||||
|
EBITDA
|
$ | (5,990 | ) | $ | 1,819 | $ | 17,862 | $ | 20,019 | |||||||
-11-
Reading
International, Inc. and Subsidiaries
Consolidated Statements of
Operations for the Three Years Ended December 31, 2008
(U.S.
dollars in thousands, except per share amounts)
|
Year Ended December 31,
|
||||||||||||
|
2008
|
2007
|
2006
|
||||||||||
|
Operating
revenue
|
||||||||||||
|
Cinema
|
$ | 177,256 | $ | 99,703 | $ | 90,504 | ||||||
|
Real estate
|
14,030 | 13,701 | 10,346 | |||||||||
|
Total operating
revenue
|
191,286 | 113,404 | 100,850 | |||||||||
|
Operating
expense
|
||||||||||||
|
Cinema
|
141,761 | 74,051 | 66,736 | |||||||||
|
Real estate
|
8,754 | 7,365 | 6,558 | |||||||||
|
Depreciation and
amortization
|
17,868 | 10,737 | 11,912 | |||||||||
|
Impairment expense
|
6,045 | -- | -- | |||||||||
|
General and
administrative
|
21,434 | 16,085 | 12,991 | |||||||||
|
Total operating
expense
|
195,862 | 108,238 | 98,197 | |||||||||
|
Operating
income (loss)
|
(4,576 | ) | 5,166 | 2,653 | ||||||||
|
Interest
income
|
1,009 | 798 | 306 | |||||||||
|
Interest
expense
|
(16,749 | ) | (8,959 | ) | (6,903 | ) | ||||||
|
Net
loss on sale of assets
|
-- | (185 | ) | (45 | ) | |||||||
|
Other
income (expense)
|
991 | (320 | ) | (1,953 | ) | |||||||
|
Loss
before minority interest, discontinued operations, income tax
expense and equity earnings of unconsolidated joint ventures and
entities
|
(19,325 | ) | (3,500 | ) | (5,942 | ) | ||||||
|
Minority
interest
|
(620 | ) | (1,003 | ) | (672 | ) | ||||||
|
Loss
before discontinued operations, income tax expense, and equity earnings of
unconsolidated joint ventures and entities
|
(19,945 | ) | (4,503 | ) | (6,614 | ) | ||||||
|
Gain
on sale of a discontinued operation, net of tax
|
-- | 1,912 | -- | |||||||||
|
Income
(loss) from discontinued operations, net of tax
|
562 | (19 | ) | (249 | ) | |||||||
|
Loss
before income tax expense and equity earnings of unconsolidated joint
ventures and entities
|
(19,383 | ) | (2,610 | ) | (6,863 | ) | ||||||
|
Income
tax expense
|
(2,099 | ) | (2,038 | ) | (2,270 | ) | ||||||
|
Loss
before equity earnings of unconsolidated joint ventures and
entities
|
(21,482 | ) | (4,648 | ) | (9,133 | ) | ||||||
|
Equity
earnings of unconsolidated joint ventures and entities
|
497 | 2,545 | 9,547 | |||||||||
|
Gain
on sale of unconsolidated joint venture
|
2,450 | -- | 3,442 | |||||||||
|
Net
income (loss)
|
$ | (18,535 | ) | $ | (2,103 | ) | $ | 3,856 | ||||
|
Earnings
(loss) per common share – basic:
|
||||||||||||
|
Earnings
(loss) from continuing operations
|
$ | (0.84 | ) | $ | (0.18 | ) | $ | 0.18 | ||||
|
Earnings
(loss) from discontinued operations, net
|
0.02 | 0.09 | (0.01 | ) | ||||||||
|
Basic
earnings (loss) per share
|
$ | (0.82 | ) | $ | (0.09 | ) | $ | 0.17 | ||||
|
Weighted
average number of shares outstanding – basic
|
22,477,471 | 22,478,145 | 22,425,941 | |||||||||
|
Earnings
(loss) per common share – diluted:
|
||||||||||||
|
Earnings
(loss) from continuing operations
|
$ | (0.84 | ) | $ | (0.18 | ) | $ | 0.18 | ||||
|
Earnings
(loss) from discontinued operations, net
|
0.02 | 0.09 | (0.01 | ) | ||||||||
|
Diluted
earnings (loss) per share
|
$ | (0.82 | ) | $ | (0.09 | ) | $ | 0.17 | ||||
|
Weighted
average number of shares outstanding – diluted
|
22,477,471 | 22,478,145 | 22,674,818 | |||||||||
-12-
Reading
International, Inc. and Subsidiaries
Consolidated Balance Sheets
as of December 31, 2008 and 2007
(U.S.
