Quarterly Report • Nov 14, 2025
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Download Source FileUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 2025
OR
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __ to __
Commission file number 1-8625
READING INTERNATIONAL, INC.
(Exact name of Registrant as specified in its charter)
| Nevada State or other jurisdiction of incorporation or organization) | 95-3885184 (IRS Employer Identification Number) |
|---|---|
| 189 Second Avenue , Suite 2S New York , New York (Address of principal executive offices) | 10003 (Zip Code) |
Registrant’s telephone number, including area code: ( 213 ) 235-2240
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered |
|---|---|---|
| Class A Nonvoting Common Stock, $0.01 par value | RDI | The Nasdaq Stock Market LLC |
| Class B Voting Common Stock, $0.01 par value | RDIB | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer ¨ Accelerated Filer ¨ Non-Accelerated Filer þ Smaller Reporting Company þ Emerging Growth Company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of November 13, 2025, there were 21,036,670 shares of Class A Nonvoting Common Stock, $0.01 par value per share, and 1,680,590 shares of Class B Voting Common Stock, $0.01 par value per share, outstanding.
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READING INTERNATIONAL , INC. AND SUBSIDIARIES
TABLE OF CONTENTS
| Page | |
|---|---|
| PART I - Financial Information | 3 |
| Item 1 – Financial Statements | 3 |
| Consolidated Balance Sheets (Unaudited) | 3 |
| Consolidated Statements of Income (Unaudited) | 4 |
| Consolidated Statements of Comprehensive Income (Unaudited) | 5 |
| Consolidated Statements of Cash Flows (Unaudited) | 6 |
| Notes to Consolidated Financial Statements (Unaudited) | 7 |
| Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations | 28 |
| Item 3 – Quantitative and Qualitative Disclosure about Market Risk | 49 |
| Item 4 – Controls and Procedures | 51 |
| PART II – Other Information | 52 |
| Item 1 – Legal Proceedings | 52 |
| Item 1A – Risk Factors | 52 |
| Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds | 52 |
| Item 3 – Defaults Upon Senior Securities | 52 |
| Item 4 – Mine Safety Disclosure | 52 |
| Item 5 – Other Information | 52 |
| Item 6 – Exhibits | 53 |
| SIGNATURES | 54 |
| Certifications |
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PART 1 – FINANCIAL INFORMATION
Item 1 - Financial Statements
READING INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands, except share information)
| September 30, | December 31, | |
|---|---|---|
| 2025 | 2024 | |
| ASSETS | (Unaudited) | |
| Current Assets: | ||
| Cash and cash equivalents | $ 8,090 | $ 12,347 |
| Restricted cash | 2,458 | 2,735 |
| Receivables | 2,777 | 5,276 |
| Inventories | 1,655 | 1,685 |
| Prepaid and other current assets | 3,368 | 2,668 |
| Land and property held for sale | 460 | 32,331 |
| Total current assets | 18,808 | 57,042 |
| Operating property, net | 210,525 | 214,694 |
| Operating lease right-of-use assets | 161,400 | 160,873 |
| Investment in unconsolidated joint ventures | 3,447 | 3,138 |
| Goodwill | 24,576 | 23,712 |
| Intangible assets, net | 1,710 | 1,800 |
| Deferred tax asset, net | 1,591 | 953 |
| Other assets | 13,129 | 8,799 |
| Total assets | $ 435,186 | $ 471,011 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current Liabilities: | ||
| Accounts payable and accrued liabilities | $ 55,027 | $ 48,651 |
| Film rent payable | 3,458 | 5,820 |
| Debt - current portion | 16,451 | 69,193 |
| Derivative financial instruments - current portion | 131 | — |
| Taxes payable - current | 891 | 891 |
| Deferred revenue | 8,771 | 9,731 |
| Operating lease liabilities - current portion | 20,176 | 20,747 |
| Other current liabilities | 6,587 | 6,593 |
| Total current liabilities | 111,492 | 161,626 |
| Debt - long-term portion | 127,601 | 105,239 |
| Derivative financial instruments - non-current portion | — | 137 |
| Subordinated debt, net | 27,561 | 27,394 |
| Noncurrent tax liabilities | 6,384 | 6,041 |
| Operating lease liabilities - non-current portion | 161,593 | 161,702 |
| Other liabilities | 13,567 | 13,662 |
| Total liabilities | $ 448,198 | $ 475,801 |
| Commitments and contingencies (Note 16) | ||
| Stockholders’ equity: | ||
| Class A non-voting common shares, par value $ 0.01 , 100,000,000 shares authorized, | ||
| 33,972,781 issued and 21,036,670 outstanding at September 30, 2025 and | ||
| 33,681,705 issued and 20,745,594 outstanding at December 31, 2024 | 241 | 238 |
| Class B voting common shares, par value $ 0.01 , 20,000,000 shares authorized and | ||
| 1,680,590 issued and outstanding at September 30, 2025 and December 31, 2024 | 17 | 17 |
| Nonvoting preferred shares, par value $ 0.01 , 12,000 shares authorized and no issued | ||
| or outstanding shares at September 30, 2025 and December 31, 2024 | — | — |
| Additional paid-in capital | 159,087 | 157,751 |
| Retained earnings/(deficits) | ( 126,370 ) | ( 114,790 ) |
| Treasury shares | ( 40,407 ) | ( 40,407 ) |
| Accumulated other comprehensive income | ( 4,630 ) | ( 7,173 ) |
| Total Reading International, Inc. stockholders’ equity | ( 12,062 ) | ( 4,364 ) |
| Noncontrolling interests | ( 950 ) | ( 426 ) |
| Total stockholders’ equity | ( 13,012 ) | ( 4,790 ) |
| Total liabilities and stockholders’ equity | $ 435,186 | $ 471,011 |
See accompanying Notes to the Unaudited Consolidated Financial Statements.
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READING INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
( Unaudited; U.S. dollars in thousands, except per share data)
| Quarter Ended — September 30, | Nine Months Ended — September 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Revenue | ||||
| Cinema | $ 48,555 | $ 56,357 | $ 141,740 | $ 140,570 |
| Real estate | 3,615 | 3,733 | 10,976 | 11,381 |
| Total revenue | 52,170 | 60,090 | 152,716 | 151,951 |
| Costs and expenses | ||||
| Cinema | ( 42,742 ) | ( 49,468 ) | ( 126,203 ) | ( 132,944 ) |
| Real estate | ( 1,863 ) | ( 2,106 ) | ( 5,658 ) | ( 6,801 ) |
| Depreciation and amortization | ( 3,236 ) | ( 3,926 ) | ( 9,992 ) | ( 12,142 ) |
| General and administrative | ( 4,658 ) | ( 4,933 ) | ( 15,194 ) | ( 15,626 ) |
| Total costs and expenses | ( 52,499 ) | ( 60,433 ) | ( 157,047 ) | ( 167,513 ) |
| Operating income (loss) | ( 329 ) | ( 343 ) | ( 4,331 ) | ( 15,562 ) |
| Interest expense, net | ( 4,174 ) | ( 5,245 ) | ( 13,270 ) | ( 15,907 ) |
| Gain (loss) on sale of assets | ( 66 ) | ( 208 ) | 8,332 | ( 1,324 ) |
| Other income (expense) | 462 | ( 714 ) | ( 2,145 ) | ( 593 ) |
| Income (loss) before income tax expense and equity earnings of unconsolidated joint ventures | ( 4,107 ) | ( 6,510 ) | ( 11,414 ) | ( 33,386 ) |
| Equity earnings of unconsolidated joint ventures | 121 | 71 | 428 | 164 |
| Income (loss) before income taxes | ( 3,986 ) | ( 6,439 ) | ( 10,986 ) | ( 33,222 ) |
| Income tax benefit (expense) | ( 319 ) | ( 700 ) | ( 1,071 ) | ( 321 ) |
| Net income (loss) | $ ( 4,305 ) | $ ( 7,139 ) | $ ( 12,057 ) | $ ( 33,543 ) |
| Less: net income (loss) attributable to noncontrolling interests | ( 148 ) | ( 111 ) | ( 477 ) | ( 481 ) |
| Net income (loss) attributable to Reading International, Inc. | $ ( 4,157 ) | $ ( 7,028 ) | $ ( 11,580 ) | $ ( 33,062 ) |
| Basic earnings (loss) per share | $ ( 0.18 ) | $ ( 0.31 ) | $ ( 0.51 ) | $ ( 1.48 ) |
| Diluted earnings (loss) per share | $ ( 0.18 ) | $ ( 0.31 ) | $ ( 0.51 ) | $ ( 1.48 ) |
| Weighted average number of shares outstanding–basic | 22,717,260 | 22,426,184 | 22,631,660 | 22,394,385 |
| Weighted average number of shares outstanding–diluted | 22,717,260 | 22,426,184 | 22,631,660 | 22,394,385 |
See accompanying Notes to the Unaudited Consolidated Financial Statements .
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READING INTERNATIONAL, INC.
C ONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
( Unaudited; U.S. dollars in thousands)
| Quarter Ended — September 30, | Nine Months Ended — September 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Net income (loss) | $ ( 4,305 ) | $ ( 7,139 ) | $ ( 12,057 ) | $ ( 33,543 ) |
| Foreign currency translation gain (loss) | ( 770 ) | 1,620 | 2,384 | ( 44 ) |
| Gain (loss) on cash flow hedges | 104 | ( 171 ) | 6 | ( 269 ) |
| Other | 53 | 50 | 162 | 158 |
| Comprehensive income (loss) | ( 4,918 ) | ( 5,640 ) | ( 9,505 ) | ( 33,698 ) |
| Less: net income (loss) attributable to noncontrolling interests | ( 148 ) | ( 111 ) | ( 477 ) | ( 481 ) |
| Less: comprehensive income (loss) attributable to noncontrolling interests | — | 5 | 9 | 3 |
| Comprehensive income (loss) | $ ( 4,770 ) | ( 5,534 ) | $ ( 9,037 ) | $ ( 33,220 ) |
See accompanying Notes to the Unaudited Consolidated Financial Statements .
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READING INTERNATIONAL, INC.
CON SOLIDATED STATEMENTS OF CASH FLOWS
( Unaudited; U.S. dollars in thousands)
| Nine Months Ended | ||
|---|---|---|
| September 30, | ||
| 2025 | 2024 | |
| Operating Activities | ||
| Net income (loss) | $ ( 12,057 ) | $ ( 33,543 ) |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
| Equity earnings of unconsolidated joint ventures | ( 428 ) | ( 164 ) |
| Distributions of earnings from unconsolidated joint ventures | 337 | 695 |
| (Gain) loss recognized on foreign currency transactions | 2,200 | ( 83 ) |
| (Gain) loss on sale of assets | ( 8,332 ) | 1,324 |
| Amortization of operating leases | 16,648 | 15,500 |
| Amortization of finance leases | 31 | 31 |
| Change in operating lease liabilities | ( 16,126 ) | ( 16,212 ) |
| Change in net deferred tax assets | ( 534 ) | 71 |
| Depreciation and amortization | 9,992 | 12,142 |
| Other amortization | 891 | 1,107 |
| Stock based compensation expense | 1,521 | 1,737 |
| Net changes in operating assets and liabilities: | ||
| Receivables | 588 | 2,107 |
| Prepaid and other assets | ( 5,090 ) | ( 26 ) |
| Payments for accrued pension | ( 513 ) | ( 513 ) |
| Accounts payable and accrued expenses | 8,486 | 7,151 |
| Film rent payable | ( 2,474 ) | ( 2,420 ) |
| Taxes payable | ( 29 ) | ( 1,165 ) |
| Deferred revenue and other liabilities | ( 967 ) | 443 |
| Net cash provided by (used in) operating activities | ( 5,856 ) | ( 11,818 ) |
| Investing Activities | ||
| Purchases of and additions to operating and investment properties | ( 1,176 ) | ( 4,571 ) |
| Contributions to unconsolidated joint ventures | — | ( 30 ) |
| Proceeds from sale of assets | 38,498 | 9,590 |
| Net cash provided by (used in) investing activities | 37,322 | 4,989 |
| Financing Activities | ||
| Repayment of borrowings | ( 35,029 ) | ( 13,381 ) |
| Repayment of finance lease principal | ( 32 ) | ( 30 ) |
| Proceeds from borrowings | — | 16,027 |
| Capitalized borrowing costs | ( 872 ) | ( 483 ) |
| (Cash paid) proceeds from the settlement of employee share transactions | ( 182 ) | ( 6 ) |
| Noncontrolling interest distributions | ( 57 ) | — |
| Net cash provided by (used in) financing activities | ( 36,172 ) | 2,127 |
| Effect of exchange rate on cash and restricted cash | 172 | 744 |
| Net increase (decrease) in cash and cash equivalents and restricted cash | ( 4,534 ) | ( 3,958 ) |
| Cash and cash equivalents and restricted cash at the beginning of the period | 15,082 | 15,441 |
| Cash and cash equivalents and restricted cash at the end of the period | $ 10,548 | $ 11,483 |
| Cash and cash equivalents and restricted cash consists of: | ||
| Cash and cash equivalents | $ 8,090 | $ 10,083 |
| Restricted cash | 2,458 | 1,400 |
| $ 10,548 | $ 11,483 | |
| Supplemental Disclosures | ||
| Interest paid | $ 11,922 | $ 14,427 |
| Income taxes (refunded) paid | 2,309 | 1,638 |
| Non-Cash Transactions | ||
| Additions to operating and investing properties through accrued expenses | 487 | 940 |
See accompanying Notes to the Unaudited Consolidated Financial Statements .
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READING INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) As of and for the nine Months Ended September 30, 2025
NOTE 1 – DESCRIPTION OF BUSINESS AND SEGMENT REPORTING
Our Company
Reading International, Inc., a Nevada corporation (“RDI” and collectively with our consolidated subsidiaries and corporate predecessors, the “Company,” “Reading,” and “we,” “us,” or “our”) was incorporated in 1999. Our businesses consist primarily of:
the development, ownership, and operation of cinemas in the United States, Australia, and New Zealand; and
the development, ownership, operation and/or rental of retail, commercial and live venue real estate assets in Australia, New Zealand, and the United States.
NOTE 2 – LIQUIDITY AND IMPAIRMENT ASSESSMENT
Going Concern
We continue to evaluate the going concern assertion required by ASC 205-40 Going Concern as it relates to our Company. The evaluation of the going concern assertion involves considering whether it is probable that our Company has sufficient resources, as at the issue date of the financial statements, to meet its obligations as they fall due for twelve months following the issue date. Should it be probable that there are not sufficient resources, we must develop plans to overcome that shortfall. We must then determine whether it is probable that our plans will be effectively implemented and will mitigate the consequential going concern substantial doubt.
We have $ 16.5 million of debt due in twelve months, cash of $ 10.5 million and negative working capital of $ 92.7 million. As a result, we have developed a plan to address and overcome the going concern uncertainty. Our plan is informed by current liquidity positions, debt obligations, our beliefs about the marketability of certain real estate properties, our beliefs about the recovery of the global cinema industry, cash flow estimates, known capital and other expenditure requirements and commitments and our current business plan and strategies. Our Company’s business plan - two businesses (real estate and cinema) in three countries (Australia, New Zealand and the U.S.) - has served us well historically and is key to management’s overall evaluation of ASC 205-40 Going Concern.
While we believe that, with an increase in the quantity and quality of films being released to cinemas compared to pre-pandemic levels, patronage and operating revenue levels will improve, we have no control over attendance levels and no assurances can be given as to the nature of the reception of future movies by the movie-going public.
We have begun the process of refinancing and/or extending certain loans, as further discussed in Note 13 - Borrowings . On January 31, 2025, we repaid our $ 10.7 million Westpac loan. On February 5, 2025, we repaid $ 6.1 million of our Bank of America facility, taking the balance to $ 8.7 million. On July 3, 2025, we extended the maturity date of this loan to May 18, 2026. On February 26, 2025, we exercised our option to extend our Valley National debt to October 1, 2025. On May 2, 2025, we extended our Emerald Creek Capital loan to November 6, 2026. On May 21, 2025, we sold our Cannon Park property for $ 20.7 million, and repaid our $ 12.9 million NAB bridging facility and $ 970,000 on our NAB Core Facility. On July 18, 2025, we extended the maturity date of our Santander loan to June 1, 2026. On November 12, we extended our NAB facility by five years , and on November 13, we extended our Valley National debt of $ 20.4 million to October 1, 2026.
Moreover, we intend to raise the liquidity necessary for the next twelve months from refinancings and real estate asset monetization. Management has been authorized to pursue such actions where necessary. We believe we have more than sufficient marketable real estate assets that can be monetized on a timely basis and at the values required to meet our funding needs over the next twelve months. After having sold nine property assets with combined proceeds of $ 201.5 million since 2021, we have demonstrated our ability to complete real estate asset monetizations.
In conclusion, as of the date of issuance of these financial statements, based on our evaluation of ASC 205-40 Going Concern and the current conditions and events, considered in the aggregate, and our various plans for enhancing liquidity and the extent to which those plans are progressing, we conclude that our plan to raise sufficient liquidity primarily through certain real estate asset monetizations to the extent needed is probable of being implemented to the extent required such that this alleviates the substantial doubt about our Company’s ability to continue as a going concern.
Impairment Considerations
Our Company considers that the events and factors described above constitute impairment indicators under ASC 360 Property, Plant and Equipment . At December 31, 2024, our Company performed a quantitative recoverability test of the carrying values of all its asset
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groups. Our Company estimated the undiscounted future cash flows expected to result from the use of these asset groups and found that no impairment charge was necessary. The nine months to September 30, 2025, produced higher revenues and operating income compared to the same period in 2024, and we believe that this improved performance at an asset group level will continue throughout the remaining quarter of 2025. As a result, we recorded no impairment charges for the nine months to September 30, 2025. Actual performance against our forecasts is dependent on several variables and conditions, many of which are subject to the uncertainties associated with among other things, the factors presented above, and as a result, actual results may materially differ from management’s estimates.
Our Company also considers that the events and factors described above continue to constitute impairment indicators under ASC 350 Intangibles – Goodwill and Other . Our Company performed a quantitative goodwill impairment test and determined that our goodwill was not impaired as of December 31, 2024. The test was performed at a reporting unit level by comparing each reporting unit’s carrying value, including goodwill, to its fair value. The fair value of each reporting unit was assessed using a discounted cash flow model based on the budgetary revisions performed by management in response to COVID-19 and the developing market conditions. No impairment charges were recorded in the nine months to September 30, 2025. Actual performance against our forecasts is dependent on several variables and conditions, including among other things, the factors presented above, and as a result, actual results may materially differ from management’s estimates.
