Reading International Q4 2024 Earnings Call Transcript

Quartr
Provided by Quartr
April 2, 2025

There are 3 speakers on the call.

Operator

This is the earnings call script for the fourth quarter twenty twenty four. Thank you for joining Reading International's earnings call to discuss our twenty twenty four fourth quarter and full year results. My name is Andrei Matuchinsky, and I am Reading's executive vice president of global operations. With me are Alan Cotter, our president and chief executive officer and Gilbert Avanes, our chief executive vice president, chief financial officer, and treasurer. Before we begin the substance of the call, I will run through the usual caveats.

Operator

In accordance with the safe harbor provision of the Private Securities Litigation Reform Act of 1995, certain matters that will be addressed in this earnings call may constitute forward looking statements. Such statements are subject to risks, uncertainties, and other factors that may cause our actual performance to be materially different from the performance indicated or implied by such statements. Such risk factors are clearly set out in our SEC filings. We undertake no obligation to publicly update or revise any forward looking statements. In addition, we will discuss non GAAP financial measures on this call.

Operator

Reconciliations and definitions of non GAAP financial measures, which are segment operating income, EBITDA and adjusted EBITDA are included in our recently issued twenty twenty four fourth quarter corrected earnings release released on April 1 on our company's website. We have adjusted where applicable the EBITDA items we believe to be external to our business and not reflective of our cost of doing business or results of operations. Such costs could include legal expenses relating to extraordinary litigation and any other items that we can consider to be non recurring in accordance with the two year SEC requirement for determining whether an item is non recurring, infrequent or unusual in nature. We believe that the adjusted EBITDA is an important supplemental measure of our performance. In today's call, we also use an industry accepted financial measure called theater level cash flow, TLCF, which is theater level revenue less direct theater level expenses.

Operator

Average ticket price, ATP, which is calculated by dividing cinema box office revenue by the number of cinema admissions is also used as an accepted industry acronym. We will also use a measure referred to as food and beverage spend per patron, F and B SPP, which is a key performance indicator for our cinemas. The F and B SPP is calculated by dividing a cinema's revenues generated by food and beverage sales by the number of admissions at that cinema. Please note that our comments are necessarily summary in nature, and anything we say is qualified by the more detailed disclosure set forth in our Form 10 k and other filings with the US Securities and Exchange Commission. So with that behind us, I'll turn it over to Ellen, who will review our twenty twenty four fourth quarter and full year results and discuss our business strategy going forward, followed by Gilbert, who will provide a more detailed financial review.

Operator

Helen?

Speaker 1

Thanks, Andre, and welcome everyone to the call today and thank you for listening in. Let's start with the fourth quarter twenty twenty four results, which were encouraging and we believe reinforce our confidence in Reading's long term future. Thanks to both an amazing lineup of blockbuster movies like Wicked, Moana two, Gladiator two, Sonic the Hedgehog three and Mufasa and our management team's collaborative efforts, each of Reading's key operational metrics, total revenues, operating income and adjusted EBITDA all significantly improved compared to twenty twenty three's fourth quarter. At $58,600,000 our Q4 twenty twenty four global total revenue was 29% higher than Q4 twenty twenty three and the best fourth quarter since Q4 twenty nineteen. Our Q4 twenty twenty four global operating income of $1,500,000 increased $8,500,000 or 122% from a global operating loss of $7,000,000 in Q4 twenty twenty three and represented the first fourth quarter since Q4 twenty nineteen that we enjoyed positive operating income.

Speaker 1

At $6,800,000 our Q4 twenty twenty four adjusted EBITDA increased over 400% from a negative adjusted EBITDA of $2,200,000 in Q4 twenty twenty three and represented the highest fourth quarter EBITDA since Q4 twenty nineteen. Our Q4 twenty twenty four global cinema revenue of $54,600,000 was 30% above Q4 twenty twenty three and represented just under 84% of pre pandemic Q4 twenty nineteen levels. At $3,800,000 our Q4 twenty twenty four global cinema operating income was 191% ahead of Q4 twenty twenty three and represented the best fourth quarter global cinema operating income since Q4 twenty nineteen. In highlighting the significant progress our company has made since the first year of the pandemic, our Q4 twenty twenty operating loss was $11,700,000 and again looking forward to Q4 twenty twenty four we had a positive $3,800,000 operating income, a 132% increase. As many of you know, we operate in two industries, cinema and real estate in three countries, The U.

