Reading International, Inc. (NASDAQ: RDI) (the “Company”), an internationally diversified cinema and real estate company with operations and assets in the United States, Australia, and New Zealand, today announced its results for the third quarter ended September 30, 2023.

President and Chief Executive Officer, Ellen Cotter said, “Building on the success of our strong second quarter, the Company continued that positive momentum into the third quarter by delivering global total revenues of $66.6 million, which grew by 30% compared to the third quarter of 2022. Compared to the third quarter of 2022, our global operating income increased by 115% to $1.0 million, and our adjusted EBITDA increased by 59% to $6.1 million. These third quarter results for global total revenue, operating income, and adjusted EBITDA each represent the highest for any third quarter since the end of 2019. These impressive results were driven primarily by our global cinema divisions, each of which delivered the highest attendance, box office, total cinema revenues, and theater level cash flow of any third quarter since the fourth quarter of 2019, due in large part to the cultural phenomenon, “Barbenheimer.”

“With the highly anticipated 2023 holiday movie line-up, including ‘Hunger Games: The Ballad of Songbirds and Snakes,’ ‘Wish,’ ‘Napolean,’ ‘Migration,’ ‘Wonka,’ ‘The Color Purple,’ and ‘Aquaman and the Lost Kingdom,’ and the recently announced end to the SAG-AFTRA strike, we are even more confident that the year will end on a positive note delivering a marked improvement over 2022.”

Ms. Cotter continued, “Our real estate business also generated encouraging results at $5.1 million in global revenues and $0.9 million in operating income, as each country, on a local currency basis, outperformed the third quarter 2022. The U.S. Real Estate division delivered the highest revenues for any third quarter ever due to the opening in June 2023 of Petco at our 44 Union Square property in New York City.”

Ms. Cotter concluded, “Looking ahead, we are carefully navigating the current macroeconomic challenges caused substantially by our increased interest expense. And we know that the duration of the recently settled Hollywood strikes will likely impact our global cinema business in 2024 due to production delays and shifting theatrical release dates. With these conditions in mind, we are still actively pursuing the sale of certain real estate assets to achieve greater liquidity. We are confident that our ‘two business/three country’ diversified business structure will continue to enable us to deliver value to our stockholders into the future.”

Key Financial Results –Third Quarter 2023

• Global revenue of $66.6 million grew by 30% from $51.2 million compared to the third quarter of 2022, primarily due to (i) a stronger film slate led by Barbie and Oppenheimer and (ii) rent recognized in Q3 2023 from Petco, our tenant who opened their flagship store at 44 Union Square to the public on June 1, 2023.
• Operating income of $1.0 million, improved by 115% from an operating loss of $6.7 million, compared to the third quarter of 2022, driven by (i) improved cinema segment results, and (ii) rent recognized in Q3 2023 from our Petco tenancy at 44 Union Square property.
• $6.1 million in positive Adjusted EBITDA grew by 59% vs. the third quarter 2022.
• Our net loss attributable to Reading International, Inc. for the third quarter, decreased from a loss of $5.2 million to a loss of $4.4 million, compared to Q3 2022, due to improved segment revenues, decreased depreciation and amortization expense, partially offset by increased interest expense, and decreased other income.
• The Australian dollar and New Zealand dollar average exchange rates weakened against the U.S. dollar by 4.1% and 1.2%, respectively, compared to the same period in the prior year, which contributed to our loss for the period, and negatively impacted our overall international financial results, since about 50% of our total revenue is generated in Australia and New Zealand.

Key Financial Results – Nine Months of 2023

• Global revenue of $177.4 million for the nine months ended September 30, 2023, increased by 14% from $155.9 million for the same period in 2022, primarily driven by improved performance across our worldwide cinema circuit due to a stronger movie slate and the new rental stream from Petco at 44 Union Square, partially offset by decreases in the value of the Australian and New Zealand currencies.
• Operating loss was reduced by 75% to an operating loss of $5.1 million for the nine months ended September 30, 2023, compared to an operating loss of $20.1 million for the same period in 2022 due to (i) improved cinema performance from a stronger movie slate and a higher number of wide released movies, (ii) Petco rent at our 44 Union Square property that started in Q4 2022, (iii) impairment expense of $1.5 million that was incurred in the same period in 2022 that was not incurred in 2023, and (iv) lower depreciation and amortization due to a delay in CAPEX spending.
• Adjusted EBITDA increased by 120% to an Adjusted EBITDA of $10.0 million for the nine months ended September 30, 2023.
• Basic loss per share of $0.82 for the nine months ended September 30, 2023, improved by approximately 21% compared to a basic loss per share of $1.04 for the same period in 2022.
• Net loss attributable to Reading International, Inc. was $18.3 million for the nine months ended September 30, 2023, an improvement of 20% compared to a net loss of $23.0 million for the same period in 2022.
• The Australian dollar and New Zealand dollar average exchange rates weakened against the U.S. dollar by 5.4% and 4.4%, respectively, compared to the same period in the prior year, which contributed to our loss for the period, and negatively impacted our overall international financial results.