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Consolidation
The accompanying consolidated financial statements include the accounts of our Company’s wholly-owned subsidiaries as well as majority-owned subsidiaries that our Company controls and should be read in conjunction with our Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2024 (“2024 Form 10-K”). All significant intercompany balances and transactions have been eliminated on consolidation. These consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim reporting with the instructions for Form 10-Q and Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (“SEC”). As such, they do not include all information and footnotes required by U.S. GAAP for complete financial statements. We believe that we have included all normal and recurring adjustments necessary for a fair presentation of the results for the interim period.
Operating results for the quarter and nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and footnotes thereto. Significant estimates include (i) projections we make regarding the recoverability and impairment of our assets (including goodwill and intangibles), (ii) valuations of our derivative instruments, (iii) recoverability of our deferred tax assets, (iv) estimation of breakage and redemption experience rates, which drive how we recognize breakage on our gift card and gift certificates, and revenue from our customer loyalty programs, and (v) estimation of our Incremental Borrowing Rate (“IBR”) as relates to the valuation of our right-of-use assets and lease liabilities. Actual results may differ from those estimates .
Recently Adopted and Issued Accounting Pronouncements
Adopted:
ASU 2023-07 Segment Reporting: Improvements to Reportable Segment Disclosures
On December 16, 2024, we adopted ASU 2023-07: Segment Reporting: Improvements to Reportable Segment Disclosures. This ASU expends the disclosures required by public entities for reportable segments. Adoption of the ASU has had no material effect on our consolidated financial statements from a recognition and measurement perspective, and has not altered our reportable segments, but has enhanced our disclosure of certain expenses and profitability measurement.
Recently Announced:
ASU 2023-09 Income Taxes: Improvements to Income Tax Disclosures
In December 2023, the FASB issued ASC 2023-09 Income Taxes: Improvements to Income Tax Disclosures (“ASU 2023-09”). The amendments in ASU 2023-09 require entities to disclose on an annual basis (i) specific categories in the rate reconciliation and (ii) provide additional information for reconciling items that meet a quantitative threshold. The amendments also require that entities disclose various information about income taxes paid and (i) income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and (ii) foreign and income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign. ASU 2023-09 is effective for the Company for the year ended December 31, 2025.
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ASU 2024-03 Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures
In November 2024, the FASB issued ASC 2024-03, Income Statement (Subtopic 220-40)—Reporting Comprehensive Income-Expense Disaggregation Disclosures (“ASU 2024-03”). The amendments in ASU 2024-03 require that public business entities disclose additional information about specific expense categories in the notes to financial statements for interim and annual reporting periods. ASU 2024-03 is effective for the Company for the year ended December 31, 2027.
NOTE 4 – SEGMENT REPORTING
We report information about operating segments in accordance with ASC 280-10 Segment Reporting, which requires financial information to be reported based on the way management organizes segments with a company for making operating decisions and evaluating performance. We have organized our business into two reportable segments, being cinema exhibition and real estate.
Our cinema exhibition segment aggregates all our cinemas, both leased and owned, across the United States, Australia and New Zealand. Each of our cinemas earns revenue through the sale of movie tickets, food and beverage, screen advertising, theatre rentals, merchandise, gift card and loyalty membership, and other ancillary sales. The segment also earns revenue through service fees related to online ticket sales. Expenses are incurred through film rent, wages and salaries, food and beverage costs, occupancy costs, utilities, and other ancillary costs. We further organize this segment by geography, as while all our cinemas are engaged in substantially the same business activities, each geography is subject to its own unique regulatory and business conditions.
Our real estate segment aggregates all our retail, commercial and live theatre real estate assets across Australia, New Zealand, and the United States. Our retail and commercial real estate assets earn revenue through the leasing or licensing of space to third party tenants.
Our live theatre assets in the United States earn revenue through leasing or licensing space to third party production companies, an activity we consider sufficiently similar to our broader real estate base to support inclusion in our real estate segment. Our live theatre operations also earn revenue by providing front of house and box office services and through concession sale of food and beverage. All of our real estate assets incur expenses from property maintenance, utilities, taxes, and other costs of maintaining real estate and in some cases third party property management.
Each of these segments has discrete and separate financial information and for which operating results are evaluated regularly by our President, Chief Executive Officer and Vice Chair of the Board of Directors, the chief operating decision-maker (“CODM”) of the Company. The CODM is responsible for the allocation of resources to, and the assessment of the performance of, our operating segments. The CODM determines, among other things:
the execution, renewal or termination of cinema leases
the execution, renewal or termination of third-party tenant leases
significant capital expenditures
internal resource allocation
operational budgets.
Segment operating income is a key measure of profit or loss used by the CODM to assess segment performance and allocate resources. Segment operating income includes certain amounts charged by our real estate segment to our cinema exhibition segment where a cinema exhibition is a tenant of the real estate segment. These charges are eliminated for consolidated financial statement purposes in the consolidated income statement, but are presented gross to the CODM.
The tables below summarize the results of operations for each of our business segments, presenting a reconciliation of segment revenue to operating segment income, and the impact of inter-segment transactions.
| Quarter Ended | Quarter Ended | Nine Months Ended | Nine Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, 2025 | September 30, 2024 | September 30, 2025 | September 30, 2024 | |||||||||
| (Dollars in thousands) | Cinema | Real Estate | Total | Cinema | Real Estate | Total | Cinema | Real Estate | Total | Cinema | Real Estate | Total |
| Revenue - third party | $ 48,555 | $ 3,615 | $ 52,170 | $ 56,357 | $ 3,733 | $ 60,090 | $ 141,740 | $ 10,976 | $ 152,716 | $ 140,570 | $ 11,381 | $ 151,951 |
| Inter-segment revenue (1) | — | 952 | 952 | — | 1,165 | 1,165 | — | 3,089 | 3,089 | — | 3,463 | 3,463 |
| Total segment revenue | 48,555 | 4,567 | 53,122 | 56,357 | 4,898 | 61,255 | 141,740 | 14,065 | 155,805 | 140,570 | 14,844 | 155,414 |
| Operating expense | ||||||||||||
| Operating Expense - Third Party | ( 42,742 ) | ( 1,863 ) | ( 44,605 ) | ( 49,468 ) | ( 2,106 ) | ( 51,574 ) | ( 126,203 ) | ( 5,658 ) | ( 131,861 ) | ( 132,944 ) | ( 6,801 ) | ( 139,745 ) |
| Inter-Segment Operating Expenses (1) | ( 952 ) | — | ( 952 ) | ( 1,165 ) | — | ( 1,165 ) | ( 3,089 ) | — | ( 3,089 ) | ( 3,463 ) | — | ( 3,463 ) |
| Total of services and products (excluding depreciation and amortization) | ( 43,694 ) | ( 1,863 ) | ( 45,557 ) | ( 50,633 ) | ( 2,106 ) | ( 52,739 ) | ( 129,292 ) | ( 5,658 ) | ( 134,950 ) | ( 136,407 ) | ( 6,801 ) | ( 143,208 ) |
| Depreciation and amortization | ( 2,045 ) | ( 1,115 ) | ( 3,160 ) | ( 2,608 ) | ( 1,210 ) | ( 3,818 ) | ( 6,358 ) | ( 3,341 ) | ( 9,699 ) | ( 7,753 ) | ( 4,084 ) | ( 11,837 ) |
| General and administrative expense | ( 1,060 ) | ( 202 ) | ( 1,262 ) | ( 903 ) | ( 186 ) | ( 1,089 ) | ( 3,358 ) | ( 605 ) | ( 3,963 ) | ( 2,973 ) | ( 725 ) | ( 3,698 ) |
| Total operating expense | ( 46,799 ) | ( 3,180 ) | ( 49,979 ) | ( 54,144 ) | ( 3,502 ) | ( 57,646 ) | ( 139,008 ) | ( 9,604 ) | ( 148,612 ) | ( 147,133 ) | ( 11,610 ) | ( 158,743 ) |
| Segment operating income (loss) | $ 1,756 | $ 1,387 | $ 3,143 | $ 2,213 | $ 1,396 | $ 3,609 | $ 2,732 | $ 4,461 | $ 7,193 | $ ( 6,563 ) | $ 3,234 | $ ( 3,329 ) |
(1)Inter-segment Revenues and Operating Expense relates to the internal charge between the two segments where the cinema operates within real estate owned within the group.
9
A reconciliation of cinema exhibition segment revenue to segment operating income for the quarter and nine months ended September 30, 2025 and September 30, 2024, is as follows:
| (Dollars in thousands) | Quarter Ended — September 30, 2025 | September 30, 2024 | Nine Months Ended — September 30, 2025 | September 30, 2024 | |
|---|---|---|---|---|---|
| REVENUE | |||||
| United States | Admissions revenue | $ 13,784 | $ 15,445 | $ 40,128 | $ 39,368 |
| Concessions revenue | 9,276 | 9,824 | 26,659 | 24,237 | |
| Advertising and other revenue | 2,062 | 2,547 | 6,889 | 6,996 | |
| $ 25,122 | $ 27,816 | $ 73,676 | $ 70,601 | ||
| Australia | Admissions revenue | $ 12,396 | $ 14,445 | $ 36,301 | $ 35,559 |
| Concessions revenue | 6,459 | 8,691 | 18,528 | 20,805 | |
| Advertising and other revenue | 1,657 | 1,609 | 4,274 | 4,248 | |
| $ 20,512 | $ 24,745 | $ 59,103 | $ 60,612 | ||
| New Zealand | Admissions revenue | $ 1,836 | $ 2,215 | $ 5,718 | $ 5,559 |
| Concessions revenue | 906 | 1,339 | 2,807 | 3,262 | |
| Advertising and other revenue | 179 | 242 | 436 | 536 | |
| $ 2,921 | $ 3,796 | $ 8,961 | $ 9,357 | ||
| Total revenue | $ 48,555 | $ 56,357 | $ 141,740 | $ 140,570 | |
| OPERATING EXPENSE | |||||
| United States | Film rent and advertising cost | $ ( 7,557 ) | $ ( 8,783 ) | $ ( 21,723 ) | $ ( 21,192 ) |
| Food & beverage cost | ( 2,344 ) | ( 2,632 ) | ( 6,858 ) | ( 6,550 ) | |
| Occupancy expense | ( 4,112 ) | ( 5,198 ) | ( 12,499 ) | ( 17,530 ) | |
| Labor cost | ( 4,184 ) | ( 4,657 ) | ( 12,477 ) | ( 12,807 ) | |
| Utilities | ( 1,657 ) | ( 1,957 ) | ( 4,207 ) | ( 4,602 ) | |
| Cleaning and maintenance | ( 1,751 ) | ( 1,914 ) | ( 5,046 ) | ( 4,998 ) | |
| Other operating expenses | ( 1,872 ) | ( 1,860 ) | ( 6,339 ) | ( 6,078 ) | |
| $ ( 23,477 ) | $ ( 27,001 ) | $ ( 69,149 ) | $ ( 73,757 ) | ||
| Australia | Film rent and advertising cost | $ ( 5,484 ) | $ ( 6,775 ) | $ ( 16,026 ) | $ ( 16,170 ) |
| Food & beverage cost | ( 1,328 ) | ( 1,922 ) | ( 3,934 ) | ( 4,631 ) | |
| Occupancy expense | ( 4,415 ) | ( 4,673 ) | ( 13,221 ) | ( 13,612 ) | |
| Labor cost | ( 3,377 ) | ( 3,794 ) | ( 10,108 ) | ( 10,510 ) | |
| Utilities | ( 815 ) | ( 719 ) | ( 2,308 ) | ( 2,171 ) | |
| Cleaning and maintenance | ( 1,163 ) | ( 1,352 ) | ( 3,466 ) | ( 3,728 ) | |
| Other operating expenses | ( 903 ) | ( 966 ) | ( 2,477 ) | ( 2,747 ) | |
| $ ( 17,485 ) | $ ( 20,201 ) | $ ( 51,540 ) | $ ( 53,569 ) | ||
| New Zealand | Film rent and advertising cost | $ ( 803 ) | $ ( 1,048 ) | $ ( 2,592 ) | $ ( 2,482 ) |
| Food & beverage cost | ( 159 ) | ( 273 ) | ( 575 ) | ( 703 ) | |
| Occupancy expense | ( 746 ) | ( 804 ) | ( 2,216 ) | ( 2,347 ) | |
| Labor cost | ( 504 ) | ( 631 ) | ( 1,617 ) | ( 1,786 ) | |
| Utilities | ( 173 ) | ( 114 ) | ( 407 ) | ( 311 ) | |
| Cleaning and maintenance | ( 182 ) | ( 256 ) | ( 572 ) | ( 650 ) | |
| Other operating expenses | ( 165 ) | ( 305 ) | ( 624 ) | ( 802 ) | |
| $ ( 2,732 ) | $ ( 3,431 ) | $ ( 8,603 ) | $ ( 9,081 ) | ||
| Total operating expense | $ ( 43,694 ) | $ ( 50,633 ) | $ ( 129,292 ) | $ ( 136,407 ) | |
| DEPRECIATION, AMORTIZATION, GENERAL AND ADMINISTRATIVE EXPENSE | |||||
| United States | Depreciation and amortization | $ ( 1,043 ) | $ ( 1,259 ) | $ ( 3,321 ) | $ ( 3,784 ) |
| General and administrative expense | ( 674 ) | ( 513 ) | ( 2,130 ) | ( 1,885 ) | |
| $ ( 1,717 ) | $ ( 1,772 ) | $ ( 5,451 ) | $ ( 5,669 ) | ||
| Australia | Depreciation and amortization | $ ( 895 ) | $ ( 1,237 ) | $ ( 2,714 ) | $ ( 3,619 ) |
| General and administrative expense | ( 314 ) | ( 389 ) | ( 1,086 ) | ( 1,087 ) | |
| $ ( 1,209 ) | $ ( 1,626 ) | $ ( 3,800 ) | $ ( 4,706 ) | ||
| New Zealand | Depreciation and amortization | $ ( 107 ) | $ ( 112 ) | $ ( 323 ) | $ ( 350 ) |
| General and administrative expense | ( 72 ) | ( 1 ) | ( 142 ) | ( 1 ) | |
| $ ( 179 ) | $ ( 113 ) | $ ( 465 ) | $ ( 351 ) | ||
| Total depreciation, amortization, general and administrative expense | $ ( 3,105 ) | $ ( 3,511 ) | $ ( 9,716 ) | $ ( 10,726 ) | |
| OPERATING INCOME (LOSS) - CINEMA | |||||
| United States | $ ( 72 ) | $ ( 957 ) | $ ( 924 ) | $ ( 8,825 ) | |
| Australia | 1,818 | 2,918 | 3,763 | 2,337 | |
| New Zealand | 10 | 252 | ( 107 ) | ( 75 ) | |
| Total Cinema operating income (loss) | $ 1,756 | $ 2,213 | $ 2,732 | $ ( 6,563 ) |
10
A reconciliation of real estate segment revenue to segment operating income for the quarter and nine months ended September 30, 2025 and September 30, 2024, is as follows:
| (Dollars in thousands) | Quarter Ended — September 30, 2025 | September 30, 2024 | Nine Months Ended — September 30, 2025 | September 30, 2024 | |
|---|---|---|---|---|---|
| REVENUE | |||||
| United States | Live theatre rental and ancillary income | $ 902 | $ 391 | $ 2,075 | $ 1,220 |
| Property rental income | 1,050 | 1,053 | 3,164 | 3,192 | |
| 1,952 | 1,444 | 5,239 | 4,412 | ||
| Australia | Property rental income | 2,394 | 3,082 | 8,150 | 9,342 |
| New Zealand | Property rental income | 221 | 372 | 676 | 1,090 |
| Total revenue | $ 4,567 | $ 4,898 | $ 14,065 | $ 14,844 | |
| OPERATING EXPENSE | |||||
| United States | Live theatre cost | $ ( 304 ) | $ ( 196 ) | $ ( 796 ) | $ ( 706 ) |
| Occupancy expense | ( 207 ) | ( 167 ) | ( 559 ) | ( 521 ) | |
| Utilities | ( 22 ) | ( 9 ) | ( 50 ) | ( 88 ) | |
| Cleaning and maintenance | ( 52 ) | ( 37 ) | ( 158 ) | ( 115 ) | |
| Other operating expenses | ( 288 ) | ( 245 ) | ( 718 ) | ( 865 ) | |
| $ ( 873 ) | $ ( 654 ) | $ ( 2,281 ) | $ ( 2,295 ) | ||
| Australia | Occupancy expense | $ ( 421 ) | $ ( 509 ) | $ ( 1,389 ) | $ ( 1,477 ) |
| Labor cost | ( 42 ) | ( 69 ) | ( 161 ) | ( 182 ) | |
| Utilities | ( 67 ) | ( 22 ) | ( 101 ) | ( 55 ) | |
| Cleaning and maintenance | ( 198 ) | ( 232 ) | ( 634 ) | ( 726 ) | |
| Other operating expenses | ( 191 ) | ( 165 ) | ( 648 ) | ( 697 ) | |
| $ ( 919 ) | $ ( 997 ) | $ ( 2,933 ) | $ ( 3,137 ) | ||
| New Zealand | Occupancy expense | $ ( 6 ) | $ ( 129 ) | $ ( 95 ) | $ ( 350 ) |
| Labor cost | — | ( 6 ) | ( 2 ) | ( 17 ) | |
| Utilities | — | ( 13 ) | ( 5 ) | ( 49 ) | |
| Cleaning and maintenance | — | ( 15 ) | ( 4 ) | ( 33 ) | |
| Other operating expenses | ( 65 ) | ( 292 ) | ( 338 ) | ( 920 ) | |
| $ ( 71 ) | $ ( 455 ) | $ ( 444 ) | $ ( 1,369 ) | ||
| Total operating expense | $ ( 1,863 ) | $ ( 2,106 ) | $ ( 5,658 ) | $ ( 6,801 ) | |
| DEPRECIATION, AMORTIZATION, GENERAL AND ADMINISTRATIVE EXPENSE | |||||
| United States | Depreciation and amortization | $ ( 658 ) | $ ( 673 ) | $ ( 1,991 ) | $ ( 2,089 ) |
| General and administrative expense | ( 168 ) | ( 193 ) | ( 483 ) | ( 673 ) | |
| ( 826 ) | ( 866 ) | ( 2,474 ) | ( 2,762 ) | ||
| Australia | Depreciation and amortization | $ ( 397 ) | $ ( 490 ) | $ ( 1,173 ) | $ ( 1,632 ) |
| General and administrative expense | ( 34 ) | 7 | ( 121 ) | ( 52 ) | |
| ( 431 ) | ( 483 ) | ( 1,294 ) | ( 1,684 ) | ||
| New Zealand | Depreciation and amortization | ( 60 ) | ( 47 ) | ( 177 ) | ( 363 ) |
| General and administrative expense | — | — | ( 1 ) | — | |
| ( 60 ) | ( 47 ) | ( 178 ) | ( 363 ) | ||
| Total depreciation, amortization, general and administrative expense | $ ( 1,317 ) | $ ( 1,396 ) | $ ( 3,946 ) | $ ( 4,809 ) | |
| OPERATING INCOME (LOSS) - REAL ESTATE | |||||
| United States | $ 253 | $ ( 76 ) | $ 484 | $ ( 645 ) | |
| Australia | 1,044 | 1,602 | 3,923 | 4,521 | |
| New Zealand | 90 | ( 130 ) | 54 | ( 642 ) | |
| Total real estate operating income (loss) | $ 1,387 | $ 1,396 | $ 4,461 | $ 3,234 |
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A reconciliation of segment operating income to income before income taxes is as follows:
| (Dollars in thousands) | Quarter Ended — September 30, 2025 | September 30, 2024 | Nine Months Ended — September 30, 2025 | September 30, 2024 |
|---|---|---|---|---|
| Segment operating income (loss) | $ 3,143 | $ 3,609 | $ 7,193 | $ ( 3,329 ) |
| Unallocated corporate expense: | ||||
| Depreciation and amortization expense | ( 75 ) | ( 106 ) | ( 293 ) | ( 305 ) |
| General and administrative expense | ( 3,397 ) | ( 3,846 ) | ( 11,231 ) | ( 11,928 ) |
| Interest expense, net | ( 4,174 ) | ( 5,245 ) | ( 13,270 ) | ( 15,907 ) |
| Equity earnings (loss) of unconsolidated joint ventures | 121 | 71 | 428 | 164 |
| Gain (loss) on sale of assets | ( 66 ) | ( 208 ) | 8,332 | ( 1,324 ) |
| Other (expense) income | 462 | ( 714 ) | ( 2,145 ) | ( 593 ) |
| Income (loss) before income taxes | $ ( 3,986 ) | $ ( 6,439 ) | $ ( 10,986 ) | $ ( 33,222 ) |
Assuming cash and cash equivalents are accounted for as corporate assets, total assets by business segment and by country are presented as follows:
| September 30, | December 31, | |
|---|---|---|
| (Dollars in thousands) | 2025 | 2024 |
| By segment: | ||
| Cinema | $ 184,983 | $ 191,008 |
| Real estate | 176,407 | 207,044 |
| Corporate (1) | 73,796 | 72,959 |
| Total assets | $ 435,186 | $ 471,011 |
| By country: | ||
| United States | $ 248,690 | $ 264,284 |
| Australia | 162,505 | 167,667 |
| New Zealand | 23,991 | 39,060 |
| Total assets | $ 435,186 | $ 471,011 |
(1) Corporate Assets includes cash and cash equivalents of $ 10.5 million and $ 7.0 million as of September 30, 2025 and December 31, 2024, respectively.