Speaker 1

S, Australia and New Zealand. Currently, over 93% of our revenues come from our cinema business. So the global macro events we've navigated, particularly the impacts of COVID nineteen and the 2023 Hollywood stripes, have posed very serious challenges for us. Through these choppy waters, we've relied on our real estate assets and our global real estate division. In q four twenty twenty four, we reported global real estate revenues of $5,200,000, a 14% increase over the same period in 2023.

Speaker 1

And at $1,400,000 our operating income increased 148% over last year's Q4. This quarter, these favorable results were driven by our improved live theater operation and rent revenue from Petco, our tenant at 44 Union Square. However, the division continues to be supported by our seventy four third party Australia New Zealand tenant portfolio, which has a 96% occupancy rate. Let's turn to the full year. The '20 '20 '3 Hollywood strikes and the result and release date shifts had a major impact on the first part of twenty twenty four for us and for the industry and ultimately dragged the overall year down.

Speaker 1

We reported total revenue of $210,500,000 a 5% decrease from 2023 and seventy six percent of our 2019 total revenue of $276,800,000 Our global operating loss increased by 17% to $14,000,000 Our 2024 global cinema revenue was $195,100,000 which was 6% less than 2023 and equates to 74% of twenty nineteen's global cinema revenues. This revenue reduction also reflects the fact that we've closed four underperforming cinemas in The U. S. Since the second half of twenty three and also reflects the Australian and New Zealand dollar decline that's happened between 2024 and 2023. On the other hand, our global real estate division delivered solid 2024 results with revenues of $20,000,000 versus a slight increase over 2023 and operating income of $4,700,000, a 23% year over year increase.

Speaker 1

One of our company's key short term priorities is to lower our interest expense by reducing or refinancing our debt. As we await a global cinema business that delivers more wide titles more consistently throughout the year, Our board has directed management to assess our global real estate portfolio to identify assets that can be sold to generate liquidity to pay down debt over the next few years. Through 2024, we took steps to monetize certain assets. We sold our office building in Culver City for $10,000,000, paid off the $8,400,000 mortgage, which will reduce our interest expense and our overall g and a expenses going forward. After years of working together with the Wellington City Council in New Zealand in April 2024, we faced a sudden and unexpected termination of the negotiations related to a potential sale leaseback transaction.

Speaker 1

Following this termination, our board decided to monetize our property assets in Wellington, New Zealand including our Courtenay Central building. We completed that sale by the end of twenty four but closed on 01/31/2025 for 38,000,000 New Zealand dollars. In 2024, we negotiated and documented a sale transaction which included a leaseback provision that will permit us to refurbish and reopen our Courtenay Central Cinema after the building has been seismically upgraded by the new owner. With these funds from the sale of our Wellington assets, we repaid our entire Westpac debt of 18,800,000.0 New Zealand dollars and repaid 6,000,000 just over $6,000,000 to our Bank of America. In The U.

Speaker 1

S, we've been advancing sales efforts with respect to our approximately 24 acre Newberry Yard asset in Williamsport, Pennsylvania. The yard as the name suggests is integrated into the area's rail system. We believe that we'll benefit from the resurgence of fracking and other economic activity in Pennsylvania. Based on the current interest from various industrial users, while no assurances can be given, we believe that we will transact on that property sometime this year. In Australia, we've been working on the sale of our Cannon Park property asset in Townsville in Queensland and have executed an option to sell with purchase and sale agreements next with a targeted q two twenty twenty five settlement date for a sales price of 32,000,000 Australian dollars.

