Reading International Inc · NASDAQ:RDI
Reading International — B. Riley & Company Conference 2017
35 slides from Reading International's conference presentation, Sep 28, 2017
Slide 1: B. Riley & Company New York
B.RILEY & COMPANY NEW YORK September 28, 2017
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT Our comments today may contain forward-looking statements and management may make additional forward-looking statements in response to your questions. Such written and oral disclosures are made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Ac
Slide 3: Financial Reconciliations
FINANCIAL RECONCILIATIONS We use EBITDA in the evaluation of our Company’s performance since we believe that EBITDA provides a useful measure of financial performance and value. We believe this principally for the following reasons: We believe that EBITDA is an accepted industry-wide comparative mea
Slide 4: Business Review
BUSINESS REVIEW presented by Andrzej Matyczynski, Executive Vice President - Global Operations This presentation is intended to show a summary of the projects on which management is currently working and management's plan for moving our Company forward. Many of the projects are in their early stages
Slide 5: Company Snapshot
COMPANY SNAPSHOT two synergistic (but diversified) businesses in three countries Cinemas – Steady Cash Flow NASDAQ RDI & RDIB 1 • 58 theaters/469 screens in US, AU & NZ Market Cap $379.7 million (as of 9/22/2017) Total Assets $ 404.0 million (as of 6/30/2017) 3 Real Estate in US, AU & NZ – Long Term
Slide 6: Our Synergistic Mission
We create long-term stockholder value through the OUR SYNERGISTIC MISSION opportunistic and synergistic development of entertainment and real estate assets. This value creation comes from the complementary nature of our existing entertainment and real estate portfolio and the pursuit of new opportun
Slide 7: US Cinemas
US CINEMAS 10th largest US exhibitor by box office (as of August 31, 2017) Geographically Diverse Locations Theaters 27 Major US Cities – NYC, Washington DC, Dallas, Screens 245* San Diego, Sacramento US Cinema Brands Other US Cities – Santa Rosa & Bakersfield Angelika Film Center - Islands of Oahu
Slide 8: Australian Cinemas and New Zealand Cinemas
AUSTRALIAN CINEMAS NEW ZEALAND CINEMAS 4th largest exhibitor in Australia by box office* 3rd largest exhibitor in New Zealand by box office* Theaters 20 Theaters 11 Screens 157** Screens 67** Australian Cinema Brand Reading Cinemas New Zealand Cinema Brand Reading Cinemas Geographically Diverse – Fi
Slide 9: Global Cinema Strategy
GLOBAL CINEMA STRATEGY: INSPIRING EXPERIENCES THAT MAXIMIZE GUEST RETURNS Build long-term value for our stockholders by maximizing the value in our existing cinema portfolio, while we pursue new opportunities. OFFER CRAFT FOOD & BEVERAGE HOSPITALITY-STYLED OPTIONS TO MATCH OUR COMFORT & SERVICE MARK
Slide 10: State-of-the-Art Presentation Helps Drive Box Office
STATE-OF-THE-ART PRESENTATION HELPS DRIVE BOX OFFICE TODAY US COMPANY’S FIRST 4 TITAN XC / TITAN LUXE IMAX AUDITORIUMS OPENED AT VALLEY PLAZA IN BAKERSFIELD, CA AU & NZ 2017 - 2019 Q4 2015 8 TITAN XC AUDITORIUMS FUTURE AUDITORIUMS WE ARE EVALUATING OTHER US CINEMAS FOR IMAX ADDING 7 NEW TITAN XC / T
Slide 11: Offer Hospitality Styled Comfort & Service
OFFER HOSPITALITY STYLED COMFORT & SERVICE TODAY – LUXURY–STYLE ELECTRIC RECLINERS • 4 US CINEMAS (31 SCREENS) • 12 AU/NZ CINEMAS (30 SCREENS) LUXURY-STYLE ELECTRIC RECLINERS ARE PROJECTED TO BE ADDED IN US, AU & NZ 11
Slide 12: Create Uniquely Designed Venues
CREATE UNIQUELY DESIGNED VENUES The emphasis on the creation of engaging physical environments and spaces, which connect guests to our brands and foster longer and repeat visits, is and continues to be a priority. Angelika Film Center & Café Carmel Mountain Plaza San Diego, CA First Angelika on west