The following table sets forth our operating properties by country:
| September 30, | December 31, | |
|---|---|---|
| (Dollars in thousands) | 2025 | 2024 |
| United States | $ 141,696 | $ 146,531 |
| Australia | 59,804 | 59,081 |
| New Zealand | 9,025 | 9,082 |
| Total operating property | $ 210,525 | $ 214,694 |
The table below summarizes capital expenditures for the nine months ended September 30, 2025
| (Dollars in thousands) | Nine Months Ended — September 30, 2025 | September 30, 2024 |
|---|---|---|
| Segment capital expenditures | $ 1,411 | $ 2,028 |
| Corporate capital expenditures | — | — |
| Total capital expenditures | $ 1,411 | $ 2,028 |
NOTE 5 – OPERATIONS IN FOREIGN CURRENCY
We have significant assets in Australia and New Zealand. Historically, we have conducted our Australian and New Zealand operations (collectively “foreign operations”) on a self-funding basis, where we use cash flows generated by our foreign operations to pay for the expenses of those foreign operations. However, in recent periods, cash flows from our overseas operations have been used to cover our domestic general and administrative costs, interest expense, and losses from our domestic cinema operations. Our Australian and New Zealand assets and liabilities are translated from their functional currencies of Australian dollar (“AU$”) and New Zealand dollar (“NZ$”), respectively, to the U.S. dollar based on the exchange rate as of September 30, 2025. The carrying value of the assets and liabilities of our foreign operations fluctuates as a result of changes in the exchange rates between the functional currencies of the foreign
12
operations and the U.S. dollar. The translation adjustments are accumulated in the Accumulated Other Comprehensive Income in the Consolidated Balance Sheets.
We take a global view of our financial resources and are flexible in making use of resources from one jurisdiction in other jurisdictions.
Presented in the table below are the currency exchange rates for Australia and New Zealand:
| Foreign Currency / USD — As of and for the quarter ended | As of and for the twelve months ended | As of and for the quarter ended | |
|---|---|---|---|
| September 30, 2025 | December 31, 2024 | September 30, 2024 | |
| Spot Rate | |||
| Australian Dollar | 0.6614 | 0.6185 | 0.6934 |
| New Zealand Dollar | 0.5799 | 0.5596 | 0.6363 |
| Average Rate | |||
| Australian Dollar | 0.6543 | 0.6596 | 0.6700 |
| New Zealand Dollar | 0.5926 | 0.6051 | 0.6117 |
NOTE 6 – EARNINGS PER SHARE
Basic earnings per share (“EPS”) is calculated by dividing the net income attributable to our Company by the weighted average number of common shares outstanding during the period. Diluted EPS is calculated by dividing the net income attributable to our Company by the weighted average number of common and common equivalent shares outstanding during the period and is calculated using the treasury stock method for equity-based compensation awards.
The following table sets forth the computation of basic and diluted EPS and a reconciliation of the weighted average number of common and common equivalent shares outstanding:
| Quarter Ended — September 30, | Nine Months Ended — September 30, | |||
|---|---|---|---|---|
| (Dollars in thousands, except share data) | 2025 | 2024 | 2025 | 2024 |
| Numerator: | ||||
| Net income (loss) attributable to Reading International, Inc. | $ ( 4,157 ) | $ ( 7,028 ) | $ ( 11,580 ) | $ ( 33,062 ) |
| Denominator: | ||||
| Weighted average number of common stock – basic | 22,717,260 | 22,426,184 | 22,631,660 | 22,394,385 |
| Weighted average dilutive impact of awards | — | — | — | — |
| Weighted average number of common stock – diluted | 22,717,260 | 22,426,184 | 22,631,660 | 22,394,385 |
| Basic earnings (loss) per share | $ ( 0.18 ) | $ ( 0.31 ) | $ ( 0.51 ) | $ ( 1.48 ) |
| Diluted earnings (loss) per share | $ ( 0.18 ) | $ ( 0.31 ) | $ ( 0.51 ) | $ ( 1.48 ) |
| Awards excluded from diluted earnings (loss) per share | 3,696,662 | 207,657 | 3,696,662 | 207,657 |
Our weighted average number of common stock - basic increased, primarily as a result of the vesting of restricted stock units. We did no t repurchase any shares of Class A Common Stock during the first nine months of 2025 or 2024.
Outstanding awards of 3,696,662 shares for the period ended September 30, 2025 and 207,657 shares for the period ended September 30, 2024 were excluded from the computation of dilutive shares, as they were anti-dilutive because of the net loss from continuing operations.
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Note 7 – Property and Equipment
Operating Property, net
Property associated with our operating activities as at September 30, 2025 and December 31, 2024, is summarized as follows:
| September 30, | December 31, | |
|---|---|---|
| (Dollars in thousands) | 2025 | 2024 |
| Land | $ 48,281 | $ 47,267 |
| Building and improvements | 170,565 | 166,451 |
| Leasehold improvements | 48,581 | 49,444 |
| Fixtures and equipment | 148,331 | 143,773 |
| Construction-in-progress | 2,104 | 1,987 |
| Total cost | 417,862 | 408,922 |
| Less: accumulated depreciation | ( 207,337 ) | ( 194,228 ) |
| Operating property, net | $ 210,525 | $ 214,694 |
Depreciation expense for operating property was $ 3.2 million and $ 9.9 million for the quarter and nine months ended September 30, 2025, as compared to $ 3.9 million and $ 11.9 million for the quarter and nine months ended September 30, 2024.
Construction-in-Progress – Operating Properties
Construction-in-Progress balances are included in our operating properties. The balances of our major projects along with the movements for the nine months ended September 30, 2025, are shown below:
| (Dollars in thousands) | Balance, December 31, 2024 | Additions during the period | Completed during the period | Transferred to Held for Sale | Foreign currency translation | Balance, September 30, 2025 |
|---|---|---|---|---|---|---|
| Cinema developments and improvements | 1,745 | 92 | ( 84 ) | — | 7 | 1,760 |
| Other real estate projects | 242 | 232 | ( 137 ) | — | 7 | 344 |
| Total | $ 1,987 | $ 324 | $ ( 221 ) | $ — | $ 14 | $ 2,104 |
Recent Real Estate Monetizations
In order to support our liquidity, we have monetized certain of our real estate holdings. During 2024 and the first nine months of 2025 we sold three held for sale properties. In the first quarter of 2024, we monetized our office building in Culver City for $ 10.0 million. In the first quarter of 2025, we monetized our properties in Wellington, New Zealand for $ 21.5 million. In the second quarter of 2025, we monetized our Cannon Park properties, for $ 20.7 million. In the second quarter of 2023, we classified our Newberry Yard, Williamsport, Pennsylvania, property as held for sale.
A ‘disposal group’ represents assets to be disposed of in a single transaction. A disposal group may represent a single asset, or, multiple assets. Discussed below are those real estate transactions affecting the presentation in our consolidated balance sheet as of September 30, 2025 and December 31, 2024, and the profitability determination in our consolidated statements of income for the quarter and nine months ended September 30, 2025, and 2024.
Cannon Park, Townsville, Queensland, Australia
In May 2024, we classified our Cannon Park ETC in Townsville, Queensland, Australia, as held for sale at the lower of cost and fair value less costs to sell. The disposal group consists of our Cannon Park City Center and Cannon Park Discount Center properties, comprising approximately 9.4 -acres. The sale of the property was completed on May 21, 2025, at a gross sale price of $ 20.7 million. The proceeds were used principally to pay off our NAB bridging facility, and to reduce our Bank of America debt. We retained a lease over the cinema.
The gain on sale of this property is calculated as follows:
| June 30 | |
|---|---|
| (Dollars in thousands) | 2025 |
| Sales price | $ 20,698 |
| Net book value | ( 18,361 ) |
| Gain on sale, gross of direct costs | 2,337 |
| Direct sale costs incurred | ( 518 ) |
| Gain on sale, net of direct costs | $ 1,819 |
14
Courtenay Central, Wellington, New Zealand
In June 2024, we classified our property assets in Wellington, New Zealand including Courtenay Central, as held for sale at the lower of cost and fair value less costs to sell. The disposal group consisted of our Courtenay Central cinema and retail property, along with our Tory and Wakefield Street car parks. Our book value (as opposed to fair value) of the property was $ 14.7 million. No adjustments to the book value of the assets were required upon classification as held for sale. The sale was completed on January 31, 2025, at a gross sale price of $ 21.5 million. The proceeds were used to pay off the Westpac mortgage on the property, and to reduce our Bank of America debt. We have an Agreement to Lease the cinema portion from the Purchaser, which is expected to commence upon the completion of seismic upgrade work by the Landlord and cinema fit-out work by ourselves.
The gain on sale of this property is calculated as follows:
| March 31 | |
|---|---|
| (Dollars in thousands) | 2025 |
| Sales price | $ 21,538 |
| Net book value | ( 14,666 ) |
| Gain on sale, gross of direct costs | 6,872 |
| Direct sale costs incurred | ( 306 ) |
| Gain on sale, net of direct costs | $ 6,566 |
Culver City, California
In May 2023, we classified our Culver City administrative building, commonly known as 5995 Sepulveda Blvd., as held for sale. Our book value (as opposed to fair value) of the property was $ 10.8 million, being the lower of cost and fair value less costs to sell. No adjustments to the book value of the assets contained within this disposal group were required. The disposal group consisted of land, a building and various leasehold improvements. The sale was completed on February 23, 2024, at a gross sales price of $ 10.0 million. The proceeds were used principally to pay off the $ 8.3 million first mortgage on the property.
The loss on sale of this property is calculated as follows:
| March 31 | |
|---|---|
| (Dollars in thousands) | 2024 |
| Sales price | $ 10,000 |
| Net book value | ( 10,800 ) |
| Loss on sale, gross of direct costs | ( 800 ) |
| Direct sale costs incurred | ( 325 ) |
| Loss on sale, net of direct costs | $ ( 1,125 ) |
Disposal Groups Held for Sale
Newberry Yard, Williamsport, Pennsylvania
In June 2023, we classified our industrial property at Newberry Yard, Williamsport, Pennsylvania, as held for sale at the lower of cost and fair value less costs to sell. The property is part of our historic railroad operations, consisting of land and an industrial building, and certain rail bed improvements. No adjustments to the book value of the assets contained within this disposal group were required. Sales efforts continue, and the property continues to meet the ASC 360 held for sale criteria.
Note 8 – Leases
In all leases, whether we are the lessor or lessee, we define lease term as the non-cancellable term of the lease plus any renewals covered by renewal options that are reasonably certain of exercise based on our assessment of economic factors relevant to the lessee. The non-cancellable term of the lease commences on the date the lessor makes the underlying property in the lease available to the lessee, irrespective of when lease payments begin under the contract.
As Lessee
We have operating leases for certain cinemas, and finance leases for certain equipment assets. Our leases have remaining lease terms of 1 to 25 years, with certain leases having options to extend up to a further 20 years. Lease payments for our cinema operating leases consist of fixed base rent, and for certain leases, variable lease payments consisting of contracted percentages of revenue, changes in the relevant CPI, and/or other contracted financial metrics.
15
The components of lease expense were as follows:
| Quarter Ended — September 30, | Nine Months Ended — September 30, | |||
|---|---|---|---|---|
| (Dollars in thousands) | 2025 | 2024 | 2025 | 2024 |
| Lease cost | ||||
| Finance lease cost: | ||||
| Amortization of right-of-use assets | $ 10 | $ 10 | $ 31 | $ 31 |
| Interest on lease liabilities | — | 1 | 2 | 4 |
| Operating lease cost | 7,206 | 7,585 | 21,301 | 23,723 |
| Variable lease cost | ( 14 ) | 734 | ( 14 ) | 2,394 |
| Total lease cost | $ 7,202 | $ 8,330 | $ 21,320 | $ 26,152 |
Supplemental cash flow information related to leases is as follows:
| Nine Months Ended | ||
|---|---|---|
| September 30, | ||
| (Dollars in thousands) | 2025 | 2024 |
| Cash flows relating to lease cost | ||
| Cash paid for amounts included in the measurement of lease liabilities: | ||
| Operating cash flows for finance leases | $ 33 | $ 33 |
| Operating cash flows for operating leases | 17,130 | 19,455 |
| Right-of-use assets obtained in exchange for new operating lease liabilities | 8,231 | 3,866 |
Supplemental balance sheet information related to leases is as follows:
| September 30, | December 31, | |
|---|---|---|
| (Dollars in thousands) | 2025 | 2024 |
| Operating leases | ||
| Operating lease right-of-use assets | $ 161,400 | $ 160,873 |
| Operating lease liabilities - current portion | 20,176 | 20,747 |
| Operating lease liabilities - non-current portion | 161,593 | 161,702 |
| Total operating lease liabilities | $ 181,769 | $ 182,449 |
| Finance leases | ||
| Property plant and equipment, gross | 224 | 217 |
| Accumulated depreciation | ( 214 ) | ( 175 ) |
| Property plant and equipment, net | $ 10 | $ 42 |
| Other current liabilities | 11 | 43 |
| Other long-term liabilities | — | — |
| Total finance lease liabilities | $ 11 | $ 43 |
| Other information | ||
| Weighted-average remaining lease term - finance leases | 0 | 1 |
| Weighted-average remaining lease term - operating leases | 11 | 11 |
| Weighted-average discount rate - finance leases | 7.07 % | 7.07 % |
| Weighted-average discount rate - operating leases | 4.92 % | 4.86 % |
The maturities of our leases were as follows:
| (Dollars in thousands) | Operating leases | Finance leases |
|---|---|---|
| 2025 | $ 7,341 | $ 11 |
| 2026 | 27,756 | — |
| 2027 | 25,920 | — |
| 2028 | 24,836 | — |
| 2029 | 23,407 | — |
| Thereafter | 126,347 | — |
| Total lease payments | $ 235,607 | $ 11 |
| Less imputed interest | ( 53,838 ) | ( 0 ) |
| Total | $ 181,769 | $ 11 |
16
As Lessor
We have entered into various leases as a lessor for our owned real estate properties. These leases vary in length between 1 and 12 years, with certain leases containing options to extend at the behest of the applicable tenants. Lease components consist of fixed base rent, and for certain leases, variable lease payments consisting of contracted percentages of revenue, changes in the relevant CPI, and/or other contracted financial metrics. None of our leases grant any right to the tenant to purchase the underlying asset.
Lease income relating to operating lease payments was as follows:
| Quarter Ended — September 30, | Nine Months Ended — September 30, | |||
|---|---|---|---|---|
| (Dollars in thousands) | 2025 | 2024 | 2025 | 2024 |
| Components of lease income | ||||
| Lease payments | $ 2,396 | $ 2,781 | $ 7,676 | $ 8,186 |
| Variable lease payments | 71 | 178 | 399 | 600 |
| Total lease income | $ 2,467 | $ 2,959 | $ 8,075 | $ 8,786 |
The book value of underlying assets under operating leases from owned assets was as follows:
| September 30, | December 31, | |
|---|---|---|
| (Dollars in thousands) | 2025 | 2024 |
| Building and improvements | ||
| Gross balance | $ 115,451 | $ 113,424 |
| Accumulated depreciation | ( 24,565 ) | ( 21,692 ) |
| Net Book Value | $ 90,886 | $ 91,732 |
The minimum contractual rent payments due on our leases were as follows:
| (Dollars in thousands) | Operating leases |
|---|---|
| 2025 | $ 2,500 |
| 2026 | 9,942 |
| 2027 | 9,527 |
| 2028 | 9,475 |
| 2029 | 8,926 |
| Thereafter | 32,683 |
| Total | $ 73,053 |
Note 9 – Goodwill and Intangible Assets
The table below summarizes goodwill by business segment as of September 30, 2025, and December 31, 2024.
| (Dollars in thousands) | Cinema | Real Estate | Total |
|---|---|---|---|
| Balance at December 31, 2024 | $ 18,488 | $ 5,224 | $ 23,712 |
| Foreign currency translation adjustment | 864 | — | 864 |
| Balance at September 30, 2025 | $ 19,352 | $ 5,224 | $ 24,576 |
Our Company is required to test goodwill and other intangible assets for impairment on an annual basis and, if current events or circumstances require them, on an interim basis. Our next annual evaluation of goodwill and other intangible assets is scheduled during the fourth quarter of 2025. To test the impairment of goodwill, our Company compares the fair value of each reporting unit to its carrying amount, including the goodwill, to determine if there is potential goodwill impairment. A reporting unit is generally one level below the operating segment. As of September 30, 2025, we were not aware that any events indicating potential impairment of goodwill had occurred outside of those described at Note 2 – Liquidity and Impairment Assessment .