dollars in thousands)
|
December 31,
|
||||||||
|
2008
|
2007
|
|||||||
|
ASSETS
|
||||||||
|
Current
Assets:
|
||||||||
|
Cash
and cash equivalents
|
$ | 30,874 | $ | 20,782 | ||||
|
Receivables
|
7,868 | 5,671 | ||||||
|
Inventory
|
797 | 654 | ||||||
|
Investment
in marketable securities
|
3,100 | 4,533 | ||||||
|
Restricted
cash
|
1,656 | 59 | ||||||
|
Assets
held for sale
|
20,119 | 25,941 | ||||||
|
Prepaid
and other current assets
|
2,324 | 3,800 | ||||||
|
Total
current assets
|
66,738 | 61,440 | ||||||
|
Land
held for sale
|
-- | 1,984 | ||||||
|
Property
held for development
|
9,005 | 9,289 | ||||||
|
Property
under development
|
58,595 | 66,787 | ||||||
|
Property
& equipment, net
|
153,165 | 154,012 | ||||||
|
Investment
in unconsolidated joint ventures and entities
|
11,643 | 15,480 | ||||||
|
Investment
in Reading International Trust I
|
1,547 | 1,547 | ||||||
|
Goodwill
|
34,964 | 19,100 | ||||||
|
Intangible
assets, net
|
25,118 | 8,448 | ||||||
|
Other
assets
|
9,301 | 7,984 | ||||||
|
Total
assets
|
$ | 370,076 | $ | 346,071 | ||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
|
Current
Liabilities:
|
||||||||
|
Accounts
payable and accrued liabilities
|
$ | 13,170 | $ | 12,331 | ||||
|
Film
rent payable
|
7,315 | 3,275 | ||||||
|
Notes
payable – current portion
|
1,347 | 395 | ||||||
|
Note
payable to related party – current portion
|
-- | 5,000 | ||||||
|
Taxes
payable
|
6,425 | 4,770 | ||||||
|
Deferred
current revenue
|
5,645 | 3,214 | ||||||
|
Other
current liabilities
|
201 | 169 | ||||||
|
Total
current liabilities
|
34,103 | 29,154 | ||||||
|
Notes
payable – long-term portion
|
172,268 | 111,253 | ||||||
|
Notes
payable to related party – long-term portion
|
14,000 | 9,000 | ||||||
|
Subordinated
debt
|
51,547 | 51,547 | ||||||
|
Noncurrent
tax liabilities
|
6,347 | 5,418 | ||||||
|
Deferred
non-current revenue
|
554 | 566 | ||||||
|
Other
liabilities
|
23,604 | 14,936 | ||||||
|
Total
liabilities
|
302,423 | 221,874 | ||||||
|
Commitments
and contingencies
|
||||||||
|
Minority
interest in consolidated affiliates
|
1,817 | 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 December 31, 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 December 31, 2008 and at December 31,
2007
|
15 | 15 | ||||||
|
Nonvoting
Preferred Stock, par value $0.01, 12,000 shares authorized and no issued
or outstanding shares at December 31, 2008 and 2007
|
-- | -- | ||||||
|
Additional
paid-in capital
|
133,906 | 131,930 | ||||||
|
Accumulated
deficit
|
(71,205 | ) | (52,670 | ) | ||||
|
Treasury
shares
|
(4,306 | ) | (4,306 | ) | ||||
|
Accumulated
other comprehensive income
|
7,210 | 46,177 | ||||||
|
Total
stockholders’ equity
|
65,836 | 121,362 | ||||||
|
Total
liabilities and stockholders’ equity
|
$ | 370,076 | $ | 346,071 | ||||
-13-