Record Second Quarter 2018 Results Announced by Reading International
CULVER CITY, Calif.--(BUSINESS WIRE)--Aug 9, 2018--Reading International, Inc. (NASDAQ: RDI) today announced record revenue results for the quarter ended June 30, 2018, while Operating Income was the second highest recorded for any quarter in the company’s history. Our Company reported Basic Earnings per Share (“EPS”) of $0.22 and $0.35, for the quarter and six months ended June 30, 2018, respectively.
Ellen Cotter, Chair, President and Chief Executive Officer, said, “The second quarter represented another record period for Reading as we continued to build on our strong momentum from the first quarter. Our results were driven by the continued execution of our three-year plan and we achieved superior operational execution. Ongoing capital improvements and refurbishments to elevate the guest experience in our cinema business are having the desired impact. The strong film product and successful launch of our first dine-in concept, “Spotlight,” contributed to our results and increased interest in our enhanced U.S. food and beverage offerings.”
Consolidated revenue for the second quarter of 2018, increased by 16%, or $11.8 million, compared to the second quarter of 2017, primarily driven by: (i) the U.S. Cinema’s significant increase in attendance and total spend per patron, (ii) the opening of our new state-of-the-art eight screen Reading Cinema on December 14, 2017 in Newmarket, Australia, and (iii) increases in average ticket prices (“ATP”) in our U.S., Australian and New Zealand Cinemas.
The following table summarizes the second quarter and first half-of-the-year results for 2018 and 2017:
COMPANY HIGHLIGHTSOperating Results: For the quarter ended June 30, 2018, we achieved revenue of $84.2 million, up $11.8 million from the prior year. Our operating results benefited from the strong performance of our US cinema operations. Capex program: During the second quarter of 2018, we invested $18.0 million in capital improvements to our cinemas, continuing our investment in the upgrading of select cinemas and real estate properties. Cinema activities: During the second quarter of 2018, we saw the benefit in performance as a result of the completed renovations at four U.S. theaters: Cal Oaks, Manville, Pearlridge, and Ward. We continue to upgrade our food and beverage (“F&B”) offerings and, as of June 30, 2018, we have obtained liquor licenses for 26 of our existing cinemas in the U.S., Australia and New Zealand. Our cinema pipeline includes three new cinemas in Australia that have been approved by our Board of Directors and which we anticipate bringing on line in 2019/2020.
We achieved a record second quarter in our online ticket sales in all three countries where we operate, led by “ Avengers – Infinity War” and “ Deadpool 2” exceeding previous first quarter records by as much as 144% in the U.S. With the continued improvements of our websites and apps in the U.S. and improved online sales infrastructure to better serve high sales volume, “ Avengers – Infinity War” set daily and weekly online record ticket sales in all countries.
Real estate activities:Purchase of Land at Cannon Park, Australia – On June 13, 2018, we acquired a 163,000 square foot (15,150 square meter) parcel at our Cannon Park ETC, in connection with the restructuring of our relationship with the adjacent land owner. Prior to the restructuring, this parcel was commonly owned by us and the adjoining land owner. In the restructuring, the adjoining land owner conveyed to us its interest in the parcel for AU$1. We granted the adjoining land owner certain access rights. Purchase of Property in Auburn, Australia – On June 29, 2018, we purchased a property for $3.5 million (AU$ 4.5 million) in Auburn (Sydney area), Australia. The property which borders our Redyard ETC in Auburn on three sides to the east, west and south and consists of an approximately 16,830 square foot building located on an estimated 20,870 square foot lot, is subject to a lease to Telstra Corporation through September 2022. This will allow us time to plan for the efficient integration into our ETC. Including this acquisition, our Redyard ETC represents approximately 519,992 square feet (48,309 square meters) of land, with approximately 1,620 feet (498 meters) of uninterrupted frontage to Parramatta Road, a major Sydney arterial motorway. Expansion Project for our Newmarket Shopping Center at an affluent suburb of Brisbane, Australia – In December 2017 we opened our eight-screen Reading Cinema with TITAN LUXE, including 10,150 square feet of additional retail space and 124 additional parking spaces. As of June 30, 2018, approximately 93% of this new retail space has been leased. Belmont (Perth, Australia) – In the first half of 2018, we continued with the re-positioning of our ETC in Belmont (a suburb of Perth), which features new F&B offerings and a Reading Cinema with TITAN LUXE. During the latter part of the second quarter of 2018, the Asian inspired Tao Café (with approximately 3,190 square feet) opened joining our existing restaurants, Dome Café and Tavolo. Manukau Land Rezoning (Auckland, New Zealand) – We own two parcels in Manukau comprising 64.0 acres zoned for light industrial use and 6.4 acres zoned for heavy industrial use. Now that our zoning enhancement goal is achieved, we are reviewing our options with respect to the value realization opportunities and commercial exploitation of this asset. We see this property as a future value realization opportunity. This tract is adjacent to the Auckland Airport which has recently been expanding toward our property. We are currently working with adjoining landowners to develop an infrastructure plan for the approximately 355 acres of rezoned land of which our property is a significant part. Minetta Lane (New York, USA) – In February 2018, we entered into a one-year license agreement with Audible, Inc. a subsidiary of Amazon, at the Minetta Lane Theatre. We understand that Audible intends to produce one to two character plays, from which it will record audio productions available through Audible. Redevelopment of 44 Union Square Property (New York, USA) – At the beginning of January 2016, we ceased our live theatre business at our Union Square property in New York, terminated all tenant leases and prepared the property for redevelopment. Accordingly, this property is no longer treated as an operating property. We anticipate that the 73,000 square foot redevelopment project in Union Square will be ready for the commencement of tenant fit-out in the first quarter of 2019. Retail and office leasing interest to date has been strong and we are currently in discussions with a number of quality tenants. This redevelopment will add approximately 23,000 square footage of rentable space to the current square footage of the building for an approximate total of 73,322 square feet of rentable space, inclusive of anticipated BOMA (Building Owners and Managers Association) adjustments and subject to lease negotiations and the final tenant mix. Cinema 1,2,3 Redevelopment (New York, USA) – In June 2017, we entered into an exclusive dealing and pre-development agreement with our adjoining neighbors, 260-264 LLC, to jointly develop the properties, currently home to Cinemas 1,2,3 and Anassa Taverna. While this agreement has expired, we both (i) remain open to the common development of these properties given the synergies and value creation opportunities of the joint development and (ii) have been and will continue to evaluate alternative opportunities for the property.
Corporate MattersOur 2018 Annual Stockholders Meeting of the Company is scheduled to be held on November 7, 2018, and the record date for stockholders entitled to vote is September 17, 2018.
The following table summarizes the second quarter and first half-of-the-year segment operating results for 2018 and 2017:
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