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The tables below summarize intangible assets other than goodwill, as of September 30, 2025, and December 31, 2024, respectively.
| (Dollars in thousands) | As of September 30, 2025 — Beneficial Leases | Trade Name | Other Intangible Assets | Total |
|---|---|---|---|---|
| Gross carrying amount | $ 10,458 | $ 9,024 | $ 4,393 | $ 23,875 |
| Less: Accumulated amortization | ( 10,301 ) | ( 8,198 ) | ( 3,666 ) | ( 22,165 ) |
| Net intangible assets other than goodwill | $ 157 | $ 826 | $ 727 | $ 1,710 |
| (Dollars in thousands) | As of December 31, 2024 — Beneficial Leases | Trade Name | Other Intangible Assets | Total |
|---|---|---|---|---|
| Gross carrying amount | $ 10,458 | $ 9,024 | $ 4,349 | $ 23,831 |
| Less: Accumulated amortization | ( 10,290 ) | ( 8,102 ) | ( 3,639 ) | ( 22,031 ) |
| Less: Impairments | — | — | — | — |
| Net intangible assets other than goodwill | $ 168 | $ 922 | $ 710 | $ 1,800 |
Beneficial leases obtained in business combinations where we are the landlord are amortized over the life of the relevant leases. Trade names are amortized based on the accelerated amortization method over their estimated useful life of 30 years, and other intangible assets are amortized over their estimated useful lives of up to 30 years (except for transferrable liquor licenses, which are indefinite-lived assets). The table below summarizes the amortization expense of intangible assets for the quarter and nine months ended September 30, 2025
| Quarter Ended — September 30, | Nine Months Ended — September 30, | |||
|---|---|---|---|---|
| (Dollars in thousands) | 2025 | 2024 | 2025 | 2024 |
| Beneficial lease amortization | $ 3 | $ 21 | $ 10 | $ 64 |
| Other amortization | 26 | 60 | 95 | 143 |
| Total intangible assets amortization | $ 29 | $ 81 | $ 105 | $ 207 |
Note 10 – Investments in Unconsolidated Joint Ventures
Our investments in unconsolidated joint ventures are accounted for under the equity method of accounting.
The table below summarizes our active investment holdings in two (2) unconsolidated joint ventures as of September 30, 2025, and December 31, 2024:
| (Dollars in thousands) | Interest | September 30, — 2025 | December 31, — 2024 |
|---|---|---|---|
| Rialto Cinemas | 50.0 % | $ ( 4 ) | $ — |
| Mt. Gravatt | 33.3 % | 3,451 | 3,138 |
| Total investments | $ 3,447 | $ 3,138 |
For the quarter and nine months ended September 30, 2025 and 2024, the recognized share of equity earnings from our investments in unconsolidated joint ventures are as follows:
| Quarter Ended — September 30, | Nine Months Ended — September 30, | |||
|---|---|---|---|---|
| (Dollars in thousands) | 2025 | 2024 | 2025 | 2024 |
| Rialto Cinemas | $ ( 51 ) | $ ( 71 ) | $ ( 4 ) | $ ( 149 ) |
| Mt. Gravatt | 172 | 142 | 432 | 313 |
| Total equity earnings | $ 121 | $ 71 | $ 428 | $ 164 |
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Note 11 – Prepaid and Other Assets
Prepaid and other assets are summarized as follows:
| September 30, | December 31, | |
|---|---|---|
| (Dollars in thousands) | 2025 | 2024 |
| Prepaid and other current assets | ||
| Prepaid expenses | $ 1,149 | $ 1,473 |
| Prepaid taxes | 1,873 | 853 |
| Prepaid rent | — | 14 |
| Deposits | 333 | 314 |
| Investments in marketable securities | 13 | 14 |
| Total prepaid and other current assets | $ 3,368 | $ 2,668 |
| Other non-current assets | ||
| Other non-cinema and non-rental real estate assets | 674 | 674 |
| Investment in Reading International Trust I | 838 | 838 |
| Straight-line rent asset | 11,212 | 7,279 |
| Long-term deposits | 8 | 8 |
| Other | 397 | — |
| Total other non-current assets | $ 13,129 | $ 8,799 |
Note 12 – Income Taxes
An income tax expense of $ 1.1 million and $ 0.3 million were recognized during the nine months ended September 30, 2025 and 2024, respectively. The tax expense for each of the nine-month periods ended September 30, 2025 and 2024 is primarily resulted from year-to-date consolidated losses, offset with adjustments relating to valuation allowances on deferred tax assets in the U.S. and New Zealand.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. The OBBBA includes significant tax law changes, including the permanent extension of certain provisions from the Tax Cuts and Jobs Act, modifications to the international tax framework, and the reinstatement of favorable business tax provisions. These include 100% bonus depreciation, immediate expensing of Section 174 domestic research and experimental expenditures, and revised limitations under Section 163(j) on the deductibility of business interest expense. The legislation has multiple effective dates, with certain provisions effective beginning in 2025, and others implemented through 2027. The OBBBA does not have a material effect on the Company's consolidated financial statements for the year ending December 31, 2025.
Note 13 – Borrowings
Our Company’s borrowings at September 30, 2025 and December 31, 2024, net of deferred financing costs and including the impact of interest rate derivatives on effective interest rates, are summarized below:
| (Dollars in thousands) | As of September 30, 2025 — Maturity Date | Contractual Facility | Balance, Gross | Balance, Net (1) | Stated Interest Rate | Effective Interest Rate |
|---|---|---|---|---|---|---|
| Denominated in USD | ||||||
| Minetta & Orpheum Theatres Loan (US) | June 1, 2026 | $ 7,117 | $ 7,117 | $ 7,101 | 7.00 % | 7.00 % |
| Bank of America Credit Facility (US) | May 18, 2026 | 6,700 | 6,700 | 6,700 | 11.25 % | 11.25 % |
| Cinemas 1, 2, 3 Term Loan (US) ( 2 ) | October 1, 2025 | 20,442 | 20,442 | 20,442 | 9.32 % | 9.32 % |
| Union Square Financing (US) | November 6, 2026 | 49,000 | 46,641 | 46,047 | 11.35 % | 11.35 % |
| Trust Preferred Securities (US) | April 30, 2027 | 27,913 | 27,913 | 27,561 | 8.57 % | 8.57 % |
| Denominated in foreign currency ("FC") (3) | ||||||
| NAB Corporate Term Loan (AU) ( 4 ) | July 31, 2026 | 63,825 | 63,825 | 63,762 | 5.35 % | 5.35 % |
| $ 174,997 | $ 172,638 | $ 171,613 |
(1) Net of deferred financing costs amounting to $ 1.0 million.
(2) This facility was extended after September 30, 2025, and now matures on October 1, 2026. See below for discussion.
(3) The contractual facilities and outstanding balances of the foreign currency denominated borrowings were translated into U.S. dollars based on the applicable exchange rates as of September 30, 2025.
(4) This facility was extended after September 30, 2025, and now matures in July 2030. See below for discussion. As the loan modification was executed before the financial statements were available for issuance, we have adjusted the current/non-current aging of the facility in the September 2025 balance sheet accordingly.
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| (Dollars in thousands) | As of December 31, 2024 — Maturity Date | Contractual Facility | Balance, Gross | Balance, Net (1) | Stated Interest Rate | Effective Interest Rate |
|---|---|---|---|---|---|---|
| Denominated in USD | ||||||
| Minetta & Orpheum Theatres Loan (US) | June 1, 2025 | $ 7,464 | $ 7,464 | $ 7,446 | 7.00 % | 7.00 % |
| Bank of America Credit Facility (US) | August 18, 2025 | 14,750 | 14,750 | 14,699 | 10.50 % | 10.50 % |
| Cinemas 1, 2, 3 Term Loan (US) | April 1, 2025 | 20,682 | 20,682 | 20,594 | 9.57 % | 9.57 % |
| Union Square Financing (US) (4) | May 6, 2025 | 55,000 | 47,141 | 47,049 | 11.78 % | 11.78 % |
| Trust Preferred Securities ( US) | April 30, 2027 | 27,913 | 27,913 | 27,394 | 8.85 % | 8.85 % |
| Denominated in foreign currency ("FC") (2) | ||||||
| NAB Corporate Term Loan (AU) | July 31, 2026 | 61,850 | 61,850 | 61,740 | 6.12 % | 6.12 % |
| NAB Bridge Facility (AU) | April 30, 2025 | 12,370 | 12,370 | 12,361 | 6.16 % | 6.16 % |
| Westpac Bank Corporate (NZ) (3) | March 31, 2025 | 10,543 | 10,543 | 10,543 | 6.95 % | 6.95 % |
| Total | $ 210,572 | $ 202,713 | $ 201,826 |
(1) Net of deferred financing costs amounting to $ 0.9 million.
(2) The contractual facilities and outstanding balances of the foreign currency denominated borrowings were translated into U.S. dollars based on the applicable exchange rates as of December 31, 2024.
(3) This debt was repaid in full on January 31, 2025.
(4) This loan has an option to extend for one year , which is within our control and we intend to exercise.
Our loan arrangements are presented, net of the deferred financing costs, on the face of our consolidated balance sheet as follows:
| September 30, | December 31, | |
|---|---|---|
| Balance Sheet Caption (Dollars in thousands) | 2025 | 2024 |
| Debt - current portion | $ 16,451 | $ 69,193 |
| Debt - long-term portion | 127,601 | 105,239 |
| Subordinated debt - long-term portion | 27,561 | 27,394 |
| Total borrowings | $ 171,613 | $ 201,826 |
Minetta and Orpheum Theatres Loan
Our $ 7.1 million loan with Santander Bank is secured by our Minetta and Orpheum Theatres. It had previously matured on June 1, 2025, required monthly principal and interest payments with a balloon payment of $ 7.7 million on maturity, and carried an interest rate of 7.0 %. On July 18, 2025, we extended the maturity of this loan to June 1, 2026 , with various paydowns throughout the year, and a final repayment upon maturity.
Bank of America Credit Facility
On March 27, 2024, we amended our $ 6.7 million Bank of America facility to, among things, (i) extend the Maturity Date to August 18, 2025, (ii) require a $ 275,000 principal paydown, (iii) eliminate the minimum liquidity covenant, (iv) reduce the principal amortization amounts and provide a principal holiday period, and (v) require certain paydowns on the sale of certain real estate assets. Interest is charged at 2.5 % above the Bank of America Prime rate, which itself has a floor of 1.0 %. Payment-in-kind interest at a rate of 0.5 % commenced on January 1, 2024, and continued until December 31, 2024, increasing to 1.5 % on January 1, 2025, until the facility is repaid in full. This loan is subject to mandatory prepayment out of a portion of the net proceeds realized by us in the event that we determine to sell certain specified assets. In October 2024, we amended this facility to defer the monthly principal payments required in October, November and December, to the end of 2024. All deferred payments were made as contracted. Upon the sale of our Wellington Property assets including Courtenay Central, we repaid $ 6.1 million of this facility on February 5, 2025. Upon the sale of our Cannon Park property, we repaid $ 1.5 million of this facility.
On April 3, 2025, we further amended the facility to defer certain scheduled pay downs, which were subsequently paid upon the sale of our Cannon Park property. On July 3, 2025, we extended the maturity date to May 18, 2026 .
Cinemas 1,2,3 Term Loan
Our $ 20.4 million Cinemas 1,2,3 Term Loan is held by Sutton Hill Properties LLC (“SHP”), a 75 % owned subsidiary of RDI. On February 26, 2025, we exercised the last of our extension options on this loan, extending the maturity to October 1, 2025. The loan is with Valley National Bank, which carries an interest rate of 5.0 % above monthly SOFR , with a floor of 7.50 %. On November 13, 2025, we extended the maturity of this loan to October 1, 2026 . As a result of this extension, we carry the loan long term on our September 30, 2025, consolidated balance sheet.
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Union Square Financing
Our $ 49.0 million loan facility, executed in 2021 with Emerald Creek Capital, is secured by our 44 Union Square property and certain limited guarantees. It bears a variable interest rate of term SOFR plus 6.9 % and includes provisions for a prepaid interest and property tax reserve fund. On April 23, 2024, we executed the first twelve month extension on this loan, taking the maturity to May 6, 2025 .
On May 2, 2025, we extended the maturity date of this loan to November 6, 2026 , with one option to extend further to May 6, 2027. The extension provided for principal payments of $ 500,000 on or before May 21, 2025, and on or before and February 6, 2026. This modification and a subsequent repayment reduced the facility limit from $ 55.0 million to $ 49.0 million.
Debt denominated in foreign currencies
Australian NAB Corporate Term Loan (AU)
Prior to March 31, 2024, our Revolving Corporate Markets Loan Facility with National Australia Bank (“NAB”) matured on July 31, 2025. It consisted of (i) an AU$ 100.0 million Corporate Loan facility at 1.75 % above BBSY, of which AU $ 60.0 million was revolving and AU$ 40.0 million was core and (ii) a Bank Guarantee Facility of AU$ 5.0 million at a rate of 1.9 % per annum.
On April 4, 2024, we amended this facility, which then had a maturity on July 31, 2026 . As part of the amendment, we obtained an additional AU$ 20.0 million bridge facility (the “Bridge Loan”), which was repaid on May 21, 2025. We were also required, from March 31, 2025, to make quarterly repayments of AU$ 1.5 million against the AU$ 100.0 million Corporate Loan facility, until maturity date, representing permanent reductions in that facility’s ceiling. No other changes were made. On April 2, 2025, we executed an amendment that among other things, increased the bank guarantee facility from AU$ 3.0 million to AU$ 4.0 million.
Effective June 28, 2024, we entered into an Interest Rate Hedging Agreement with NAB on AU$ 50.0 million of the Corporate Loan Facility with a termination date of July 31, 2026. The Interest Rate Collar transaction has a floor of 4.18 % and a cap of 4.78 %.
On November 12, 2025, we extended the maturity of this loan to July 31, 2030 . As a result of this extension, we carry the loan long term on our September 30, 2025, consolidated balance sheet, less any required paydowns to be made in the coming twelve months.
Westpac Bank Corporate Credit Facility (NZ)
We repaid our Westpac Bank Corporate Credit Facility in full on January 31, 2025.
Note 14 – Other Liabilities
Other liabilities are summarized as follows:
| September 30, | December 31, | |
|---|---|---|
| (Dollars in thousands) | 2025 | 2024 |
| Current liabilities | ||
| Lease liability | $ 5,900 | $ 5,900 |
| Accrued pension | 496 | 500 |
| Security deposit payable | 146 | 117 |
| Finance lease liabilities | 11 | 43 |
| Other | 34 | 33 |
| Other current liabilities | $ 6,587 | $ 6,593 |
| Other liabilities | ||
| Lease make-good provision | 6,170 | 5,908 |
| Accrued pension | 1,908 | 2,312 |
| Deferred rent liability | 3,833 | 3,786 |
| Environmental reserve | 1,656 | 1,656 |
| Other non-current liabilities | $ 13,567 | $ 13,662 |
Pension Liability – Supplemental Executive Retirement Plan
Details of our Supplemental Executive Retirement Plan are disclosed in Note 14 – Pension and Other Liabilities in our 2024 Form 10-K.
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Included in our current and non-current liabilities are accrued pension costs of $ 2.4 million on September 30, 2025. The benefits of our pension plan are fully vested and therefore no service costs were recognized for the quarter and nine months ended September 30, 2025, and 2024. Our pension plan is unfunded.
During the quarter and nine months ended September 30, 2025, the interest cost was $ 33,000 and $ 106,000 , respectively, and the actuarial loss was $ 52,000 and $ 155,000 , respectively. During the quarter and nine months ended September 30, 2024, the interest cost was $ 40,000 and $ 126,000 , respectively, and the actuarial loss was $ 52,000 and $ 156,000 , respectively.
Note 15 – Accumulated Other Comprehensive Income
The following table summarizes the changes in each component of accumulated other comprehensive income attributable to RDI:
| (Dollars in thousands) | Foreign Currency Items | Unrealized Gain (Losses) on Available- for-Sale Investments | Accrued Pension Service Costs | Hedge Accounting Reserve | Total |
|---|---|---|---|---|---|
| Balance at January 1, 2025 | $ ( 5,521 ) | $ ( 18 ) | $ ( 1,497 ) | $ ( 137 ) | $ ( 7,173 ) |
| Change related to derivatives | |||||
| Total change in hedge fair value recorded in Other Comprehensive Income | — | — | — | 39 | 39 |
| Amounts reclassified from accumulated other comprehensive income | — | — | — | ( 33 ) | ( 33 ) |
| Net change related to derivatives | — | — | — | 6 | 6 |
| Net current-period other comprehensive income (loss) | 2,384 | ( 2 ) | 155 | 6 | 2,543 |
| Balance at September 30, 2025 | $ ( 3,137 ) | $ ( 20 ) | $ ( 1,342 ) | $ ( 131 ) | $ ( 4,630 ) |
Note 16 – Commitments and Contingencies
Litigation Matters
We are currently involved in certain legal proceedings, and we may from time to time, in the normal course of business, be a party to various ordinary course claims from vendors, landlords, tenants, employees and competitors and to other legal proceedings. If management believes that a loss arising from the action is probable and can reasonably be estimated, the Company records the amount of the loss or the minimum estimated liability when the loss is estimated using a range and no point in the range is more probable than another. Management believes that the ultimate outcome of the matters discussed below, individually and in the aggregate, will not likely have a material adverse effect on the Company’s financial position or overall trends in results of operations. However, litigation and claims are subject to inherent uncertainties and unfavorable outcomes can occur. An unfavorable outcome might include monetary damages. If an unfavorable outcome were to occur, there exists the possibility of a material adverse impact on the results of operation in the period in which the outcome occurs or in future periods. An unfavorable outcome could also have a material adverse effect on the Company’s financial position or the market prices of the Company’s securities.
Environmental and Asbestos Claims on Reading Legacy Operations
Certain of our subsidiaries were historically involved in railroad operations, coal mining, and manufacturing. Certain of these subsidiaries appear in the chain-of-title of properties that may suffer from environmental issues. Accordingly, certain of these subsidiaries have, from time to time, been named in and may in the future be named in various actions brought under applicable environmental laws. We are in the real estate development business and may encounter from time-to-time environmental conditions at properties that we have acquired for development and which will need to be addressed in the future as part of the development process. These environmental conditions can increase the cost of such projects and adversely affect the value and potential for profit of such projects. We do not currently believe that our exposure under applicable environmental laws is material in amount.