Key Cinema Business Highlights
At $62.7 million, our Q3 2023 cinema segment revenue increased by 30% compared to Q3 2022. At $4.4 million, our Q3 2023 cinema segment operating income grew by $6.5 million, improved by more than 100%, compared to an operating loss of $2.1 million during Q3 2022. Cinema segment revenue for the nine months ended September 30, 2023, of $165.7 million increased by 12% compared to the same period in 2022. Cinema segment operating income for the nine months ended September 30, 2023, improved by more than 100% to an income of $4.3 million compared to a loss of $5.9 million the same period in 2022.

Other notable mentions that occurred during the third quarter were: the opening of an eight-screen boutique cinema at South City Square, Brisbane QLD that operates under the Angelika Film Center brand, our first international Angelika location, as well as a five-screen Reading Cinemas with TITAN LUXE in Busselton, Western Australia. Both new cinemas are state-of-the-art facilities with recliner seating and elevated food and beverage offerings. We have an additional cinema in the pipeline for Australia, located in Noosa (Queensland) and one additional cinema in New Zealand, each anticipated to open in 2026.

In addition, in an effort to improve the overall future profitability of the U.S. Cinema circuit, we closed two Consolidated Theatres in Hawaii in July 2023 and just recently closed a 16 screen Reading Cinema in California.

Key Real Estate Business Highlights
Real estate segment revenue for Q3 2023 increased by 24% to $5.1 million, compared to Q3 2022. Real estate segment operating income for Q3 2023 increased by over 100% to $0.9 million compared to a real estate segment operating loss of $0.1 million in Q3 2022.

Real estate segment revenue for the nine months ended September 30, 2023, increased by 25% to $15.3 million, compared to the same period in 2022. Real estate segment operating income for the nine months ended September 30, 2023, increased by over 100%, to $3.2 million, compared to a loss of $0.1 million for the same period in 2022.

The changes between the third quarter of 2023 and the third quarter of 2022 were primarily attributable to the rent recognized in Q3 2023 from Petco at 44 Union Square that did not occur in the same period of the prior year.

To support our currently anticipated liquidity needs, we have listed the following assets for sale: (i) our office building at 5995 Sepulveda Blvd. Culver City, California, and (ii) our 26-acre industrial site in Williamsport, Pennsylvania. In addition, along with our 25% minority interest partner of the Cinemas 123 in New York City, we have decided to explore a sale in whole or in part of the Cinemas 123 property or otherwise reduce our interest in that asset.

On October 25, 2023, we closed the sale of our Maitland property in NSW Australia for a purchase price of A$2.8 million. We are leasing the 4-screen Reading Cinema on that site back on a short-term basis.

Key Balance Sheet, Cash, and Liquidity Highlights
As of September 30, 2023, our cash and cash equivalents were $11.9 million. As of September 30, 2023, we had total gross debt of $208.6 million, reflecting a reduction in the outstanding debt balance as of December 31, 2022. As of September 30, 2023, our assets had a total book value of $532.6 million as compared to a book value of $587.1 million as of December 31, 2022.

On September 29, 2023, we executed a further modification of our Cinemas 123 Term Loan which extended the maturity date to October 1, 2024. On August 13, 2023, we executed an Amendment Deed to our financing arrangement with National Australia Bank that, among other things, extended our maturity date to July 31, 2025. We are working with our other lenders to restructure our existing debt and extend upcoming maturity dates.

For more information about our borrowings, please refer to Part I – Financial Information, Item 1 – Notes to Consolidated Financial Statements– Note 12 – Borrowings of our Form 10-Q for the quarter ended September 30, 2023.

About Reading International, Inc.
Reading International, Inc. (NASDAQ: RDI), an internationally diversified cinema and real estate company operating through various domestic and international subsidiaries, is a leading entertainment and real estate company, engaging in the development, ownership, and operation of cinemas and retail and commercial real estate in the United States, Australia, and New Zealand.

Reading’s cinema subsidiaries operate under multiple cinema brands: Reading Cinemas, Angelika Film Centers, Consolidated Theatres, and the State Cinema by Angelika. Its live theatres are owned and operated by its Liberty Theaters subsidiary, under the Orpheum and Minetta Lane names. Its signature property developments are maintained in special purpose entities and operated under the names Newmarket Village, Cannon Park, and The Belmont Common in Australia, Courtenay Central in New Zealand, and 44 Union Square in New York City.

Additional information about Reading can be obtained from our Company’s website: https://www.readingrdi.com.