Slide 13: We Craft Food & Beverage Options to Match Our Markets
WE CRAFT FOOD & BEVERAGE OPTIONS TO MATCH OUR MARKETS Q2 2017 • In the US today, over 35% of our theaters responsibly serve craft beer, wine & cocktails. Food & Beverage • In Australia today, almost 50% of our theaters responsibly serve craft beer, wine & cocktails. per capita is the highest quarter
Slide 14: Curate Film & Event Programming Tailored to Our Audiences
CURATE FILM & EVENT PROGRAMMING TAILORED TO OUR AUDIENCES • Generate incremental box office through continued focus on Alternative Content Program (including Repertory Events) • Focus on Japanese anime, cultural events, music movies booked in advance and marketed across our own platforms (no increme
Slide 15: Reinvesting in Existing Cinema Portfolio
REINVESTING IN EXISTING CINEMA PORTFOLIO Over the next three years (2017-2019), we will maximize value of our existing cinema assets by pursuing an aggressive capital expenditure plan. US Cinemas Spend $40 – $43mm over next three years Australian Cinemas Spend $16 – $18mm* over next three years New
Slide 16: Continue to Pursue Selective New Opportunities
CONTINUE TO PURSUE SELECTIVE NEW OPPORTUNITIES • We will continue to pursue new build opportunities in strategic markets. • New build opportunities must meet targeted returns. • Our global cinema strategy will enhance our new build opportunities. • Evaluate cinema acquisitions offering synergistic b
Slide 17: Australian and New Zealand Real Estate Portfolio
AUSTRALIAN AND NEW ZEALAND REAL ESTATE PORTFOLIO 4 value creation projects Newmarket Village Shopping center in Newmarket (a suburb of Brisbane), anchored by a Coles Supermarket and BWS. RedYard Entertainment themed center (ETC) in Auburn (a suburb of Sydney) anchored by a Reading Cinema. Cannon Par
Slide 18: US Real Estate Portfolio
US REAL ESTATE PORTFOLIO 2 value creation projects Union Square Building in New York City Cinemas 1, 2 & 3 Building in New York City 4 operating properties Two Off-Broadway Theatres in New York City One Off-Broadway Theatre in Chicago Small Class B Office Building in Culver City, CA 2 future value r
Slide 19: Global Real Estate Strategy
GLOBAL REAL ESTATE STRATEGY Build long-term value for our stockholders by maximizing the value in our existing property portfolio, while we pursue new real estate opportunities meeting our investment criteria. REPOSITION & RENOVATE CREATE SPACES (INTERIOR & PORTFOLIO TO GENERATE EXTERIOR) THAT INSPI
Slide 20: Value Creation Projects: Australia
VALUE CREATION PROJECTS: AUSTRALIA NEWMARKET VILLAGE – AFFLUENT SUBURB OF BRISBANE • 93,000 SF Gross Leasable Area • Tenants include Coles Supermarket, BWS & 36 third party retailers • Adding “Best-in-Class” Cinema expected to open Q4 2017 • Adding approximately 10,000 SF new Dining Precinct expecte
Slide 21: Courtenay Central – Opportunity to Re-think Entire Project
COURTENAY CENTRAL – OPPORTUNITY TO RE-THINK ENTIRE PROJECT Major Earthquake hits Wellington NZ – November 14, 2016 Prior to Earthquake Board approved development plans for Courtenay Central • Approximately 103,000 SF of gross leasable area • 70,000 SF leased to Reading Cinemas with TITAN XC & Gold L
Slide 22: Courtenay Central – Interim Plan
COURTENAY CENTRAL – INTERIM PLAN • Pop-Up Centre, Food & Beverage Focused • Unique Experience • Expand the Centre’s Demographic • Assist in Cinema Sales • Generate Awareness on Social Media • Food Trucks, Live Music, Free Workshops & Event Spaces • Introduction to the new Centre 22
Slide 23: Value Creation Project: Union Square NYC