From time to time, there are claims brought against us relating to the exposure of former employees to asbestos and/or coal dust. These are generally covered by an insurance settlement reached in September 1990 with our insurance providers. However, this insurance settlement does not cover litigation by people who were not employees of our historic railroad operations and who may claim direct or second-hand exposure to asbestos, coal dust and/or other chemicals or elements now recognized as potentially causing cancer in humans. Our known exposure to these types of claims, asserted or probable of being asserted, is in our opinion not material.
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Certain Civil Litigation
Putative Class Action Litigation
The Company is a defendant in two actions asserting putative class action claims under the Video Privacy Protection Act (the “VPPA”): Daniel Valentini and Dallace Butler v. Reading International, Inc (2:24-cv-00255-RFB-MDC (D. Nev.)) (“The Valentini Case”), and Berryman v. Reading International, Inc. (1:24-cv-00750-PAE (S.D.N.Y.)) (“The Berryman Case”). The plaintiffs in these cases allege that the Company is a video tape service provider and knowingly disclosed plaintiff’s movie purchase and video-viewing habits to third parties in violation of the VPPA. Valentini and Butler also allege violation of a parallel state statute (California Code section 1799.3 (the “California Statute”)). Berryman also asserts claims under a similar statute (New York General Business Law Section 671 et seq (the “NY Statute”) and under the NY Arts and Cultural Affairs Law Section 25.07(4) (the “NY AC Statute”) which regulates the disclosure requirements applicable to ticketing service charges and provides a right to recover “actual damages or fifty dollars, whichever is greater.”
Only limited case law exists as to claims regarding the VPPA, a federal statute enacted in 1988. Insofar as we have been able to determine, no case in the U.S. has resulted in an adverse VPPA judgment against a motion picture exhibition company on facts substantially similar to our own. Further, except as discussed below, the precedent that does exist suggests that theatres with websites selling tickets to showings at physical locations are not video tape service providers under the statute, even if they operate websites to sell tickets.
The Company has filed motions to dismiss the Valentini and the Berryman claims under Federal rule of Procedure 12(b)(6) for failure to state a claim for which relief can be provided. The Valentini motion is on hold, pending the outcome of an appeal to the Ninth Circuit of a trial court decision which the Company believes, if affirmed, will likely result in the dismissal of the Valentini case. The District Court in Berryman denied the Company’s motion, but only on the basis that all of the allegations in the Berryman complaint were assumed to be true including allegations as to knowledge. The determination by the Berryman Court at the pleadings stage that a motion picture exhibitor can be a video tape service provider is inconsistent with decisions by U.S. District Courts for the Central District and Northern District of California, Kansas, Minnesota, and North Carolina. In light of recent case law developments related to what constitutes “personally identifiable information,” the Company has filed a new motion to dismiss Berryman’s VPPA and NY Statute Claims.
The Company believes that it has valid defenses to these VPPA claims, and that there are also material issues to class certification. As the Company does not believe that liability is probable, or that any class will be certified, no reserve has been established. Damages cannot reasonably be estimated with respect to the VPPA claim.
Berryman also asserts claims under the NY AC Statute alleging deficiencies in the disclosure provided by our Company with respect to service charges to residents of New York who purchased tickets online to our New York cinemas. We believe that our disclosure at all times satisfied the requirements of the NY AC Statute. The Company believes that it has valid defenses to this claim. As the Company does not believe that liability is probable, no reserve has been established.
Wellington Construction Damage Litigation
A subsidiary of the Company is the defendant in litigation in Wellington, New Zealand titled (Body Corporate 78693 v Courtenay Car Park Limited & Ors CIV-2021-485-612 & CIV-2023-485-67) which involves various claims related to the dropping of a concrete beam onto adjacent property by a construction subcontractor working for the general contractor engaged to do demolition work on our subsidiary’s property. Trial was completed on July 25, 2025, and the court has reserved its decision on the outcome of the matter.
We believe that there is a reasonable possibility that the Company could be held liable under a contractual indemnity theory, for the defense costs incurred by our general contractor and its sub-contractor in the litigation. The Company has estimated such exposure to be in the range of $ 0 to $ 1 million. As the liability is not probable, no reserve has been accrued.
Philadelphia Code Violation Litigation
Subsequent to the end of the 2nd quarter of 2025, the Company was served with a petition styled City of Philadelphia-Plaintiff vs. Reading International, Inc. Control Number 25074006 filed in the Court of Common Pleas under the City’s Code Enforcement Case Program, which among other things, (i) alleges violations of certain sections of the Philadelphia Code on property allegedly owned or under the control of Reading International in Philadelphia; (ii) seeks an order imposing statutory fines and reinspection fees and allowing the Department of Licenses and Inspections to enter the premises identified as 1120 Callowhill Street, Philadelphia Pennsylvania (the “Premises”) to conduct an interior inspection; and (iii) seeks an order compelling the Defendants to correct all alleged violations. The Company is currently reviewing the claims in the Petition, and has not yet formed a view as to the scope and extent of the Company’s exposure, if any.
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Note 17 – Non-controlling Interests
These are composed of the following enterprises:
Australia Country Cinemas Pty Ltd. - 25 % noncontrolling interest owned by Panorama Group International Pty Ltd;
Shadow View Land and Farming, LLC - 50 % noncontrolling membership interest owned by the estate of Mr. James J. Cotter, Sr. (the “Cotter Estate”). This limited liability company has no assets, known liabilities or ongoing business activities; and,
Sutton Hill Properties, LLC - 25 % noncontrolling interest owned by Sutton Hill Capital, LLC (which in turn is indirectly 50 % owned by the Cotter Estate). On September 30, 2025, we entered into an agreement to purchase the remaining interest in Sutton Hill Properties, LLC so that RDI will own 100 % of this subsidiary, subject to satisfaction of certain terms prior to closing which is expected in Q4 2025.
The components of noncontrolling interests are as follows:
| September 30, | December 31, | |
|---|---|---|
| (Dollars in thousands) | 2025 | 2024 |
| Australian Country Cinemas, Pty Ltd | $ 126 | $ 128 |
| Shadow View Land and Farming, LLC | ( 2 ) | ( 2 ) |
| Sutton Hill Properties, LLC | ( 1,074 ) | ( 552 ) |
| Noncontrolling interests in consolidated subsidiaries | $ ( 950 ) | $ ( 426 ) |
The components of income attributable to noncontrolling interests are as follows:
| Quarter Ended — September 30, | Nine Months Ended — September 30, | |||
|---|---|---|---|---|
| (Dollars in thousands) | 2025 | 2024 | 2025 | 2024 |
| Australian Country Cinemas, Pty Ltd | $ 15 | $ 39 | $ 45 | $ 30 |
| Shadow View Land and Farming, LLC | — | — | — | — |
| Sutton Hill Properties, LLC | ( 163 ) | ( 150 ) | ( 522 ) | ( 511 ) |
| Net income (loss) attributable to noncontrolling interests | $ ( 148 ) | $ ( 111 ) | $ ( 477 ) | $ ( 481 ) |
Summary of Controlling and Noncontrolling Stockholders’ Equity
A summary of the changes in controlling and noncontrolling stockholders’ equity is as follows:
| Common Stock — Class A | Class A | Class B | Class B | Additional | Retained — Earnings | Accumulated — Other | Reading — International Inc. | Total | |||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Non-Voting | Par | Voting | Par | Paid-In | (Accumulated | Treasury | Comprehensive | Stockholders’ | Noncontrolling | Stockholders’ | |
| (Dollars in thousands, except shares) | Shares | Value | Shares | Value | Capital | Deficit) | Shares | Income (Loss) | Equity | Interests | Equity |
| At January 1, 2025 | 20,743 | $ 238 | 1,681 | $ 17 | $ 157,751 | $ ( 114,790 ) | $ ( 40,407 ) | $ ( 7,173 ) | $ ( 4,364 ) | $ ( 426 ) | $ ( 4,790 ) |
| Net income (loss) | — | — | — | — | — | ( 4,756 ) | — | — | ( 4,756 ) | ( 191 ) | ( 4,947 ) |
| Other comprehensive income, net | — | — | — | — | — | — | — | 452 | 452 | 1 | 453 |
| Share-based compensation expense | — | — | — | — | 600 | — | — | — | 600 | -- | 600 |
| At March 31, 2025 | 20,743 | $ 238 | 1,681 | $ 17 | $ 158,351 | $ ( 119,546 ) | $ ( 40,407 ) | $ ( 6,721 ) | $ ( 8,068 ) | $ ( 616 ) | $ ( 8,684 ) |
| Net income | — | — | — | — | ( 2,667 ) | — | — | ( 2,667 ) | ( 137 ) | ( 2,804 ) | |
| Other comprehensive income, net | — | — | — | — | — | — | 2,704 | 2,704 | 8 | 2,712 | |
| Share-based compensation expense | — | — | — | 530 | — | — | — | 530 | -- | 530 | |
| Restricted Stock Units | 291 | 3 | — | ( 185 ) | — | — | — | ( 182 ) | -- | ( 182 ) | |
| At June 30, 2025 | 21,034 | $ 241 | 1,681 | $ 17 | 158,696 | ( 122,213 ) | ( 40,407 ) | ( 4,017 ) | ( 7,683 ) | ( 745 ) | ( 8,428 ) |
| Net income | — | — | — | — | — | ( 4,157 ) | — | — | ( 4,157 ) | ( 148 ) | ( 4,305 ) |
| Other comprehensive income, net | — | — | — | — | — | — | — | ( 613 ) | ( 613 ) | — | ( 613 ) |
| Share-based compensation expense | — | — | — | — | 391 | — | — | — | 391 | — | 391 |
| Distributions to noncontrolling stockholders | — | — | — | — | 0 | — | — | — | -- | ( 57 ) | ( 57 ) |
| At September 30, 2025 | 21,034 | 241 | 1,681 | 17 | 159,087 | ( 126,370 ) | ( 40,407 ) | ( 4,630 ) | ( 12,062 ) | ( 950 ) | ( 13,012 ) |
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| Common Stock — Class A | Class A | Class B | Class B | Additional | Retained — Earnings | Accumulated — Other | Reading — International Inc. | Total | |||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Non-Voting | Par | Voting | Par | Paid-In | (Accumulated | Treasury | Comprehensive | Stockholders’ | Noncontrolling | Stockholders’ | |
| (Dollars in thousands, except shares) | Shares | Value | Shares | Value | Capital | Deficit) | Shares | Income (Loss) | Equity | Interests | Equity |
| At January 1, 2024 | 20,664 | $ 237 | 1,681 | $ 17 | $ 155,402 | $ ( 79,489 ) | $ ( 40,407 ) | $ ( 2,673 ) | $ 33,087 | $ ( 91 ) | $ 32,996 |
| Net income (loss) | — | — | — | — | — | ( 13,228 ) | — | — | ( 13,228 ) | ( 175 ) | ( 13,403 ) |
| Other comprehensive income, net | — | — | — | — | — | — | — | ( 2,538 ) | ( 2,538 ) | ( 3 ) | ( 2,541 ) |
| Share-based compensation expense | — | — | — | — | 678 | — | — | — | 678 | — | 678 |
| Restricted Stock Units | 9 | — | — | — | ( 2 ) | — | — | — | ( 2 ) | — | ( 2 ) |
| At March 31, 2024 | 20,673 | $ 237 | 1,681 | $ 17 | $ 156,078 | $ ( 92,717 ) | $ ( 40,407 ) | $ ( 5,211 ) | $ 17,997 | $ ( 269 ) | $ 17,728 |
| Net income | — | — | — | — | — | ( 12,806 ) | — | — | ( 12,806 ) | ( 195 ) | ( 13,001 ) |
| Other comprehensive income, net | — | — | — | — | — | — | — | 886 | 886 | 1 | 887 |
| Share-based compensation expense | — | — | — | — | 456 | — | — | — | 456 | — | 456 |
| Restricted Stock Units | 70 | 1 | — | — | ( 5 ) | — | — | — | ( 4 ) | — | ( 4 ) |
| At June 30, 2024 | 20,743 | $ 238 | 1,681 | $ 17 | $ 156,529 | $ ( 105,523 ) | $ ( 40,407 ) | $ ( 4,325 ) | $ 6,529 | $ ( 463 ) | $ 6,066 |
| Net income | — | — | — | — | — | ( 7,028 ) | — | — | ( 7,028 ) | ( 111 ) | ( 7,139 ) |
| Other comprehensive income, net | — | — | — | — | — | — | — | 1,494 | 1,494 | 5 | 1,499 |
| Share-based compensation expense | — | — | — | — | 603 | — | — | — | 603 | -- | 603 |
| Restricted Stock Units | — | — | — | — | — | — | — | — | -- | -- | -- |
| At September 30, 2024 | 20,743 | $ 238 | 1,681 | $ 17 | $ 157,132 | $ ( 112,551 ) | $ ( 40,407 ) | $ ( 2,831 ) | $ 1,598 | $ ( 569 ) | $ 1,029 |
Note 18 – Stock-Based Compensation and Stock Repurchases
Employee and Director Stock Incentive Plan
2020 Stock Incentive Plan
On November 4, 2020, our Company enacted the 2020 Stock Incentive Plan, which was also approved by our Company’s stockholders on December 8, 2020 (as amended, the “2020 Plan”). Under the 2020 Plan, the number of permitted authorized shares for issuance was originally set at 1,250,000 , plus any shares reserved for awards outstanding under the 2010 Plan that were subsequently forfeited (for instance, through a then outstanding out of the money option) or if the related shares are repurchased, a corresponding number of shares would automatically become available for issuance under the 2020 Plan. On December 7, 2023, our Company’s stockholders, upon recommendation of our Company’s board of directors, approved the First Amendment to the 2020 Stock Incentive Plan, increasing the number of shares of Class A Common Stock reserved for issuance under the 2020 Plan by an additional 971,807 shares. On December 5, 2024, the Company’s stockholders, upon recommendation of the Company’s board of directors, approved the Second Amendment to the 2020 Stock Incentive Plan, increasing the number of Class A Common Stock reserved for issuance under the 2020 Plan by an additional 3,500,000 shares.
Under the 2020 Plan, the Company may grant stock options and other share-based payment awards of our Class A Common Stock to eligible employees, directors and consultants. At September 30, 2025, there were 1,179,656 shares of Class A Common Stock available for issuance under the 2020 Plan.
Stock options are granted at exercise prices equal to the grant-date market prices and typically expire on either the fifth or tenth anniversary of the grant date, although the Company’s Compensation and Stock Options Committee (the “Compensation Committee”) may set different vesting times. In contrast to a stock option where the grantee buys our Company’s share at an exercise price determined on the grant date, a restricted stock unit (“RSU”) entitles the grantee to receive one share for every RSU based on a vesting plan, typically between one year and four years from grant. As discussed further below, a performance component has been added to certain of the RSUs or options granted to management. At the time the options are exercised or RSUs vest and are settled, at the discretion of management, we may issue treasury shares or make a new issuance of shares to the option or RSU holder.
Stock Options
We have estimated the grant-date fair value of our stock options using the Black-Scholes option-valuation model, which takes into account assumptions such as the dividend yield, the risk-free interest rate, the expected stock price volatility, and the expected life of the options. We expensed the estimated grant-date fair values of options over the vesting period on a straight-line basis. Based on our historical experience, the “deemed exercise” of expiring in-the-money options and the relative market price to strike price of the options, we have not estimated any forfeitures of vested or unvested options.
For the quarter and nine months ended September 30, 2025, we recorded a compensation expense of $ 197,000 and $ 762,000 , respectively, relating to our prior stock option grants. For the quarter and nine months ended September 30, 2024, we recorded a compensation expense of $ 302,000 , and $ 466,000 , respectively, relating to our prior stock option grants. At September 30, 2025, the total unrecognized estimated compensation expense related to non-vested stock options was $ 1.0 million, which we expect to recognize over a weighted average vesting period of 1.20 years. The intrinsic, unrealized value of all options outstanding vested and expected to vest, at September 30, 2025, was nil , as the closing price of our Class A Common Stock on that date was $ 1.47 .
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The following table summarizes the number of options outstanding and exercisable as of September 30, 2025, and December 31, 2024:
| Outstanding Stock Options - Class A Shares — Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Years of Contractual Life | Aggregate Intrinsic Value | |
|---|---|---|---|---|
| Class A | Class A | Class A | Class A | |
| Balance - December 31, 2023 | 412,779 | $ 14.19 | 1.79 | $ — |
| Granted | 1,499,755 | 1.49 | — | — |
| Exercised | — | — | — | — |
| Forfeited | ( 205,122 ) | — | — | — |
| Balance - December 31, 2024 | 1,707,412 | $ 1.63 | 9.44 | $ — |
| Granted | 2,087,885 | 1.42 | — | — |
| Exercised | — | — | — | — |
| Forfeited | — | — | — | — |
| Balance - September 30, 2025 | 3,795,297 | $ 1.50 | 6.50 | $ — |
Restricted Stock Units
The following table summarizes the status of RSUs granted to date as of September 30, 2025:
| Restricted Stock Units — RSU Grants (in units) | Vested, | Unvested, | Forfeited, | |||
|---|---|---|---|---|---|---|
| Grant Date | Directors | Management | Total Grants | September 30, 2025 | September 30, 2025 | September 30, 2025 |
| Opening balance | 339,438 | 1,222,252 | 1,561,690 | 1,378,947 | 74,435 | 108,308 |
| April 11, 2023 | — | 413,536 | 413,536 | 208,289 | 201,689 | 3,558 |
| April 21, 2023 | — | 237,719 | 237,719 | 106,295 | 128,066 | 3,358 |
| April 28, 2023 | — | 20,427 | 20,427 | 10,218 | 8,661 | 1,548 |
| Total | 339,438 | 1,893,934 | 2,233,372 | 1,703,749 | 412,851 | 116,772 |
Time vested RSU awards to management typically vest 25 % on the anniversary of the grant date and the remainder over a period of four years . Beginning in 2020, a performance component has been added to certain management equity grants, which vest on the third anniversary of their grant date based on the achievement of certain performance metrics. From 2021 onwards, RSUs have two vesting structures, which include time vesting and performance vesting. The majority of RSUs vest 75 % evenly over a period of four years , with the remaining 25 % contingent upon the achievement of certain performance metrics, vesting in full on the third anniversary of the date of the grant. In the case of our Chief Executive Officer, RSUs vest 50 % evenly over a period of four years with the remaining 50 %, contingent upon the achievement of certain performance metrics, vesting in full on the third anniversary of the grant date. In 2024 and in the second quarter of 2025, our Compensation Committee, upon the recommendation of our Chief Executive Officer and Board Chair, determined that due to liquidity management concerns, our Company would not pay cash bonuses for which our executive officers and other senior management may have been potentially eligible, and to issue stock options in lieu of such bonuses. Also in 2024 and 2025, our Compensation Committee determined not to issue long term incentive stock options or RSUs.