Speaker 1

In Queensland, for tax purposes, real property sale agreements that include a due diligence component are structured as option agreements. While the option holder has made a 1,600,000 earnest money deposit, no assurances can be given that this transaction will close as a potential buyer is still in its due diligence period. Through 2025, we'll continue to develop opportunities for asset monetization that will assist our overall liquidity conditions. But now let's take a closer look at our Global Cinema business, which has traditionally served as our core source of cash flow driving our asset growth strategy. As I just mentioned, our q four twenty twenty four global cinema revenues and global operating income were both up substantially due to the powerful holiday film slate that was delivered by the major studios, but also by the focus on profitability of our executive programming, operations and marketing teams.

Speaker 1

And while the fourth quarter was great, the full year of 2024 as I mentioned before trailed behind 2023 with the first part of twenty twenty four being materially impacted by the release date changes due to the Hollywood strikes. While the fourth quarter twenty twenty four was very encouraging, this quarter that we're in now, first quarter of twenty five overall will likely be a disappointment in comparison to last year due to a softer overall film slate. But we see light at the end of the tunnel with the remainder of the 2025 movie lineup looking exciting, diverse, and very promising. Families can come together to watch Lilo and Stitch, How to Train Your Dragon, Disney's Elio, Zootopia two. Super fan superhero fans will be entertained by Thunderbolts, the Fantastic Four, and Blade all from the MCU, and Superman from DC Universe.

Speaker 1

Huge franchises return, Karate Kid, Legend, Jurassic World Rebirth, Mission Impossible, The Final Reckoning, Wicked For Good, and Avatar Fire and Ash. And right now, I'm here at CinemaCon this week and some of the original product that we've seen looks really sensational like The Bride from director Maggie Gyllenhaal and f one, the new racing movie from the makers of Maverick director Joe Kaczynski and producer Jerry Bruckheimer. I'll touch on some of the more country specific milestones in a minute but let me first highlight a few of the key strategic initiatives that have been and are being pursued by our global teams through '24 and into '25. Throughout 2024 and into 2025, our global programming teams have remained committed to curating original series and programming compelling content that engages audiences and boost ticket sales. Creating original film series has been a key focus of ours for a while to keep audiences engaged during periods at the time that the studios don't have a consistent flow of product.

Speaker 1

We are also always exploring new avenues for alternative content. This effort falls on both the programming and marketing teams. Our success with these programs is not only dependent on programming great content but equally on executing impactful campaigns across our digital and social channels and creating community based promotional partnerships. Our F B program is always the main focus for our global management teams. In 2024, the F and B SPP for all three of our cinema divisions reached annual record highs for any previous year for the full year of 2024.

Speaker 1

And with respect to the fourth quarter twenty twenty four, the F and B SPP for each cinema division was the highest fourth quarter ever. If you measure when all of our screens were open or in other words excluding certain pandemic periods when only certain screens were operational. Through the year we focused on improving the convenience and functionality behind our F and B sales online and on our app with transaction sizes consistently improving. We again embraced movie themed menus in all three countries and offered our guests movie inspired cocktails, burgers, or desserts. In The US, we're following the merchandise trends and selling very fun merchandise for some of our most important films.

Speaker 1

In Australia and New Zealand, as of today, 75% of our theaters are selling liquor. And in The US, a % of our theaters are selling beer and wine, and then all but three are selling liquor. Understanding the price sensitivities that various audiences feel, in The US, we launched a comprehensive weekday discount program which offers guests value driven discounts on select F and B items throughout the week as opposed to the weekend. For instance, on Mondays you could get a mega movie combo. On Tuesdays, we offer a BOGO sweet treat, etcetera.

Speaker 1

And with regard to loyalty and rewards, we're driving guests to our theaters through our existing programs and are working to develop new and improved rewards and loyalty programs. In Australia and New Zealand during the last half of 2024, we revamped and relaunched our free to join Reading rewards program to provide better perks and savings. Today, we have over 300,000 members. And in late q four twenty twenty four, we also launched paid loyalty programs for both our Reading and Angelica brands. And since launch, we've signed up over 6,000 paid memberships.