• Plan for seven levels of Retail and Office uses over 73,322 SF VALUE CREATION PROJECT: (inclusive of anticipated BOMA adjustments) Union Square NYC • Retail leasing and marketing is underway – Strong interest • Construction Financing for $57.5 million completed December 2016 • GMP Construction Man
Slide 24: Future Real Estate Opportunities
FUTURE REAL ESTATE OPPORTUNITIES VALUE CREATION PROJECT - CINEMAS 1, 2 & 3 IN NYC ACROSS FROM BLOOMINGDALE’S • June 2017 entered into exclusive dealing and predevelopment agreement with our adjoining neighbors • Potential uses being evaluated: Retail, residential and/or hotel • No assurances on fina
Slide 25: Financial Review
FINANCIAL REVIEW presented by Dev Ghose, Executive Vice President & Chief Financial Officer
Slide 26: Summary Financial Data
SUMMARY FINANCIAL DATA STATEMENT OF OPERATIONS YEAR TO DATE JUNE 30, ($ in thousands, except per share data) 2017 2016 Revenues $141,867 $131,707 Operating Expenses 128,576 120,925 Operating Income 13,291 10,782 Net Income from Continuing Operations 22,095 5,149 Net Income Applicable to Common Stock
Slide 27: Reconciliation of EBITDA to Net Income
Reconciliation of EBITDA RECONCILIATION OF EBITDA TO NET INCOME to Net Loss YEAR TO DATE JUNE 30, ($ in thousands) 2017 2016 EBITDA $ 41,246 $ 19,364 Interest Expense, Net 3,647 3,636 Income Tax Expense 7,549 2,894 Depreciation & Amortization 7,987 7,635 Net Income $ 22,063 $ 5,199 Source: Earnings
Slide 28: Summary Balance Sheet
SUMMARY BALANCE SHEET ($ in thousands) 06/30/2017 12/31/2016 Cash and Cash Equivalents $ 13,075 $ 19,017 Receivables 35,147 8,772 Other Current Assets 6,189 44,852 Total Current Assets 54,411 72,641 Operating Property, Net 219,534 211,886 Investment and Development Property, Net 62,219 43,687 Invest
Slide 29: Summary Financial Data
SUMMARY FINANCIAL DATA STATEMENT OF OPERATIONS THREE MONTHS ENDED JUNE 30, ($ in thousands, except per share data) 2017 2016 Revenues $72,413 $66,918 Operating Expenses 64,653 60,830 Operating Income 7,760 6,088 Net Income from Continuing Operations 19,052 2,922 Net Income Applicable to Common Stock
Slide 30: Reconciliation of EBITDA to Net Income
Reconciliation of EBITDA RECONCILIATION OF EBITDA TO NET INCOME to Net Loss THREE MONTHS ENDED JUNE 30, ($ in thousands) 2017 2016 EBITDA $ 30,719 $ 10,223 Interest Expense, Net 1,787 1,762 Income Tax Expense 5,846 1,663 Depreciation & Amortization 4,054 3,828 Net Income $ 19,032 $ 2,970 Source: Ear
Slide 31: Unused Borrowing Capacity
Reconciliation of EBITDA UNUSED BORROWING CAPACITY to Net Loss AS OF JUNE 30, 2017 ($ in thousands) Expiration Year Contractual Capacity Capacity Used Unused Capacity Bank of America 2019 $ 60,000 $ 36,500 $ 23,500 Union Square Construction Financing 2019 57,500 8,000 49,500(2) National Australia Ba
Slide 32: 2001 – 2017 Yearly Financial Trend
2001 – 2017 YEARLY FINANCIAL TREND in US$ $300,000 $500,000 $250,000 $400,000 $200,000 Revenue & Adj EBITDA $300,000 Assets & Debt (000's) $150,000 (000's) $200,000 $100,000 $100,000 $50,000 $- $- $(50,000) $(100,000) 2001 6/30/2017 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 20
Slide 33: Stockholder Returns
STOCKHOLDER RETURNS* • The Company has been included in the Russell 2000 index since June 2012 • Class A Stock price has increased 191% over the last 63 months • Closing price on September 22, 2017: $15.99 READING INTERNATIONAL RUSSELL 2000 NASDAQ CAPITAL MARKET COMPOSITE S&P 500 250% 200% 191% 150%
Slide 34: In Conclusion
IN CONCLUSION We create long-term stockholder value through the opportunistic and synergistic development of entertainment and real estate assets. Our cinema business offers a stable cash flow. • We are re-investing in our existing cinema portfolio by implementing our Global Cinema Strategy. • We ar
Slide 35: Thank You
THANK YOU
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