For the quarter and nine months ended September 30, 2025, we recorded compensation expense of $ 194,000 and $ 759,000 , respectively. For the quarter and nine months ended September 30, 2024, we recorded compensation expense of $ 302,000 , and $ 1.3 million, respectively. The total unrecognized compensation expense related to the non-vested RSUs was $ 1.3 million as of September 30, 2025, which we expect to recognize over a weighted average vesting period of 0.62 years.
Stock Repurchase Program
Our Stock Repurchase Program expired on March 10, 2024, and has not been renewed.
Note 19 – Hedge Accounting
As of September 30, 2025, our Company held derivative instruments to the notional value of $ 33.1 million (AU$ 50.0 million). As of December 31, 2024, our Company held derivatives in the total notional amount of $ 33.0 million (AU$ 50.0 million).
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The derivatives are recorded on the balance sheet at fair value and are included in the following line items:
| Liability Derivatives — September 30, | December 31, | |||
|---|---|---|---|---|
| 2025 | 2024 | |||
| (Dollars in thousands) | Balance sheet location | Fair value | Balance sheet location | Fair value |
| Interest rate contracts | Derivative financial instruments - current portion | $ 131 | Derivative financial instruments - current portion | $ — |
| Derivative financial instruments - non-current portion | — | Derivative financial instruments - non-current portion | 137 | |
| Total derivatives designated as hedging instruments | $ 131 | $ 137 | ||
| Total derivatives | $ 131 | $ 137 |
The changes in fair value of that instrument were recorded in Other Comprehensive Income and released into interest expense in the same period(s) in which the hedged transactions affect earnings. In the quarter and nine months ended September 30, 2025 and September 30, 2024, respectively, the derivative instruments affected Comprehensive Income as follows:
| (Dollars in thousands) | Location of Loss Recognized in Income on Derivatives | Amount of Loss (Gain) Recognized in Income on Derivatives | |||
|---|---|---|---|---|---|
| Quarter Ended September 30 | Nine Months Ended September 30 | ||||
| 2025 | 2024 | 2025 | 2024 | ||
| Interest rate contracts | Interest expense | $ ( 28 ) | $ — | $ ( 39 ) | $ — |
| Total | $ ( 28 ) | $ — | $ ( 39 ) | $ — |
| (Dollars in thousands) | Loss (Gain) Recognized in OCI on Derivatives (Effective Portion) — Amount | Amount | ||
|---|---|---|---|---|
| Quarter Ended September 30 | Nine Months Ended September 30 | |||
| 2025 | 2024 | 2025 | 2024 | |
| Interest rate contracts | $ ( 77 ) | $ 167 | $ 24 | $ 269 |
| Total | $ ( 77 ) | $ 167 | $ 24 | $ 269 |
| Loss (Gain) Reclassified from OCI into Income (Effective Portion) | ||||
| Line Item | Amount | Amount | ||
| Quarter Ended September 30 | Nine Months Ended September 30 | |||
| 2025 | 2024 | 2025 | 2024 | |
| Interest expense | $ ( 28 ) | $ — | $ ( 39 ) | $ — |
| Total | $ ( 28 ) | $ — | $ ( 39 ) | $ — |
As of September 30, 2025, we expect to release $ 195,000 to earnings over the remaining life of the derivative.
Note 20 – Fair Value Measurements
ASC 820, Fair Value Measurement establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The statement requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:
Level 1: Quoted market prices in active markets for identical assets or liabilities;
Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and,
Level 3: Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
The following tables summarize our financial liabilities that are carried at cost and measured at fair value on a non-recurring basis as of September 30, 2025, and December 31, 2024, by level within the fair value hierarchy.
| (Dollars in thousands) | Carrying Value (1) | Fair Value Measurement at September 30, 2025 — Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|---|
| Notes payable | $ 144,725 | $ — | $ — | $ 144,677 | $ 144,677 |
| Subordinated debt | 27,913 | — | — | 27,880 | 27,880 |
| $ 172,638 | $ — | $ — | $ 172,557 | $ 172,557 |
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| (Dollars in thousands) | Carrying Value (1) | Fair Value Measurement at December 31, 2024 — Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|---|
| Notes payable | $ 174,800 | $ — | $ — | $ 174,994 | $ 174,994 |
| Subordinated debt | 27,913 | — | — | 27,867 | 27,867 |
| $ 202,713 | $ — | $ — | $ 202,861 | $ 202,861 |
(1) These balances are presented before any deduction for deferred financing costs.
The following is a description of the valuation methodologies used to estimate the fair value of our financial assets and liabilities. There have been no changes in the methodologies used as of September 30, 2025, and December 31, 2024.
Level 1 investments in marketable securities primarily consist of investments associated with the ownership of marketable securities in U.S. and New Zealand. These investments are valued based on observable market quotes on the last trading date of the reporting period.
Level 2 derivative financial instruments are valued based on discounted cash flow models that incorporate observable inputs such as interest rates and yield curves from the derivative counterparties. The credit valuation adjustments associated with our non-performance risk and counterparty credit risk are incorporated in the fair value estimates of our derivatives. As of September 30, 2025, and December 31, 2024, we concluded that the credit valuation adjustments were not significant to the overall valuation of our derivatives.
Level 3 borrowings include our secured and unsecured notes payable, trust preferred securities and other debt instruments. The borrowings are valued based on discounted cash flow models that incorporate appropriate market discount rates. We calculated the market discount rate by obtaining period-end treasury rates for fixed-rate debt, or SOFR for variable-rate debt, for maturities that correspond to the maturities of our debt, adding appropriate credit spreads derived from information obtained from third-party financial institutions. These credit spreads take into account factors such as our credit rate, debt maturity, types of borrowings, and the loan-to-value ratios of the debt.
Our Company’s financial instruments also include cash, cash equivalents, receivables and accounts payable. The carrying values of these financial instruments approximate the fair values due to their short maturities. Additionally, there were no transfers of assets and liabilities between levels 1, 2, or 3 during the quarter and nine months ended September 30, 2025, and September 30, 2024.
Note 21 – Subsequent Events
Borrowings
On November 12, 2025, we extended the maturity date of our NAB facility to July 31, 2030 .
On November 13, 2025, we extended the maturity date of our Valley National facility to October 1, 2026 .
Asset monetizations
On October 21, 2025, we entered into an agreement for the sale and purchase for our cinema and retail property located in Napier, New Zealand. The purchase price is NZ$ 2.5 million. The agreement is subject to a due diligence period which expires on November 20, 2025. No assurances can be given that the transaction will be consummated.
This MD&A should be read in conjunction with the accompanying unaudited consolidated financial statements included in Part I, Item 1 (Financial Statements). The foregoing discussions and analyses contain certain forward-looking statements. Please refer to the “Cautionary Statement Regarding Forward-Looking Statements” included at the conclusion of this section and our “Risk Factors” set forth in our 2024 Form 10-K, Part 1 – Financial Information, Item 1A and the Risk Factors set out below.
Item 2 – Management’s Discussion and Analysis (“MD&A”) of Financial Condition and Results of Operations
The MD&A should be read in conjunction with our consolidated financial statements and related notes in this Report.
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Business Overview & Updates
Cinema Exhibit Segment
As we anticipated, our third quarter of 2025 cinema results decreased compared to third quarter 2024 due to a weaker film slate. The third quarter 2024 movie slate, which included record setting movies such as Deadpool & Wolverine , Beetlejuice Beetlejuice, Despicable Me 4, Twisters, and It Ends with Us, outperformed the third quarter 2025 movie slate. In the U.S., our box office was further negatively impacted by the second quarter 2025 closure of an underperforming theater in San Diego, California. Broader industry challenges, including persistent inflation, rising labor and other operating costs, and lingering impacts from the 2023 Hollywood strikes, continued to influence results and contributed to an overall softer quarter.
Despite these obstacles, when movies deliver box office results that both exceed industry expectations and set records, such as Demon Slayer: Kimetsu No Yaiba Infinity Casti , Superman and Weapons, our confidence in the future of the theatrical business is reinforced. This occurred again when KPop Demon Hunters, originally released by Netflix, delivered an $18 million domestic box office in an unexpected limited, two-day only theatrical release.
As mentioned above, and further discussed in the below, certain current macroeconomic conditions continued to present challenges for our cinema operations during the relevant periods:
Cinema attendance levels have not returned to pre-pandemic levels;
The number of movies released by the major Hollywood studios and other distributors, while increasing from pandemic levels, have not yet returned to their higher pre-pandemic levels, as releases continue to be impacted by both the shutdown due to Covid and the 2023 Hollywood Strikes;
The traditional exclusive theatrical release window continues to face pressure from cable and streaming platforms, as illustrated this quarter by Netflix’s limited release of KPop Demon Hunters for only two days;
Inflationary pressures, ongoing supply chain issues and increased operating expenses arising post-pandemic continue to push up our variable costs while we encounter consumer resistance to higher ticket prices;
Labor costs continue to rise due to mandated minimum wage increases;
Increased fixed costs for third party cinema rents, some of which are increasing due to base rent escalations, some of which are fixed and some of which are adjusted by reference to changes in the cost of living index, which are exacerbated by our obligation to also pay certain COVID-19 related rent deferrals. We have been able to mitigate this somewhat by negotiating for rent abatements and revised rental terms and through the closure of certain underperforming venues;
Declines in exchange rates for the Australian and New Zealand currencies when compared to the U.S. Dollar for the third quarter and first nine months of 2025 ; and
General market and economic conditions.
We believe that our ongoing focus on operational efficiency and strategic initiatives has improved our operations results. Over the past quarter, we have worked to optimize the efficiency of our locations, by
Renegotiating our cinema leases and aligning our occupancy costs more effectively with attendance levels that, in general, remain behind pre-pandemic levels.
Prioritizing the elevation of the guest experience through our expanded Food and Beverage program. Beer and wine, and liquor service is available at nearly every one of our U.S. cinema locations. These enhancements are mirrored in our Australian and New Zealand markets, ensuring a consistent and premium experience for audiences across all regions. This strong focus on Food and Beverage resulted in revenue increases in all countries for the quarter and nine months compared to their respective prior year periods.
Exploiting our free to join and paid cinema membership programs in Australia and New Zealand and our free to join reward programs in the U.S. And, through the quarter we continued to develop our new free to join and paid membership programs in the U.S., which are expected to be launched in the fourth quarter 2025.
These initiatives not only provide increased revenues and reduced expenses but also highlight our dedication to delivering exceptional and memorable cinema experiences that we believe consistently draw audiences back to our theaters. Importantly, the lingering impacts of COVID-19 have become far less of a factor, allowing audiences to return to theaters more confidently and enabling our operations to function closer to pre-pandemic levels.
On a year-to-date basis, earlier releases in 2025 such as A Minecraft Movie , Sinners , Lilo & Stitch , How to Train Your Dragon , Thunderbolts* , and Mission: Impossible - The Final Reckoning all contributed significantly to our performance this year during the first two quarters. These films drove strong audience engagement, resulting in robust box office results for our worldwide cinemas. While attendance for the first nine months of 2025 was down compared to the first nine months of 2024, in our Australian and New Zealand
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circuits our box office revenues have seen improvement, on a functional currency basis, as the result of our increased average ticket prices in each of those countries.
Looking ahead, we believe that the fourth quarter film slate presents a major opportunity to regain positive momentum and deliver stronger results. Major releases including The Running Man , Wicked: For Good , Zootopia 2 , Five Nights at Freddy’s 2 , The SpongeBob Movie: Search for SquarePants , The Housemaid , Marty Supreme , and Avatar: Fire and Ash are positioned to appeal to a wide variety of audiences, which should allow for a strong carry over into the beginning of 2026. These titles cover a wide range of genres, from musicals and family animation to horror and epic science fiction, each with the potential to drive significant box office results. When combined with our strategic operational initiatives and ongoing audience engagement efforts, this diverse slate gives us confidence that the fourth quarter will deliver a powerful, more impactful finish to the year.
Real Estate Segment
With respect to our real estate segment, our Australian real estate revenues continue to have steady, strong performance, especially when measured in local currency. However, the Australian real estate operations for the three-month period ended September 30, 2025 have been adversely impacted by the generally downward trend in exchange rates and the third quarter 2025 monetization of our Cannon Park entertainment center in Townsville, Australia.
In the United States, we sold our underutilized administrative office building in Culver City, California, for $10.0 million during the first quarter of 2024. At our 44 Union Square property in New York, Petco continues to occupy the cellar, ground, and second floors under a long term lease on a full rent-paying basis, while we work to secure tenant(s) for the remaining space. We believe that demand for space in the Union Square submarket is improving .
Regarding our Australia and New Zealand properties, we completed two major monetizations during the first half of 2025. On January 31, 2025, we sold all our Wellington, New Zealand properties for $21.5 million (NZ$38.0 million) and signed a lease agreement to continue operating the Courtenay Central cinema following seismic upgrades. On May 21, 2025, we sold our Cannon Park properties in Townsville, Queensland, for $20.7 million (AU$32.0 million), while retaining the cinema leasehold at the property. The proceeds of these sales were used, among other things, to pay down approximately $32.1 million in debt.
To align with our liquidity priorities, we have largely deferred new real estate development. Capital spending in 2024 and to date in 2025 has been primarily focused on upgrades to our existing cinemas. Additionally, we continue to hold our Newberry Yard property in Williamsport, Pennsylvania for sale and we continue to explore other opportunities to strengthen liquidity, for example, we recently entered into an agreement to sell our property in Napier, New Zealand.
Company Overview
We are an internationally diversified company principally focused on the development, ownership, and operation of entertainment and real estate assets in the United States, Australia, and New Zealand. Currently, we operate in two business segments:
Cinema exhibition, through our 58 cinemas.
Real estate, including real estate development and the rental of retail, commercial, and Live Theatre assets.
Over the past five years we have monetized nine property assets, but we believe that our cinema and real estate segments continue to complement and support one another and will be a part of the long run growth plan for our company. Before COVID-19, cash flows from our cinema operations helped fund the front-end cash demands of our real estate development business. During the pandemic, we shifted to rely more heavily on income from our real estate assets and tapped into the embedded value in those assets to support the Company through the crisis. With the lingering effects of COVID-19 and the 2023 Hollywood strikes now largely behind us, we expect the quality of film releases to continue to improve, encouraging audiences to return to our cinemas and restoring our ability to use cinema-generated cash flows to strengthen and expand our real estate portfolio. To meet anticipated liquidity needs, we continue to hold one property, Newberry Yard, for sale. Even after this planned disposition, we expect to retain properties in Pennsylvania, Manhattan, and Australia that, when capital resources allow, we believe offer meaningful potential to build long-term stockholder value.
Key Performance Indicators ( Unaudited; U.S. dollars in thousands, except per patron data)
Food and Beverage Spend Per Patron
A key performance indicator utilized by management in our cinema segment is Food and Beverage (“F&B”) Spend Per Patron (“SPP”), which is calculated based on our total Food & Beverage Revenues on a post-tax basis divided by our attendance during a specific period.
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One of our key strategic priorities has been the continued enhancement of food and beverage offerings across several of our global cinema locations. Thirty-seven of our theater locations offer elevated food and beverage menus (i.e. menus that are beyond traditional popcorn, soda, and candy). We use F&B SPP as a measure of our food and beverage operational performance as compared to that of our competitors. Although the profitability of our food and beverage operations is influenced by numerous factors, including labor and cost of goods, F&B SPP serves as an indicator of our ability to achieve consistent strong top-line performance. In addition, F&B SPP highlights our ability to optimize revenue by effectively promoting and selling supplementary products to our customers during each visit. Moreover, this metric assists in evaluating how well we can differentiate our F&B offerings from our competitors. Management uses F&B SPP to adjust food and beverage pricing strategies at our individual theaters, measure the effectiveness of promotional marketing initiatives, optimize menu offerings, and ensure price barriers are not created for our customers. F&B revenue is particularly important to cinema operators, as film distributors do not share in this revenue stream.
| Quarter Months Ended | Nine Months Ended | |||||
|---|---|---|---|---|---|---|
| September 30, | September 30, | |||||
| Food & Beverage Spend Per Patron (in functional currency) | 2025 | 2024 | % Change Fav/(Unfav) | 2025 | 2024 | % Change Fav/(Unfav) |
| United States | $8.74 | $8.24 | 6.1% | $8.70 | $8.05 | 8.1% |
| Australia | $8.05 | $7.90 | 1.9% | $8.07 | $7.76 | 4.0% |
| New Zealand | $6.75 | $6.62 | 2.0% | $6.91 | $6.63 | 4.2% |
Average Ticket Price per Patron
An additional key performance indicator utilized by management in our cinema segment is Average Ticket Price (“ATP”) Per Patron, which is calculated based on our total Box Office Revenues on a post-tax basis divided by our attendance during a specific period. ATP serves to measure our operational cinema performance when compared to that of our competitors. ATP is a useful metric for evaluating our ability to achieve a strong top line performance, gauging the effectiveness of our cinemas’ pricing strategies and our ability to draw audiences back to our theaters. Management uses ATP to adjust and inform ticket pricing schemes for our individual theaters, measure the effectiveness of our content programming, and ensure that price barriers are not created for core guests.
| Quarter Months Ended | Nine Months Ended | |||||
|---|---|---|---|---|---|---|
| September 30, | September 30, | |||||
| Average Ticket Price (in functional currency) | 2025 | 2024 | % Change Fav/(Unfav) | 2025 | 2024 | % Change Fav/(Unfav) |
| United States | $13.13 | $13.17 | (0.3)% | $13.35 | $13.38 | (0.2)% |
| Australia | $15.44 | $13.13 | 17.6% | $15.81 | $13.26 | 19.2% |
| New Zealand | $13.65 | $10.95 | 24.7% | $14.09 | $11.30 | 24.7% |
Real Estate Key Performance Indicators
The key performance indicators used by management in our real estate segment vary according to jurisdiction. At the current time, in the United States, we assess our real estate division (including 44 Union Square and our historical railroad assets, but excluding our Live Theatres), solely on a net operating income basis. We have no specific key performance standards to compare performance from period to period. Rather we analyze operating budgets and projections and compare actual results to budgeted or projected results from time to time.
In Australia and New Zealand, we assess our properties held for rent using net operating income, occupancy factor (the percentage of the net rentable area of our properties that are leased) and average lease duration. We believe our chosen indicators help us effectively assess the return on investment on our real estate assets.
