Thank you for joining Reading International's earnings call to discuss our 2024 Third Quarter Results. My name is Andrzej Matyczynski and I am Reading's Executive Vice President of Global Operations.

With me as usual are Ellen Cotter, our President and Chief Executive Officer; and Gilbert Avanes, our Executive Vice President, Chief Financial Officer and Treasurer. Before we begin the substance of the call, I will run through the usual caveats.

In accordance with the Safe Harbour 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 and 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. Reconciliations and definitions of non-GAAP financial measures, which are segment operating income, EBITDA and adjusted EBITDA are included in our recently issued 2024 third quarter earnings release on our company's website.

We have adjusted where applicable the EBITDA items we believe to be external to our business are not reflective of our costs of doing business or results of operations.

Such costs could include legal expenses relating to extra-ordinary litigation and any other items that we can consider to be non-recurring in accordance with a 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 theatre level cash flow, TLCF, which is theatre level revenue less direct theatre level expenses.

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&B SPP, which is a key performance indicator for our cinemas.

The F&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-Q and other filings with the U.S.

Securities and Exchange Commission. So, with that behind us, I'll turn it over to Ellen, who will review our 2024 third quarter results and discuss our business strategy going forward, followed by Gilbert who will provide a more detailed financial review.

Ellen?.

One, as of the third quarter of 2024, our U.S. based screen count decreased by 10% compared to the same quarter in 2023. We closed four theaters, two in Hawaii, one in California, one in Texas. Each of these theaters were underperforming, so we expect that the closures in the long term will improve our profitability.

Secondly, our New York City specialty theaters, the Angelica New York, [Villages] (ph), and Cinema 1, 2, and 3 all had much stronger box office in the third quarter of 2023 due to Oppenheimer and 70 millimeter projection at the Cinema 1, 2 and 3, and the Village East. There are Barbie grosses and grosses from past lives.

Overall, our specialty theaters in general perform better in the third quarter of 2023, driven by movies like, as I just mentioned, director Greta Gerwig's Barbie, director Chris Nolan's, Oppenheimer, director Wes Anderson's Asteroid City, and the critically acclaimed debut, Past Lives, from director Celine Song. With respect to our U.S.

circuit performance versus the industry, our analysis indicates that these US circuit metrics are generally favorable or in line with the industry. One, our box office of about $80,000 per screen, our F&B SPP of $8.24, our total cinema revenue of $144,000 per screen. When you analyze our operating expenses, we need to remember that 36% of our U.S.

cinema revenues are generated in Hawaii, 11% are generated in San Diego, and 10% are generated in New York City. Hawaii, New York, and California are generally regarded as among the most expensive states to do business.

Our occupancy and labor costs are much higher than other US operating environments and in Hawaii in particular almost every operating expense is more expensive than the mainland.

As I mentioned earlier we're looking forward to rolling out a new free to join rewards program in our commercial theaters which will line up with our free to join Angelica membership program. Today that program has about a 145,000 members who account for approximately 25% of all paid attendance for our Angelica cinemas within our U.S.

circuit based on year-to-date attendance. We're also developing a paid subscription program for all of our U.S. screens which we hope to launch in the next few months.

In addition, we've examined our F&B pricing and implemented a variety of price increases, but at the same time we've rolled out a special 2024 weekday deal program where guests seeking the best values can enjoy a different but compelling discount on our F&B menus every day of the week. Now let's turn to our cinemas in Australia and New Zealand.

In the third quarter of this year, our Australian cinema revenue increased 2% to $24.7 million versus Q3 2023. And our operating income decreased 17% to $2.9 million versus Q3 2023. In the third quarter of 2024, our New Zealand cinema revenues decreased 11% to $3.8 million versus third quarter of last year.

And the operating income decreased 54% to $250,000 versus the third quarter last year. As I mentioned earlier, while Deadpool and Wolverine and Inside Out were strong Q3 films, they were on balance, still not as strong for the Australian and New Zealand film industry as Barbie and Oppenheimer.

Notable milestones achieved during the third quarter of 2024 include the following, all in functional currency. Our Australian total revenues delivered the highest third quarter ever for our Australian cinemas at AUD37 million. Our Q3 2024 Australian F&B revenues of AUD16.5 million is the highest third quarter of all time.

Our Australian third quarter 2024 F&B SPP result of $7.90 is our highest ever quarterly result. With respect to our New Zealand cinemas, our Q3 2024 F&B SPP of $6.62 was the highest third quarter ever.

Our Q3 2024 screen advertising revenue in Australia was the highest third quarter ever, driven in part by the rollout of another circuit-wide click-to-pay promotional program with MasterCard. And we officially launched Angelica Rewards at the State Theater in Tasmania this quarter.