Speaker 1

In The US, we have a free to join Angelica membership program with over a 55,000 members for eight theaters. We'll launch a premium monthly membership within the next three to four months. And we have an existing free to join program in Hawaii at consolidated theaters that will be also rolled into a new free to join and paid membership for consolidated within the next four to six months. At the same time, we'll roll out a similar offer at our U. S.-based Reading Cinemas.

Speaker 1

Another key effort for our global executive teams has been to work with our landlords to try to recalibrate our occupancy costs to reflect the reality of what we've been living over the last few years. Today, attendance is not back to pre pandemic levels and most of our operating expenses are up. So we prioritize collaborating with our landlords to try and achieve occupancy cost reductions where we can. Now let's turn to our US cinema division and starting with the fourth quarter twenty twenty four. Our US cinema revenue increased by 24% to $29,300,000 compared to q four twenty twenty three, and it was the highest Q4 revenue since Q4 twenty nineteen.

Speaker 1

Our U. S. Operating loss improved by $4,200,000 to a positive operating income of $1,600,000 from an operating loss of $2,600,000 in Q4 twenty twenty three. This is also the highest Q4 operating income since Q4 twenty nineteen. These results were achieved despite the streamlining of our circuit.

Speaker 1

The fourth quarter of twenty twenty three includes revenues from two U. S. Cinemas that have since closed. And since the pandemic, we've closed five underperforming US based theaters, three in Hawaii, one in California, and one in Texas, with four of these closures occurring in the last two years. And as we've reported before, we anticipate that these closures will positively impact our future profitability even if they adversely impact our gross revenue line.

Speaker 1

We enjoyed a really compelling film slate that worked for our audience during the fourth quarter. Moana worked very well at consolidated theaters. Wicked worked well at many of our theaters across The U. S. And our specialty theaters did very well with certain films but most particularly Enora and The Brutalist from A24.

Speaker 1

For the full year 2024 our U. S. Cinema revenue decreased by 12% to $99,900,000 compared to the full year of 2023. And our operating loss increased to 7,300,000 up from an operating loss of $5,800,000 for the year ended 12/31/2023. The drivers for The U.

Speaker 1

S. Underperformance for the full year 2024 were as I've said before, a decrease in the cinema performance due to the lingering impacts of the twenty twenty three Hollywood strikes, which resulted in lower box office revenue, lower F and B revenue and lower advertising revenues. This was partially offset by a decrease in depreciation, amortization, G and A expense and lower operating expenses. Our fourth quarter twenty twenty four F and B SPP was $8.28 which represented the highest fourth quarter ever for a U. S.

Speaker 1

Circuit and represented a higher number than certain of our major publicly traded exhibitors competitors, excuse me, and comes during a time when we rolled out the weekday deal program that I just described. Our year to date F B SPP of $8.12, $8.12 represented the highest year to date F and B SPP ever. Additionally, our fourth quarter theater rental revenues help make the employer revenue for our US circuit the highest fourth quarter on record. And reflecting the laser focus of our management team, the US's fourth quarter twenty twenty four cash flow preoccupancy per capita was the highest quarter ever recorded. Now let's turn to our cinemas in Australia and New Zealand.

Speaker 1

In Q4 twenty twenty four and compared to Q4 twenty twenty three, our Australian cinema revenue increased 37% to $21,400,000 and our operating income increased 254% to $1,700,000 from an operating loss of $1,100,000 Our New Zealand cinema revenue increased 53% to $3,800,000 and operating income increased 228% to $504,000 from an operating loss of $395,000. If you looked at these increases in their local currency, the results would be even more impressive. Here are some of the fourth quarter twenty twenty four milestones. Supported by a terrific film lineup that worked well with our audiences in Australia and New Zealand, our Australian cinema division cinema revenue of $21,400,000 marked the highest fourth quarter performance since q four twenty nineteen. At $1,700,000, our Australian cinema division's operating income also marked the highest fourth quarter performance since q four twenty nineteen.