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| Quarter Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| September 30, | September 30, | ||||||||
| Real Estate (in functional currency)'000 | 2025 | 2024 | % Change Fav/(Unfav) | 2025 | 2024 | % Change Fav/(Unfav) | |||
| United States | Net Operating Income | $ (334) | $ (247) | (35.5)% | $ | (755) | $ (1,100) | 31.3% | |
| Australia | Net Operating Income | $ 414 | $ 930 | (55.5)% | $ | 2,154 | $ 2,401 | (10.3)% | |
| Occupancy Factor | 98.3% | 95.0% | 3.3 | %age points | 98.3% | 95.0% | 3.3 | %age points | |
| Average Lease Duration | 3.74 Years | 2.96 Years | 0.78 years | 3.74 Years | 2.96 Years | 0.78 years | |||
| New Zealand | Net Operating Income | $ (150) | $ (520) | 71.1% | $ | (834) | $ (1,933) | 56.8% | |
| Occupancy Factor | 100% | 100% | - | %age points | 100% | 100% | - | %age points | |
| Average Lease Duration | 0.33 Years | 0.87 Years | (0.54) years | 0.33 Years | 0.87 Years | (0.54) years |
In the case of our Live Theatres, with respect to key performance indicators, we primarily look to the Live Theatre rental revenue and ancillary income from the theatres. This key performance indicator represents box office revenues less amounts paid to producers for license fee settlements, plus ancillary income earned by us from certain theatre operations. Our Live Theatre rental revenue and ancillary income for the third quarter of 2025 improved to $0.9 million compared to $0.4 million for the third quarter of 2024. Our Live Theatre rental revenue and ancillary income for the nine months ended September 30, 2025 improved to $2.1 million compared to $1.2 million for the nine months ended September 30, 2024.
Cinema Exhibition Segment Overview
We operate our worldwide cinema exhibition businesses through various subsidiaries under various brands:
in the U.S., under the Reading Cinemas, Angelika Film Centers, and Consolidated Theatres brands.
in Australia, under the Reading Cinemas, Angelika Cinemas, the State Cinema by Angelika, and for our one unconsolidated joint venture theatre, Event Cinemas brands.
in New Zealand, under the Reading Cinemas and for our two unconsolidated joint venture theatres, Rialto Cinemas brands.
Shown in the following table are the number of locations and screens in our cinema circuit in each country, by state/territory/region, our cinema brands, and our interest in the underlying assets as of September 30, 2025.
| Country | State / Territory / — Region | Location — Count (3) | Screen — Count | Interest in Asset Underlying the Cinema — Leased | Owned | Operating Brands |
|---|---|---|---|---|---|---|
| United States | Hawaii | 6 | 74 | 6 | Consolidated Theatres | |
| California | 5 | 58 | 5 | Reading Cinemas, Angelika Film Center | ||
| New York | 3 | 16 | 2 | 1 | Angelika Film Center | |
| Texas | 1 | 8 | 1 | Angelika Film Center | ||
| New Jersey | 1 | 12 | 1 | Reading Cinemas | ||
| Virginia | 1 | 8 | 1 | Angelika Film Center | ||
| Washington, D.C. | 1 | 3 | 1 | Angelika Film Center | ||
| U.S. Total | 18 | 179 | 17 | 1 | ||
| Australia | Victoria | 9 | 62 | 9 | Reading Cinemas | |
| New South Wales | 6 | 44 | 6 | Reading Cinemas | ||
| Queensland | 7 | 64 | 5 | 2 | Reading Cinemas, Angelika Cinemas, Event Ci nemas(1) | |
| Western Australia | 4 | 27 | 3 | 1 | Reading Cinemas | |
| South Australia | 2 | 15 | 2 | Reading Cinemas | ||
| Tasmania | 2 | 14 | 2 | Reading Cinemas, State Cinema by Angelika | ||
| Australia Total | 30 | 226 | 27 | 3 | ||
| New Zealand | Wellington | 2 | 15 | 2 | Reading Cinemas | |
| Otago | 2 | 12 | 1 | 1 | Reading Cinemas, Rialto Cinemas (2) | |
| Auckland | 2 | 15 | 2 | Reading Cinemas, Rialto Cinemas (2) | ||
| Canterbury | 1 | 8 | 1 | Reading Cinemas | ||
| Southland | 1 | 5 | 1 | Reading Cinemas | ||
| Bay of Plenty | 1 | 5 | 1 | Reading Cinemas | ||
| Hawke's Bay | 1 | 4 | 1 | Reading Cinemas | ||
| New Zealand Total | 10 | 64 | 7 | 3 | ||
| GRAND TOTAL | 58 | 469 | 51 | 7 |
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(1) Our Company has a 33.3% unincorporated joint venture interest in a 16-screen cinema located in Mt. Gravatt, Queensland managed by Event Cinemas.
(2) Our Company is a 50% joint venture partner in two New Zealand Rialto Cinemas, with a total of 13 screens. We are responsible for the booking of these cinemas and our joint venture partner, Event Cinemas, manages their day-to-day operations.
(3) (i) Our Wellington lease count includes our Courtenay Central cinema, which, having been sold on January 31, 2025, is now under an Agreement to Lease and we anticipate reopening following the completion of certain third-party construction and seismic strengthening works; and (ii) we closed one underperforming cinema located in San Diego, CA on April 15, 2025.
Our cinema revenues consist primarily of cinema ticket sales, F&B sales, screen advertising, gift card sales, cinema rentals, and online convenience fee revenue generated by the sale of our cinema tickets through our websites and mobile apps. Cinema operating expenses consist of the costs directly attributable to the operation of the cinemas, including (i) film rent expense, (ii) cost of goods sold, (iii) operating costs, such as labor costs and utilities, and (iv) occupancy costs. Cinema revenues and certain expenses fluctuate with the availability of quality content and the number of weeks such content stays on screen. For a breakdown of our current cinema assets that we own and/or manage, please refer to Part I, Item 1 – Our Business of our 2024 Form 10-K.
Cinema Pipeline and Closures
On January 31, 2025, in connection with our sale of our Wellington Properties to Prime Property Group Limited (“Prime”), we entered into an agreement to lease with Prime to fit out and operate under a long-term lease our previously owned 10 screen cinema at the to be redeveloped Courtenay Central in Wellington, New Zealand (the “ATL”). Under the ATL, Prime is obligated to redevelop Courtenay Central and upgrade it to meet current earthquake standards. We intend to renovate the existing cinema to a “best-in-class” standard.
Our Board has also authorized management to proceed with the negotiation of a lease for a new state-of-the-art cinema, located in Noosa, Queensland, Australia.
On April 15, 2025, we closed our underperforming cinema located in San Diego, California.
Cinema Upgrades
The upgrades to our cinema circuits’ film exhibition technology and amenities over the years are as summarized in the following table as of September 30, 2025:
| Location Count | Screen Count | |
|---|---|---|
| Screen Format | ||
| Digital (all cinemas in our cinema circuit) | 58 | 469 |
| IMAX | 1 | 1 |
| TITAN XC and TITAN LUXE | 26 | 32 |
| Dine-in Service | ||
| Gold Lounge (AU/NZ) (1) | 11 | 29 |
| Premium (AU/NZ) (2) | 18 | 47 |
| Spotlight (U.S.) (3) | 1 | 6 |
| Upgraded Food & Beverage menu (U.S.) (4) | 15 | n/a |
| Premium Seating (features recliner seating) | 34 | 200 |
| Liquor Licenses (5) | 49 | n/a |
(1) Gold Lounge : This is our "First Class Full Dine-in Service" in our Australian and New Zealand cinemas, which includes an upgraded F&B menu (with alcoholic beverages), luxury recliner seating features (intimate 25-50 seat cinemas) and waiter service.
(2) Premium Service : This is our "Business Class Dine-in Service" in our Australian and New Zealand cinemas, which typically includes upgraded F&B menu (some with alcoholic beverages) and may include luxury recliner seating features (less intimate 80-seat cinemas), but no waiter service.
(3) Spotlight Service: Spotlight, our first dine-in cinema concept in the U.S., is situated at Reading Cinemas in Murrieta, California. Prior to the COVID-19 Pandemic, six of our 17 auditoriums at this cinema featured waiter service before the movie began with a full F&B menu, luxury recliner seating, and laser focus on customer service. Our Spotlight service remains suspended.
(4) Upgraded Food & Beverage Menu : Features an elevated F&B menu including a menu of locally inspired and freshly prepared items that go beyond traditional concessions, which we have worked with former Food Network executives to create. The elevated menu also includes beer, wine and/or spirits at most of our locations.
(5) Liquor Licenses: Licenses are applicable at each cinema location, rather than each cinema auditorium. As of today, we have beer and wine licenses in 100% of our cinemas and liquor licenses in all but three of our cinemas operating in the U.S. In Australia, 86% of our cinemas are licensed and we have no liquor licenses pending. In New Zealand, 38 % of our cinemas are licensed and we have two liquor licenses pending.
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During the third quarter, we commenced a renovation of our theater in Bakersfield, California. We are upgrading our Reading Cinemas at Valley Plaza Mall by (i) creating a TITAN LUXE premium screen featuring a Dolby Atmos sound system and luxury heated recliner seats, (ii) installing luxury heated recliner seats in our IMAX auditorium and (iii) installing luxury recliner seats in eight other auditoriums. The renovated IMAX auditorium is now open for business and we anticipate the renovation to be completed before the end of 2025.
Real Estate Segment Overview
Through our various subsidiaries, we engage in the real estate business through the development, ownership, rental or licensing to third parties of retail, commercial, and Live Theatre assets. Our real estate business creates long-term value for our stockholders through the continuous improvement and development of our investment and operating properties, including our ETCs. In addition to owning the fee interests in 7 of our cinemas (as presented in the table under Cinema Exhibition Overview ), as of September 30, 2025, we:
own our 44 Union Square property in Manhattan comprised of retail and office space, which is currently in the lease-up phase. The cellar, ground floor, and second floor of the building are now fully leased to Petco, which is in occupancy of its premises on a full rent paying basis;
own and operate two ETCs known as Newmarket Village (in a suburb of Brisbane), and the Belmont Common (in a suburb of Perth), the cinema components of which are included in the fee owned screen count above;
own and operate our administrative office building in South Melbourne, Australia;
own and operate the fee interests in two developed commercial properties in Manhattan improved with Live Theatres comprised of a single stage in each location;
own a 75% managing member interest in Sutton Hill Properties LLC a limited liability company which in turn owns the fee interest in and improvements constituting our Cinemas 1,2,3 located in Manhattan. On September 30, 2025, we entered into an agreement to purchase all of the partnership interests in Sutton Hill Associates, a California general partnership (“SHA”). Through its ownership of 100% of the membership interests in Sutton Hill Capital, LLC SHA’s principal assets are (i) the 25% non-controlling membership interest in Sutton Hill Properties, LLC that we do not already own. The ownership of Sutton Hill Properties, LLC for accounting purposes is already consolidated into our financial statements. The transaction is anticipated to close in the 4 th quarter 2025 ;
own the approximately 23.9-acre Newberry Yard property in Williamsport, Pennsylvania, which is currently being held for sale; and
own approximately 201-acres principally in Pennsylvania from our legacy railroad business, including the Reading Viaduct in downtown Philadelphia;
For a breakdown of our real estate assets, made current by our discussion below, please refer to Part I, Item 1 – Our Business of our 2024 Form 10-K.
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The combination of the COVID-19 pandemic, the lack of any material U.S. public pandemic financial assistance due to our public company status, the 2023 Hollywood Strikes, increased interest rates, inflation, increased labor costs, and decreases in the value of the Australian Dollar and New Zealand Dollar vis-a-vis the U.S. Dollar over the past five years, have significantly impacted our cinema operations and necessitated capital conservation to sustain our cinema operations and service our debt. This has required us to rethink our real estate business plan and to monetize a number of properties that had pre-COVID been slated for long-term development.
Since 2021, we have monetized the following property assets:
(i) Our non-income producing land holdings in Coachella, California and Manukau, New Zealand;
(ii) Our Redyard ETC in Auburn, Australia;
(iii) Our Royal George Live Theatre complex in Chicago (slated for redevelopment, and now being redeveloped for residential purposes by the new owner);
(iv) The land underlying our cinema in Invercargill, New Zealand;
(v) Our non-competitive four-screen cinema in Maitland, Australia;
(vi) Our administrative office building in Culver City, California;
(vii) On January 31, 2025, our approximately 3.7 acre five-parcel assemblage in the entertainment center of Wellington, New Zealand, which includes the Courtenay Central building; and
(viii)Most recently, on May 21, 2025, our Cannon Park property in Townsville, Queensland, Australia.
These properties were identified for sale and sold for various reasons, such reasons have included without limitation
(i) our need for liquidity due to the circumstances referred to above,
(ii) the amount of capital required to materially increase their value in the immediate to mid-term,
(iii) with respect to certain assets, their immaterial or non-income producing nature, or
(iv) in the case of our Culver City office building, the property was not required for our operations because it exceeded our office size requirements. Since the sale of this office building, we have been working remotely in Southern California.
As of the date of this Report, we continue to own our approximately 23.9-acre Newberry Yard in Williamsport, Pennsylvania (also currently non-income producing), which is being held for sale.
United States:
44 Union Square Redevelopment (New York, N.Y.) – On January 27, 2022, we entered a long-term lease with Petco for the lower level, ground floor, and second floor of the building. Petco continues to be open for business and in occupancy on a full rent paying basis. We continue our efforts to find a tenant for the remaining four floors of the building. As we previously reported, we signed a Letter of Intent and have exchanged lease drafts with one potential tenant which would offer a non-office use. Such Letter of Intent does not prohibit us from reviewing or accepting other proposals and we have received and responded to such alternatives. As the office leasing market in Mid Town South continues to improve, we have experienced increased interest from potential office users.
Minetta Lane Theatre (New York, N.Y.) – Audible has a license agreement with us through March 15, 2027. Audible presents productions and special live performance engagements on the Audible streaming service. During 2025, Audible presented a number of original productions , including Sexual Misconduct of the Middle Class with Hugh Jackman, Creditors with Liev Schreiber, and the musical Mexodus .
Orpheum Theatre (New York, N.Y.) – STOMP closed (after 30 years at our theatre) on January 8, 2023. Under our termination agreement with the producers of STOMP, we have certain rights to provide the New York City venue for any future production of that show. Following STOMP’s historic run at the Orpheum, the theatre has hosted a variety of productions including Rachel Bloom’s Death, Let Me Do My Show, Hamlet starring Eddie Izzard, The Big Gay Jamboree, The Jonathon Larson Project and a new show, Ginger Twinsies.
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Cinemas 1,2,3 (New York, N.Y.) – Currently operated as the Cinemas 123, we have historically treated this property as an asset held for long term development. However, in light of a variety of factors, such as market conditions in Manhattan for real estate assets, cost of capital and demands on our liquidity, we have begun to explore alternatives for this property.
The Reading Viaduct and Adjacent Properties (Philadelphia, Pennsylvania) – This continues to be an area of focus in 2025 as we continue our efforts to maximize the potential of our real estate holdings in Philadelphia. Since 2023, we have resumed work on this project, particularly concentrating on the Reading Viaduct—an 0.7-mile-long raised rail bed and bridge system spanning the Callowhill and Poplar neighborhoods, extending to Vine Street in the heart of the city's Central Business District. Comprising approximately 6.5 acres of land, along with various connecting bridges over public streets and sidewalks, the Reading Viaduct represents a significant contiguous land holding unobstructed by public thoroughfares.
While there has been interest from the City of Philadelphia and the City Center District in acquiring the Reading Viaduct for park purposes, no concrete steps have been taken to proceed with condemnation or transfer of the property other than a petition brought by the City before the Surface Transportation Board (“STB”) seeking a determination that the Reading Viaduct is no longer railroad property subject to the jurisdiction of the STB. Under applicable law, railroad land subject to the jurisdiction of the STB is not subject to condemnation by state or local authorities. The STB has granted the City’s petition insofar as it sought a determination that our prior tenant, SEPTA, had abandoned its rail road use, the determination falls short of deterring our rights as the residual owner of the land in question, and our Company has appealed the STB’s decision.
We have retained consultants and are working to down-date our various titles, many of which date back to the 19 th century.
Australia:
Newmarket Village ETC (Brisbane, Australia) – We will continue to operate our Newmarket Village ETC, which includes Reading Cinemas as an anchor tenant. Our site includes a 23,218 square foot parcel adjacent to the center, improved with an office building. Over the next few years, we will be evaluating different development options for this space. As of the date of this report, the combined center and office building is 98% leased.
The Belmont Common, (Belmont, Perth, Australia) – The total gross leasable area of the Belmont Common is 60,117 square feet of net rentable land. Our multiplex cinema is the anchor tenant with six third-party tenants. The site is currently 100% leased.
On May 21, 2025, we sold our Cannon Park ETC in Townsville, Queensland, Australia, which consisted of our Cannon Park City Center and Cannon Park Discount Center properties, comprising approximately 9.4-acres, for a purchase price of $20.7 million (AU$32.0 million). We have retained a long-term lease of the cinema component of that property.
New Zealand:
On January 31, 2025, we sold all of our properties in Wellington, New Zealand (including the Courtenay Central building) to Prime Property Group (“Prime”) for a purchase price of $21.5 million (NZ$38.0 million). We understand that Prime intends to redevelop the properties, including a seismic upgrade of the existing Courtenay Central building. As a part of that sale transaction, we have entered into an Agreement to Lease for the cinema component of the to be upgraded Courtenay Central building.
On October 21, 2025, we entered into a agreement for sale and purchase for our cinema and retail property located in Napier, New Zealand, providing for a purchase price of NZ$2,500,000. The transaction is subject to the satisfactory completion of buyer due diligence No assurances can be given that the transaction will be consummated.
For a complete list of our principal properties, see Part I, Item 2 – Properties under the heading “ Investment and Development Property” in our 2024 Form 10-K”.
Corporate Matters
Refer to Part I – Financial Information, Item 1 – Notes to Consolidated Financial Statements-- Note 18 – Stock-Based Compensation and Stock Repurchases for details regarding our stock repurchase program and Board, Executive and Employee stock-based remuneration programs.
Please refer to our 2024 Form 10-K for more details on our cinema and real estate segments.