The new loyalty program is modeled off of our successful Angelica Rewards program at the Angelica in South City Square, Brisbane. Now let's turn to our global real estate business. I mentioned earlier the results of our global real estate operations compared to the third quarter of last year.

Our Q3 2024 global real estate total revenues of $4.9 million dipped by 3%, while our total operating income of $1.4 million increased by 52%.

Since our intercompany rents are reflected in our segment reporting, the recent decline in certain real estate metrics reflects the loss of rental income from the Q4 2023 sale of our Maitland property in New South Wales, Australia, and the Q1 2024 sale of our Culver City office building for $10 million.

In the third quarter of this year, our live theaters reported a 16% decline in revenues compared to the same period in 2023 due to the Orpheum being dark in the early months of the third quarter. In mid-September 2024 the Orpheum opened the Big Gay Jamboree which we expect to run through the end of 2024.

Audible, the Amazon company, continued to operate at our Menina Lane Theatre and in the third quarter of 2024 hosted the show I'm Almost There Todd Almond and is now playing Strategic Love Play. Recall that in April of 2024 we renewed the license agreement with Audible through March 15th of 2026 with a one-year extension.

Turning to our real estate assets in the US. To manage the remaining leasing at 44 Union Square, New York, we engaged George Comfort & Sons earlier in 2024. Over the past few months, George Comfort has worked with non-office users for the remaining 43,000 square foot space.

We've been working on one deal in particular that we believe has an interesting use that will be compelling in the Union Square area. However, we'll note that when we finished construction of the building at the start of the pandemic in 2020.

While we're clearly disappointed with the market conditions since that time, we believe that the market in general in the Union Square area is showing signs of improvement and we hope that this key union square anchor space will attract a strong credit-worthy tenant over the next six months.

As mentioned earlier, our company's key short-term priority is to lower our interest expense by reducing our debt. Our board 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.

This strategy will help us manage our financial obligations, while we await a full recovery in the global cinema industry. In the U.S. we've been advancing sales efforts on our Newberry Yard asset in Williamsport, Pennsylvania.

We recently resolved some necessary rail track easement issues and are engaging with certain parties about a purchase of the now 2024 acre site. One of our stockholders asked about the appraised value of New Berry Yard.

We don't report on the appraised or fair market values of our properties, however we'll note that the appraised value of this particular asset is well in excess of what we reported as the historic book value of Newberry Yard. Also, recall that there's no mortgage on this or any of our real assets. Now, turning to our international real estate assets.

Our third quarter 2024 Australian real estate revenue slightly increased to $3.1 million and our New Zealand real estate revenue of $372,000 slightly decreased compared to the third quarter of last year. As of September 30, 2024, we had 76 third-party tenants in our combined Australian and New Zealand real estate portfolio.

Our combined third-party tenant sales for the quarter from Australian real estate was AUD30.8 million. Our third-party occupancy rate remained strong at 96%. During the quarter we executed one new lease and two lease renewals.

Today, with respect to our international assets, we're marketing for sale our Cannon Park assets in Townsville, Australia, as well as our Rotorua property and five contiguous parcels in Wellington, New Zealand. We've been working with various groups on these Australian and New Zealand assets.

Our sales processes for each of these asset sales is ongoing as we're working with various groups on these Australian and New Zealand assets. In order to preserve the confidentiality of our ongoing negotiations, we don't intend to provide any updates until definitive sales documentation is executed and delivered.

Note, however, that there are no assurances that any acceptable transaction will be forthcoming with respect to any of these properties. Throughout 2024, we've worked with our lenders and landlords to secure financial relief and initiated another round of asset sales.

These steps will help us navigate through the remainder of 2024 and lay a stronger foundation for 2025 and beyond when we expect the global box office and cinema industry to be on a much brighter path. That wraps it up for me. I'll turn it over to Gilbert..

Thank you, Ellen. Consolidated revenue for the quarter ended September 30, 2024 decreased by $6.5 million to $60.1 million when compared to the third quarter of 2023. Consolidated revenue for the nine months ended September 30, 2024 decreased by $25.5 million to $152 million when compared to the nine months ended September 30 2023.

These decreases are attributable to lower attendance in all three countries as a result of closing cinemas in the U.S. along with lower performing titles for our theaters in the third quarter of 2024 compared to 2023. Slightly decreases in property rent revenue and lower U.S. live theater revenue. Net loss attributable to Redding International Inc.

for the quarter end at September 30, 2024, was $6.9 million compared to a loss of $4.4 million in Q3, 2023, a $2.5 million loss increased. Basic loss per share increased by $0.11 to a loss of $0.31 compared to a loss of $0.20 for Q3, 2023.