Speaker 1

Our q four twenty twenty four admission revenue in Australia and New Zealand were higher than q four twenty twenty three with a 37% increase for Australia and a 38% increase for New Zealand. In functional currency, our Australian F and B revenue of 10,600,000.0 Australian dollars is the highest fourth quarter of all time for F and B revenues. Australia had its best full year and fourth quarter revenues in terms of both food and beverage and screen advertising in functional currency for the 2024 full year and the fourth quarter twenty twenty four. The q four twenty twenty four screen advertising revenue in Australia was supported in part by the rollout of another circuit wide click to pay program with Mastercard. Our Australia Q4 Twenty Twenty Four ATP of $15.27 in functional currency and our F and B SPP of $8.28 in functional currency were both the highest fourth quarter ever.

Speaker 1

The fourth quarter twenty twenty four cash flow preoccupancy per capita in Australia was its highest fourth quarter ever recorded, again, when measured in local currency and also like The U. S. Reflecting the laser focus of our management teams. In Australia, our total theater level cash flow delivered the highest fourth quarter since 2019 for Australian cinemas. And rounding out with our New Zealand cinemas, our q four twenty twenty four ATP of $13.20 in New Zealand dollars and our FNB SPP of $6.98, again, functional currency, were the highest ever highest quarters ever.

Speaker 1

Now let's turn to our global real estate business, which on a segment reporting basis includes our live theater business in New York City and our intercompany rents. Let's start with the fourth quarter twenty twenty four results. At $5,200,000, our global real estate total revenue increased 14%, while our total operating income of $1,400,000 increased by 148%. These increases were driven by our live theater revenue as a result of increased show activity and license fees for the quarter at the Orpheum and Audible at the Mineta Lane presented multiple shows during the fourth quarter including I'm Almost There by Todd Allman, Samantha Bees, How to Survive Menopause and Strategic Love Play. Lastly, the quarter was improved due to the rent revenues delivered by Petco who has a flagship store at our 44 Union Square Building in New York City.

Speaker 1

Let me point out a few standout fourth quarter twenty twenty four real estate division metrics. Driven by The US property and US live theater performance, our q four twenty twenty four real estate operating income of $1,400,000 is the best quarter since q three twenty nineteen. And that result takes into account among other things, the sales of our Maitland property in New South Wales in the fourth quarter of twenty three and the sale of Auburn Redyard in June of twenty one. And we had recall you recall we had seventeen third party tenants at that property. Our US real estate business, which includes our two theaters in New York City, achieved an improved year over year result and achieved its highest fourth quarter revenue ever supported by the rent from, 44 Union Square.

Speaker 1

This quarter's operating income was 25% higher than q four twenty nineteen's operating income despite the elimination of rental revenue associated with our Clover City office building, which resulted in the first quarter of twenty four and the q four twenty twenty three sale of our Maitland property in New South Wales. For the full year 2024, our global real estate revenue of $20,000,000 increased by 1% compared to 2023, and our operating income of $4,700,000 increased 23% from an operating income of $3,800,000 in 2023. And while the increases quarter over quarter and year over year might have been attributed to the improved U. S. Business, these results continue to be founded and supported by the 74 party Australian and New Zealand real estate portfolio, which today reflects a 96% occupancy rate.

Speaker 1

With twenty twenty four's results being ahead of 2023 on a yearly and quarterly basis, we're excited to continue to build upon this positive momentum as it pertains to our real estate business. In addition to maintaining our real estate operations, to bolster our long term liquidity during the last several months in 2024, we focused on monetizing four select real estate assets, Clover City, Wellington, Cannon Park, and Williamsport. We worked with our lenders on various financings to extend our maturity dates, which Gilbert will touch on in a minute. And we've now monetized Culver City and Wellington. Cannon Park is under contract and it's in its due diligence phase.