These results were primarily due to weakened cinema performance, increased interest expense, reduced property rent revenue, partially offset by reduced depreciation and G&A expenses. Net loss attributable to Reading International Inc.

for the nine months ended September 30, 2024 increased by $11.2 million to a loss of $29.5 million from a loss of $18.3 million when compared to a nine months ended September 30, 2023. Basic loss per share increased by $050 to a loss of $1.32 compared to a loss of $0.82 for the nine months of 2023.

These results were primarily due to decreased cinema segment result, increased interest expense, and a loss of sales of our Culver City office building, partially offset by reduced depreciation.

Our total company depreciation, amortization, impairment, and G&A expense for the quarter ended September 30, 2024 decreased by $1.1 million to $8.9 million compared to Q3 2023. For the nine months ended September 30, 2024, it decreased by $1.8 million to $27.8 million compared to the nine months ended September 30, 2023.

These decreases were due to decreases in depreciation and amortization as a result of the sale of our Maitland and Culver City property and no depreciation on our held for sale property along with decreases in G&A expenses. Income tax expense for the quarter ended September 30, 2024, decreased by $0.2 million compared to Q3 2023.

The change between 2024 and 2023 is primarily related to an increase in pre-tax loss in 2024. Income tax expense for the nine months ended September 30, 2024 increased by $0.01 million compared to the nine months ended September 30, 2023.

The change between 2024 and 2023 is primarily related to an increase in unrecognized tax benefit in 2024, partially offset by an increase in pre-tax loss in 2024. For the third quarter of 2024, our adjusted EBITDA income decreased by $3.2 million to an income of $2.9 million from an income of $6.1 million in Q3 2023.

For the nine months ended September 30, 2024, we have an adjusted EBITDA loss of $1.3 million compared to an EBITDA income of $10 million for the nine months ended September 30, 2023. These results were primarily the result of the weakened cinema and real estate performance, as mentioned previously.

Shifting to cash flow, for the nine months ended September 30, 2024, net cash used in operating activity increased by $5.4 million to $11.8 million, compared to the cash used in nine months ended September 30, 2023 of $6.4 million. This was primarily driven by an increase in net loss and offset by an increase in net payable.

Cash provided in investing activities during the nine months ended September 30, 2024 was $5 million compared to cash used in nine months ended September 30, 2023 of $6.2 million. This was primarily due to $9.7 million proceeds from sale of our Culver City office building in February 2024.

Cash provided in financing activity for the nine months ended September 30, 2024 increased by $6 million to $2.1 million compared to the cash used in nine months end at September 30, 2023. This was primarily due to new Bridge loan of $13.9 million from NAB on April 10, 2024 and an increase of $3.2 million for our Westpac loan on August 19, 2024.

The increase was partially offset by the payoff of citizens loan of $8.4 million following the sale of the Culver City office building $4 million scheduled loan repayment to Bank of America and 0$.3 million debt repayment to Santander on August 23, 2024.

Turning now to our financial position, our total assets on September 30, 2024, were $495.7 million compared to $533.1 million on December 31, 2023. This decrease was driven by $6.1 million decrease in cash and cash equivalent and receivables from which we fund our ongoing business operations.

$10 million decrease in operating properties as a result of the sale of a Culver City office and $11 million decrease in operating lease right of use assets. As of September 30, 2024, our total outstanding borrowings were $215 million compared to $210.3 million on December 31, 2023.

Our cash and cash equivalent as of September 30, 2024 were $10.1 million, which includes approximately $3.8 million in the U.S., $4.9 million in Australia, and $1.4 million in New Zealand.

Further, to address the liquidity pressure on our business, we're working with 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 2024, we completed the monetization of our Culver City LA office building for $10 million and fully discharged the related mortgage. In the third quarter of 2024, we made progress with our lenders on the following financing arrangements.

On August 1st, 2024, we extended the maturity of our $8 million loan with Santander Bank, which is secured by our Minetta and Orpheum theaters. That previously matured on June 1, 2024. The extended facility now matures on June 1, 2025.

Requires monthly principal and interest payments, $250,000 loan reduction upon signing, and another $250,000 before January 1st, 2025, with a balloon payment of the remaining balance on maturity. On August 13th, 2024, we increased our Westpac Bank Corporate Credit Facility by NZD5 million to NZD18.8 million.

In October, 2024, we extended an amendment to our Bank of America loan to defer the monthly principal payments of $500,000 in October, November, and December 2024 to the end of December 2024. In October 2024, we obtained two further six months extension for our loan with Valley National, the first of which we exercised.

In connection with these extensions, we have increased our cash deposit at Valley National Bank by $500,000 to $1.5 million. With that, I will now turn it over to Andre..

Thanks, Gilbert. First, I'd like to thank our stockholders for forwarding questions to our Invest Relations email. As usual, 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 insight from management.

The first of such questions, how many more auditoriums are planned for additions of recliners? When will the re-seating program be completed in 2024 and beyond? Ellen?.