Speaker 1

And while no assurances can be given, we currently anticipate a closing on that sale, the Cannon Park sale sometime this quarter. Williamsport rail easement issues having been resolved, it's now ready to be sold to a new owner with rail access needs. And again, well, no assurances can be given. We do anticipate a closing on that asset before the end of the year. We've also embarked on a detailed review of all of our historic railroad properties and have retained an outside consultant to help us in this effort to determine whether there are additional monetization opportunities existing in our historic rail portfolio.

Speaker 1

This will be a focus for us in 2025. All of these real estate based efforts and momentum should line us up nicely to be ready for the improvement in the box office expected for 2025 and beyond, and the reduction hopefully in interest rates that should continue in the middle of, of 2025. So that wraps it up for me. I'm gonna turn it over to Gilbert.

Speaker 2

Thank you, Ellen. Consolidated revenue for the quarter ended 12/31/2024 increased by 13,300,000.0 to 58,600,000.0 when compared to the fourth quarter of twenty twenty three as a result of a stronger film slate and higher life theater and The US property revenue in the fourth quarter of twenty twenty four. Consolidated revenue for the twelve months ended 12/31/2024 decreased by $12,200,000 to $210,500,000 when compared to the twelve months ended 12/31/2023. This decrease is primarily attributable to the lower attendance in The U. S.

Speaker 2

And New Zealand as a result of overall lower performing titles for our theaters in 2024 compared to 2023 along with closing cinemas in these specific countries. Net loss attributable to Reading International Inc. For the quarter ended 12/31/2024 decreased by $10,100,000 to a loss of $2,200,000 compared to a loss of 12,400,000.0 in Q4 twenty twenty three. Q4 '20 '20 '4 basic loss per share decreased by $0.46 to a basic loss per share of $0.10 compared to a basic loss per share of $0.56 for Q4 twenty twenty three. These results were primarily due to strengthened cinema performance in all three countries, strengthened US and Australia property performance, decreased interest expense, reduced depreciation and amortization, and increased other income.

Speaker 2

Net loss attributable to Reading International Inc. For twelve months ended 12/31/2024 increased by 4,600,000.0 to a loss of US35.3 million dollars from a loss of US30.7 million dollars when compared to the twelve months ended 12/31/2023. Basic loss per share increased by 20¢ to a loss of dollar 58 compared to a loss of dollar 38 for the twelve month ended 2023. These results were primarily due to a decrease in cinema segment revenue due to a weaker movie slate as a result of lingering impact of twenty twenty three Hollywood strike, a 1,700,000.0 increase in interest expense due to rising interest rate, and $1,400,000 loss on sale of asset primarily from the sale of the Culver City office, partially offset by a decreased depreciation and amortization and increased other income. Our total company depreciation, amortization, impairment and general and administrative expenses for the quarter ended 12/31/2024 decreased by $800,000 to $8,200,000 compared to q four twenty twenty three.

Speaker 2

For the twelve months ended 12/31/2024, it decreased by 2,700,000.0 to 35,900,000.0 compared to the twelve months ended 12/31/2023. These decreases were due to decreases in depreciation and amortization as a result of sale of our maintenance and Culver City property and no depreciation on our on our held for sale properties. Income tax expense for the quarter ended 12/31/2024 decreased by 100,000.0 to 200,000.0 compared to q four twenty twenty three. Income tax expense for the twelve months ended 12/31/2024 decreased by 100,000.0 to 500,000.0 compared to the twelve months ended 12/31/2023. The decrease in income tax expense is due to an adjustment for the valuation allowance recorded in 2024 compared to 2023.

Speaker 2

For the fourth quarter of twenty twenty four, our adjusted EBITDA income increased by $9,000,000 to an EBITDA income of $6,800,000 from an EBITDA loss of $2,200,000 in Q4 twenty twenty three. For the twelve months ended 12/31/2024, our adjusted EBITDA income decreased by 5,600,000 to $2,100,000 compared to an EBITDA income of $7,800,000 for the twelve months ended 12/31/2023. Shifting to cash flow. For the twelve months ended 12/31/2024, net cash used in operating activities decreased by 5,900,000.0 to 3,800,000.0 compared to cash used in twelve months ended 12/31/2023 of $9,700,000 This was primarily driven by $11,700,000 increase in net change in operating assets and liabilities, primarily due to decrease in receivables and increase in accounts payable and accrued expenses plus deferred revenues and other liabilities, partially offset by increase in net operating loss of 3,400,000.0 Cash provided in investing activities during the twelve months ended 12/31/2024 increased by $6,700,000 to $4,000,000 compared to cash used in the twelve months ended 12/31/2023 of 2,700,000.0. This was primarily due to proceeds from the sale of our Culver City office.

Speaker 2

Cash provided in financing activities for the twelve months ended 12/31/2024 increased by $7,000,000 to $300,000 compared to cash used in the twelve months ended 12/31/2023 of $6,700,000 This was primarily due to new bridge loan of Australian twelve million from NAB and an increase of New Zealand dollar 5,000,000 from our Westpac loan. This increase was partially offset by payoff of our Citizens loan of 8,400,000.0 following the sale of the Culver City office building and scheduled repayment on other debts. Turning now to our financial position. Total assets on 12/31/2024 were $471,000,000 compared to $533,100,000 on 12/31/2023. This decrease was driven by a 2,800,000 decrease in cash and cash equivalent and receivables from which we funded our ongoing business operations, a 10,100,000.0 decrease in operating properties as a result of the sale of our Culver City office, a 15,800,000.0 decrease due to depreciation and amortization, and a 20,700,000.0 decrease in operating lease right of use assets.

Speaker 2

As of 12/31/2024, our total outstanding borrowings of 202,700,000.0 compared to 210,300,000.0 on 12/31/2023. Our cash and cash equivalent as of 12/31/2024 were $12,300,000 which includes approximately $5,000,000 in U. S, Six Point Four Million and $900,000 in New Zealand. Further, to address liquidity pressure on our business, we are working on our lenders to amend certain debt facilities and we have selected certain real estate assets for potential monetization and have listed them for sale. During the first quarter of twenty twenty four, we completed the monetization of our Culver City, LA office building for 10,000,000 and fully discharged the related mortgage with Citizens.

Speaker 2

During 2024 and the first quarter of twenty twenty five, we made progress with our lenders on the following financing arrangement. And then there, on 08/01/2024, we extended the maturity to 06/01/2025, and two required 250,000 principal payments were repaid on 08/23/2024 and 12/27/2024, respectively. On Bank of America, on 03/27/2024, we extended our Bank of America loan maturity date to 08/18/2025 together with modification of certain financial covenants. We've been working with bank to defer monthly payments. And following the sale of our Courtney property, we repaid 6,100,000.0 of our Bank of America loan on 02/05/2025.

Speaker 2

On Valley National, on 10/01/2024, we obtained two further six months extension for our loan with Valley National. We exercised the second extension on 02/26/2025 with maturity updates to 10/01/2025. We have increased our cash deposit with Valley National by 1,000,000 to to a balance of approximately 2,100,000.0. Emerald Creek Capital. On 04/23/2024, we exercised the one year extension option for the loans with Emerald Creek Capital to extend the maturity to 05/06/2025.

Speaker 2

Our plan is to exercise a further option to extend the maturity. Our National Australia Bank. On 04/04/2024, we extended the NAB loan maturity date to 07/31/2026, and NAB also provided a bridge facility of Australian 20,000,000. On 06/28/2024, we entered into an interest rate collar hedge agreement with NAB for an Australian 50,000,000 with the cap rate is 4.78% and the floor of 4.18%. Termination date of the agreement is 07/31/2026.