In the US, we're targeting to convert 23 screens to luxury recliners in three theaters over the next 24 months. If these conversions were completed, that would result in almost 70% of our existing US circuit featuring recliners. We'd also be intending to create a premium screen concept in each of those theaters.

In Australia and New Zealand, we're also targeting to convert certain screens to luxury recliners over the next two years. The completion of these CapEx upgrades are subject to successful negotiations with various landlords, the improved movie slate, and obviously stronger liquidity position.

Assuming all goes well in this regard, our global circuit will be in a much better position to take advantage of the improved movie slate expected for 2025 and beyond..

Thanks, Ellen. Perhaps you can answer the next one as well. We just wanted to get a better sense of what needs to happen for the company to achieve results in the U.S. similar to what we saw in second quarter 2023 and third quarter 2023. Being mindful that the screen fleet is 10% smaller.

Also is it possible to quantify the difference from the specialty circuit year-on-year in third quarter? For the specialty circuit to produce these results again, is that something that can be done by a collection of good releases or does there have to be a major one-off release like Oppenheimer driving that performance? Ellen?.

First, let me reiterate that despite the reduction in revenues, we believe that the streamlining of our US circuit or the closure of those four theaters will in the long run boost our overall theater level cashflow since those theaters historically lost money or broke even depending on the time period.

While the third quarter of 2024 was not as strong as we would have liked we believe we'll have stronger results in the future based on the CapEx improvements that I talked about, which will improve our local market shares, the rollout of that free to join rewards and premium membership programs, and the better movie slate expected for 2025 and 2026 and 2027.

With respect to the box office for a US specialty circuit, it was off 32% quarter versus quarter with the Villages and the Cinema 1, 2, and 3 being off over 50% due to the over performance in 2023 of Oppenheimer in 70 millimeter.

We believe that the US specialty circuit, of course, can produce results like that again, however it's all totally driven by film product. For instance, so far in the month of November this year, the Angelica New York box office is up over 80% compared to prior period, led by Enora and Real Pain, both of which have performed really well.

And the Cinema 1, 2 and 3 is up over 50% led by the movie Conclave which is perfect for the audience on the upper east side..

Thank you Ellen. Next question, has any thought been given at selling the US cinema circuit? Seems like this might be a good idea considering the oversaturation in the US.

Ellen?.

Well, like I've been saying, we anticipate a much stronger movie slate from 2025 and beyond and even the holiday season in 2024. And our U.S. circuit, we anticipate, will return to producing acceptable levels of income, such that the U.S. Circuit's theater-level cash flow will contribute to the overall advancement of our global enterprise again.

While we generally believe that the U.S. market is over screened, we think that following our streamlining efforts, our remaining U.S.

debtors will return to income producing in 2025 and beyond after taking into account not only the improved movie schedule or expected movie schedule but also the strategic initiatives we have like CapEx upgrades and the rollout of the rewards in the membership program..

Thanks Ellen. The Santander Minetta and Orpheum theatre with secured term loan was only extended out a year from its due date and thus less than nine months from now.

Do you expect to refinance this loan with Santander or from another source? How much of a further increase in interest rate is expected to result from the refinancing term sheets you are pursuing? Gilbert?.

Despite our good relationship with our lenders, we are exploring our options with different lenders to make sure it is in the company and our shareholders best interest and matches our financing needs. We're closely monitoring how policy makers assess the economy, inflation, and the appropriate monetary policy.

As we shared previously, the Fed has recently had two rate cuts, 50 basis point in September and 25 basis point in November 2024. Because of that, we are optimistic that the interest rates will be trending downwards.

We will work with lenders that provide us with most flexibility, not just in terms of interest rate floors to ensure we reduce our interest rates into the future, but also take into account the fees and covenant which will impact the overall interest expense to Reading..

Thanks Gilbert. And the last question, what are your plans and sources of capital for the $5.9 million purchase price due in two weeks, the end of November 24, to related parties Sutton Hill for the Village East Ground lease. Well, I can handle that one.

We're working on a transaction to complete the acquisition of the remaining New York City property, the tenants interest in the Village East Ground lease, as envisioned by the master lease deal that was entered into with Sun Hill Capital well over 20 years ago.

That master lease transaction with Sun Hill brought us our interest in 44 Union Square, the Cinemas 1, 2 and 3, the Minetta Lane and Orpheum theatres. Acting under direction of our Audit and Conflicts Committee, our CFO and our General Counsel are working to develop and close a mutually agreeable transaction with the non-CODA partner of Sun Hill.

While no assurances can be given we anticipate that the Conflicts Committee will be able to report on the deal during our Q4 reporting period. And with that we'll bring the conference call to an end here. As usual we appreciate all of you with your questions and listening to this conference call and wish you all the best for the future. Thank you..