Speaker 2

On 12/17/2024, we extended the maturity of Australian dollar 20,000,000 bridge facility from March 31 to 04/30/2025. On 02/19/2025, we executed an amendment to lower the liquidity requirements from 5,000,000 to 2 and a half million until 04/30/2025. Westpac, on 08/13/2024, we increased our Westpac corporate credit facility by New Zealand Dollars Five Million to New Zealand Eighteen Point Eight Million. On 12/20/2024, we extended the maturity to 03/31/2025. On 01/31/2025, we repaid the loan, and the loan was discharged.

Speaker 2

With that, I will now turn it over to Andre.

Operator

Thanks, Gilbert. As usual, I'd like to thank our stockholders for forwarding questions to our Investor Relations e mail. And in addition to addressing many of your questions in the prepared remarks from Ellen and Gilbert, we've selected a few additional questions to offer additional insights from management. The first question, what are your capital allocation priorities for 2025? And how should we think about CapEx spending for this year and the next?

Operator

Ellen?

Speaker 1

In 2025, our highest priority is to reduce debt. However, we are working on plans right now to upgrade at least four theaters, one in Australia, Two in The US, and one in New Zealand. The upgrades would include, converting certain auditoriums to luxury recliner, seating and adding premium screens. But ultimately, the final execution of these plans will be subject to the strength of the box office over the next three quarters in 2025 and the execution of potential asset sales.

Operator

Thanks, Helen. We also received some stakeholder questions about the size of our global cinema portfolio. What are the recent underperforming theater closures? About how much annually will these closed theaters save the company in aggregate? How many Reading Cinema screens remain on difficult leases or are underperforming such that they are candidates for a 2025 closure?

Operator

And what are the expected cost savings of these decisions? Helen?

Speaker 1

In 2025, in The US, we're closing one, a US based cinema that we're closing at this month in April. Based on the box office trends over the last few years and the occupancy levels that would be required by the landlord, we'd expect the cash savings to be between $500,000 and a million dollars per year. In New Zealand, we did close another theater, a small theater a few months ago. And again, if you look at the box office trends over the last few years and the occupancy levels, we expect to save about maybe 100,000 to $200,000 a year. Right now, we've got no immediate plans to close any other theaters in The U.

Speaker 1

S, Australia or New Zealand. But I'll note that we are in communications with our landlords. And if there was an opportunity to exit a lease without any sort of economic penalty for a theater that doesn't have a consistent cash flow history, we would likely pursue that opportunity to continue to streamline our circuit.

Operator

Thanks again, Ellen. While you're on the roll, can you handle this one? Is your Australian cinema development project in Noosa still on track for 2026? Any other projected developments? What are the screen count, timing and milestones providing more info on the prospective projects known to be going forward?

Speaker 1

Yes. We're still working with the Stockwell development team on the Reading Cinema in Noosa, which is in Queensland, Australia. The project, which includes the cinema are in the town planning phases right now. And so today, we would expect the opening date to be pushed out a year or so, so likely a 2027 opening. And in Australia, while we're always monitoring the market for new cinema opportunities, whether it's an acquisition, a new build or a management deal, As of today, other than new set, we don't have any new deals to report to our stockholders.

Operator

Thanks, Ellen. And we'll finish up with this last question, which I'll field regarding the comment that we failed to follow through and deliver on it on our promise of two non deal roadshows and an additional microcap investor conference before the year end of 2024. And we had earlier said it was working on and has done nothing to engage with broader set of investors in all of 2024. Explain why not. Well, we'll take the mayor culpa, and rather than dwelling on the past, we have begun discussions with one of our analysts with a view to bringing to fruition the promised two nondeal roadshows during 2025.

Operator

Furthermore, we are finalizing our participation in a microcap virtual conference for mid May of this year. And then following these efforts, we will reevaluate the way forward for our investor relations strategy. And that marks the conclusion of our call. We appreciate you listening to the call today. We thank you for your attention, and we wish everyone good health and a safe 2025.

Operator

Thank you.

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Earnings Conference Call
Reading International Q4 2024
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