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RESULTS OF OPERATIONS
The table below summarize s the results of operations for each of our principal business segments along with the non-segment information for the quarter and nine months ended September 30, 2025, and September 30, 2024, respectively:
| (Dollars in thousands) | Quarter Ended — September 30, 2025 | September 30, 2024 | % Change — Fav/ (Unfav) | Nine Months Ended — September 30, 2025 | September 30, 2024 | % Change — Fav/ (Unfav) |
|---|---|---|---|---|---|---|
| SEGMENT RESULTS | ||||||
| Revenue | ||||||
| Cinema exhibition | $ 48,555 | 56,357 | (14) % | $ 141,740 | $ 140,570 | 1 % |
| Real estate | 4,567 | 4,898 | (7) % | 14,065 | 14,844 | (5) % |
| Inter-segment elimination | (952) | (1,165) | 18 % | (3,089) | (3,463) | 11 % |
| Total revenue | 52,170 | 60,090 | (13) % | 152,716 | 151,951 | 1 % |
| Operating expense | ||||||
| Cinema exhibition | (43,694) | (50,633) | 14 % | (129,292) | (136,407) | 5 % |
| Real estate | (1,863) | (2,106) | 12 % | (5,658) | (6,801) | 17 % |
| Inter-segment elimination | 952 | 1,165 | (18) % | 3,089 | 3,463 | (11) % |
| Total operating expense | (44,605) | (51,574) | 14 % | (131,861) | (139,745) | 6 % |
| Depreciation and amortization | ||||||
| Cinema exhibition | (2,045) | (2,608) | 22 % | (6,358) | (7,753) | 18 % |
| Real estate | (1,115) | (1,210) | 8 % | (3,341) | (4,084) | 18 % |
| Total depreciation and amortization | (3,160) | (3,818) | 17 % | (9,699) | (11,837) | 18 % |
| General and administrative expense | ||||||
| Cinema exhibition | (1,060) | (903) | (17) % | (3,358) | (2,973) | (13) % |
| Real estate | (202) | (186) | (9) % | (605) | (725) | 17 % |
| Total general and administrative expense | (1,262) | (1,089) | (16) % | (3,963) | (3,698) | (7) % |
| Segment operating income | ||||||
| Cinema exhibition | 1,756 | 2,213 | (21) % | 2,732 | (6,563) | >100 % |
| Real estate | 1,387 | 1,396 | (1) % | 4,461 | 3,234 | 38 % |
| Total segment operating income (loss) | $ 3,143 | $ 3,609 | (13) % | $ 7,193 | $ (3,329) | >100 % |
| NON-SEGMENT RESULTS | ||||||
| Depreciation and amortization expense | (75) | (106) | 29 % | (293) | (305) | 4 % |
| General and administrative expense | (3,397) | (3,846) | 12 % | (11,231) | (11,928) | 6 % |
| Interest expense, net | (4,174) | (5,245) | 20 % | (13,270) | (15,907) | 17 % |
| Equity earnings of unconsolidated joint ventures | 121 | 71 | 70 % | 428 | 164 | >100 % |
| Gain (loss) on sale of assets | (66) | (208) | 68 % | 8,332 | (1,324) | >100 % |
| Other income (expense) | 462 | (714) | >100 % | (2,145) | (593) | (>100) % |
| Income before income taxes | (3,986) | (6,439) | 38 % | (10,986) | (33,222) | 67 % |
| Income tax benefit (expense) | (319) | (700) | 54 % | (1,071) | (321) | (>100) % |
| Net income (loss) | (4,305) | (7,139) | 40 % | (12,057) | (33,543) | 64 % |
| Less: net income (loss) attributable to noncontrolling interests | (148) | (111) | (33) % | (477) | (481) | 1 % |
| Net income (loss) attributable to Reading International, Inc. | $ (4,157) | $ (7,028) | 41 % | $ (11,580) | $ (33,062) | 65 % |
| Basic earnings (loss) per share | $ (0.18) | $ (0.31) | 42 % | $ (0.51) | $ (1.48) | 66 % |
Consolidated and Non-Segment Results:
Third Quarter Net Results
Revenue
Revenue for the quarter ended September 30, 2025, decreased by 13% (or $7.9 million), to $52.2 million, compared to the same period in the prior year, primarily due to decreased cinema revenues from lower attendance in all three countries as a result of weaker overall movie slate released from the Hollywood studios in the third quarter of 2025 compared to the same period 2024. These decreases in revenue were compounded by a decline in real estate rent revenues in AU/NZ due to the sale of Cannon Park and the weakening of the AU/NZ foreign exchange rates against the U.S. dollar, partially offset by improved Live Theatre rental and ancillary income.
Revenue for the nine months ended September 30, 2025, increased by 1% (or $0.8 million), to $152.7 million, when compared to the same period in the prior year. This increase is attributable to improved box office from better movie slate as Lilo & Stitch and A Minecraft Movie released during the second quarter of 2025, improved US Food & Beverage revenue and better Live theatre rental and ancillary income , which was partially offset by a decrease in real estate rent revenue and a decrease in Food & Beverage revenues in Australia and New Zealand.
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Segment Operating Income/(Loss)
Our total segment operating income for the quarter ended September 30, 2025, decreased by $0.5 million, from $3.6 million to $3.1 million, primarily due to weakened cinema performance, partially offset by lower depreciation and amortization.
Our total segment operating income for the nine months ended September 30, 2025 of $7.2 million, increased by $10.5 million, from a loss of $3.3 million, primarily due (i) improved box office revenue worldwide and US Food & Beverage revenue due to stronger movie slate released during the second quarter of 2025 such as Lilo & Stitch and A Minecraft Movie , (ii) decreased operating expenses in both segments demonstrating our ongoing focus on operational excellence, and (iii) a reduction in depreciation and amortization. This was partially offset by weakened real estate revenue and increased general and administrative expenses.
During the third quarter of 2025, both the Australia and New Zealand dollars devalued against the U.S. dollar. The average Australia dollar exchange rate against the U.S. dollar for the third quarter of 2025 decreased by 2.3% compared to the same period in 2024. The average New Zealand dollar exchange rate against the U.S. dollar for the third quarter of 2025 decreased by 3.1% compared to the same period in 2024. The devaluation of the Australia and New Zealand currencies negatively impacts segment operating income and positively impacts segment operating loss in U.S. dollar terms for the period.
Net Income/(Loss)
Our net loss attributable to Reading International, Inc. for the quarter ended September 30, 2025, improved by 41%, from a loss of $7.0 million to a loss of $4.2 million, when compared to the same period in the prior year, primarily due to decreases in interest expense and depreciation and amortization expenses along with an increase in other income, offset by decreased segment income.
For the nine months ended September 30, 2025, net loss attributable to Reading International, Inc. improved by 65%, from a loss of $33.1 million to a loss of $11.6 million, when compared to the same period in the prior year primarily due to improved segment results, decreased interest expense, and a gain on sale of assets compared to a loss on sale of our Culver City office in the same period prior year. This was partially offset by increased other expenses.
Income Tax Expense
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. The OBBBA includes significant tax law changes, including the permanent extension of certain provisions from the Tax Cuts and Jobs Act, modifications to the international tax framework, and the reinstatement of favorable business tax provisions. These include 100% bonus depreciation, immediate expensing of Section 174 domestic research and experimental expenditures, and revised limitations under Section 163(j) on the deductibility of business interest expense. The legislation has multiple effective dates, with certain provisions effective beginning in 2025, and others implemented through 2027. The OBBBA does not have a material effect on the Company's consolidated financial statements for the year ending December 31, 2025.
Income tax expense for the three months ended September 30, 2025, decreased by $0.4 million compared to the equivalent prior-year period. The change between 2025 and 2024 is primarily related to a decrease in reserve for valuation allowance in 2025.
Income tax expense for the nine months ended September 30, 2025, increased by $0.8 million compared to the equivalent prior-year period. The change between 2025 and 2024 is primarily related to a decrease in consolidated losses in 2025.
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Business Segment Results
Cinema Exhibition
The following table details our cinema exhibition segment operating results for the quarter and nine months ended September 30, 2025, and September 30, 2024, respectively:
| (Dollars in thousands) | Quarter Ended — September 30, 2025 | % of Revenue | September 30, 2024 | % of Revenue | Nine Months Ended — September 30, 2025 | % of Revenue | September 30, 2024 | % of Revenue | Fav/(Unfav) — Quarter Ended | Nine Months Ended | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| REVENUE | |||||||||||
| United States | Admissions revenue | $ 13,784 | 28% | $ 15,445 | 27% | $ 40,128 | 28% | $ 39,368 | 28% | (11) % | 2 % |
| Food & beverage revenue | 9,276 | 19% | 9,824 | 17% | 26,659 | 19% | 24,237 | 17% | (6) % | 10 % | |
| Advertising and other revenue | 2,062 | 4% | 2,547 | 5% | 6,889 | 5% | 6,996 | 5% | (19) % | (2) % | |
| $ 25,122 | 52% | $ 27,816 | 49% | $ 73,676 | 52% | $ 70,601 | 50% | (10) % | 4 % | ||
| — | — | ||||||||||
| Australia | Admissions revenue | $ 12,396 | 26% | $ 14,445 | 26% | $ 36,301 | 26% | $ 35,559 | 25% | (14) % | 2 % |
| Food & beverage revenue | 6,459 | 13% | 8,691 | 15% | 18,528 | 13% | 20,805 | 15% | (26) % | (11) % | |
| Advertising and other revenue | 1,657 | 3% | 1,609 | 3% | 4,274 | 3% | 4,248 | 3% | 3 % | 1 % | |
| $ 20,512 | 42% | $ 24,745 | 44% | $ 59,103 | 42% | $ 60,612 | 43% | (17) % | (2) % | ||
| — | — | ||||||||||
| New Zealand | Admissions revenue | $ 1,836 | 4% | $ 2,215 | 4% | $ 5,718 | 4% | $ 5,559 | 4% | (17) % | 3 % |
| Food & beverage revenue | 906 | 2% | 1,339 | 2% | 2,807 | 2% | 3,262 | 2% | (32) % | (14) % | |
| Advertising and other revenue | 179 | 0% | 242 | 0% | 436 | 0% | 536 | 0% | (26) % | (19) % | |
| $ 2,921 | 6% | $ 3,796 | 7% | $ 8,961 | 6% | $ 9,357 | 7% | (23) % | (4) % | ||
| Total revenue | $ 48,555 | 100% | $ 56,357 | 100% | $ 141,740 | 100% | $ 140,570 | 100% | (14) % | 1 % | |
| OPERATING EXPENSE | |||||||||||
| United States | Film rent and advertising cost | $ (7,557) | 16% | $ (8,783) | 16% | $ (21,723) | 15% | $ (21,192) | 15% | 14 % | (3) % |
| Food & beverage cost | (2,344) | 5% | (2,632) | 5% | (6,858) | 5% | (6,550) | 5% | 11 % | (5) % | |
| Occupancy expense | (4,112) | 8% | (5,198) | 9% | (12,499) | 9% | (17,530) | 12% | 21 % | 29 % | |
| Labor cost | (4,184) | 9% | (4,657) | 8% | (12,477) | 9% | (12,807) | 9% | 10 % | 3 % | |
| Utilities | (1,657) | 3% | (1,957) | 3% | (4,207) | 3% | (4,602) | 3% | 15 % | 9 % | |
| Cleaning and maintenance | (1,751) | 4% | (1,914) | 3% | (5,046) | 4% | (4,998) | 4% | 9 % | (1) % | |
| Insurance | — | — | 0% | — | 0% | — | 0% | - % | - % | ||
| Other operating expenses | (1,872) | 4% | (1,860) | 3% | (6,339) | 4% | (6,078) | 4% | (1) % | (4) % | |
| $ (23,477) | 48% | $ (27,001) | 48% | $ (69,149) | 49% | $ (73,757) | 52% | 13 % | 6 % | ||
| Australia | Film rent and advertising cost | $ (5,484) | 11% | $ (6,775) | 12% | $ (16,026) | 11% | $ (16,170) | 12% | 19 % | 1 % |
| Food & beverage cost | (1,328) | 3% | (1,922) | 3% | (3,934) | 3% | (4,631) | 3% | 31 % | 15 % | |
| Occupancy expense | (4,415) | 9% | (4,673) | 8% | (13,221) | 9% | (13,612) | 10% | 6 | 3 % | |
| Labor cost | (3,377) | 7% | (3,794) | 7% | (10,108) | 7% | (10,510) | 7% | 11 | 4 % | |
| Utilities | (815) | 2% | (719) | 1% | (2,308) | 2% | (2,171) | 2% | (13) | (6) % | |
| Cleaning and maintenance | (1,163) | 2% | (1,352) | 2% | (3,466) | 2% | (3,728) | 3% | 14 | 7 % | |
| Other operating expenses | (903) | 2% | (966) | 2% | (2,477) | 2% | (2,747) | 2% | 7 | 10 % | |
| $ (17,485) | 36% | $ (20,201) | 36% | $ (51,540) | 36% | $ (53,569) | 38% | 13 % | 4 % | ||
| New Zealand | Film rent and advertising cost | $ (803) | 2% | $ (1,048) | 2% | $ (2,592) | 2% | $ (2,482) | 2% | 23 % | (4) % |
| Food & beverage cost | (159) | 0% | (273) | 0% | (575) | 0% | (703) | 1% | 42 | 18 % | |
| Occupancy expense | (746) | 2% | (804) | 1% | (2,216) | 2% | (2,347) | 2% | 7 | 6 % | |
| Labor cost | (504) | 1% | (631) | 1% | (1,617) | 1% | (1,786) | 1% | 20 | 9 % | |
| Utilities | (173) | 0% | (114) | 0% | (407) | 0% | (311) | 0% | (52) | (31) % | |
| Cleaning and maintenance | (182) | 0% | (256) | 0% | (572) | 0% | (650) | 0% | 29 % | 12 % | |
| Other operating expenses | (165) | 0% | (305) | 1% | (624) | 0% | (802) | 1% | 46 % | 22 % | |
| $ (2,732) | 6% | $ (3,431) | 6% | $ (8,603) | 6% | $ (9,081) | 6% | 20 % | 5 % | ||
| Total operating expense | $ (43,694) | 90% | $ (50,633) | 90% | $ (129,292) | 91% | $ (136,407) | 97% | 14 % | 5 % | |
| DEPRECIATION, AMORTIZATION, IMPAIRMENT AND GENERAL AND ADMINISTRATIVE EXPENSE | |||||||||||
| United States | Depreciation and amortization | $ (1,043) | 2% | $ (1,259) | 2% | $ (3,321) | 2% | $ (3,784) | 3% | 17 % | 12 % |
| General and administrative expense | (674) | 1% | (513) | 1% | (2,130) | 2% | (1,885) | 1% | (31) % | (13) % | |
| $ (1,717) | 4% | $ (1,772) | 3% | $ (5,451) | 4% | $ (5,669) | 4% | 3 % | 4 % | ||
| Australia | Depreciation and amortization | $ (895) | 2% | $ (1,237) | 2% | $ (2,714) | 2% | $ (3,619) | 3% | 28 % | 25 % |
| General and administrative expense | (314) | 1% | (389) | 1% | (1,086) | 1% | (1,087) | 1% | 19 % | - % | |
| $ (1,209) | 2% | $ (1,626) | 3% | $ (3,800) | 3% | $ (4,706) | 3% | 26 % | 19 % | ||
| New Zealand | Depreciation and amortization | $ (107) | 0% | $ (112) | 0% | $ (323) | 0% | $ (350) | 0% | 4 % | 8 % |
| General and administrative expense | (72) | 0% | (1) | 0% | (142) | 0% | (1) | 0% | (>100) % | (>100) % | |
| $ (179) | 0% | $ (113) | 0% | $ (465) | 0% | $ (351) | 0% | (58) % | (32) % | ||
| Total depreciation, amortization, general and administrative expense | $ (3,105) | 6% | $ (3,511) | 6% | $ (9,716) | 7% | $ (10,726) | 8% | 12 % | 9 % | |
| OPERATING INCOME (LOSS) – CINEMA | |||||||||||
| United States | $ (72) | (0)% | $ (957) | (2)% | $ (924) | (1)% | $ (8,825) | (6)% | 92 % | 90 % | |
| Australia | 1,818 | 4% | 2,918 | 5% | 3,763 | 3% | 2,337 | 2% | (38) % | 61 % | |
| New Zealand | 10 | 0% | 252 | 0% | (107) | (0)% | (75) | (0)% | (96) % | (43) % | |
| Total Cinema operating income (loss) | $ 1,756 | 4% | $ 2,213 | 4% | $ 2,732 | 2% | $ (6,563) | (5)% | (21) % | >100 % |
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Third Quarter Results
Revenue
For the quarter ended September 30, 2025, cinema revenue decreased by $7.8 million, to $48.6 million compared to the same period in the prior year. This decrease was primarily due to a global decrease in cinema revenues driven by a weaker film slate compared to Q3 2024 when Deadpool & Wolverine , Beetlejuice Beetlejuice, Despicable Me 4, Twisters and It Ends with Us were released, coupled with a weakening of AU/NZ foreign exchange rates. Cinema revenue was also adversely impacted by the closure of an underperforming cinema complex in the second quarter 2025.
For the nine months ended September 30, 2025, cinema revenue increased by $1.2 million, to $141.7 million compared to the same period in the prior year. This increase was primarily driven by (i) a global increase in box office due to a stronger movie slate as Lilo & Stitch and A Minecraft Movie released during the second quarter of 2025 , and (ii) higher Food & Beverage revenues in our U.S. cinema circuit due to increased attendance combined with higher F&B SPP. Our results were partially offset by lower Food & Beverage revenue in AU and NZ and a weakening of AU and NZ foreign exchange rates against the U.S. dollar. Revenues were adversely impacted by the closure of underperforming cinema complexes in the second quarter of each of 2024 and 2025.
Cinema Segment Operating Income/(Loss)
Cinema segment operating income for the quarter ended September 30, 2025, decreased by $0.5 million, from $2.2 million to $1.8 million when compared to the same period in the prior year. The decrease in operating income is due to a reduction in cinema revenue in all three countries from decreased attendance, partially offset by a decrease in operating expenses, occupancy expenses and a decrease in depreciation and amortization globally.
Cinema segment operating income for the nine months ended September 30, 2025, increased by $9.3 million, from a loss of $6.6 million to an income of $2.7 million when compared to the same period in the prior year primarily due to (i) increased cinema revenues from a better movie slate (ii) efficiently managed cinema expenses, and (iii) a reduction in depreciation and amortization in all three countries.
Operating Expense
Operating expenses for the quarter ended September 30, 2025, decreased by $6.9 million, to $43.7 million, compared to the same quarter in the prior year. This decrease was primarily due to decreased global attendance resulting in lower film rent, Food and Beverage cost, and other variable costs in all three countries, plus lower US occupancy cost.
Operating expenses for the nine months ended September 30, 2025, is $129.3 million, decreased by $7.1 million compared to the same time period in the prior year due to US rent negotiations, operational efficiency and closure of under performing cinemas.
Depreciation, amortization, impairment, general and administrative expense
Depreciation, amortization, impairment, and general and administrative expenses for the quarter ended September 30, 2025, decreased $0.4 million, to $3.1 million, compared to the same quarter in the prior year.
Depreciation, amortization, impairment, and general and administrative expenses for the nine months ended September 30, 2025, decreased $1.0 million, to $9.7 million, compared to the same period in the prior year.
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Real Estate
The following table details our real estate segment operating results for the quarter and nine months ended September 30, 2025 and September 30, 2024, respectively:
| (Dollars in thousands) | Quarter Ended — September 30, 2025 | % of Revenue | September 30, 2024 | % of Revenue | Nine Months Ended — September 30, 2025 | % of Revenue | September 30, 2024 | % of Revenue | Fav/(Unfav) — Quarter Ended | Nine Months Ended | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| REVENUE | |||||||||||
| United States | Live theatre rental and ancillary income | $ 902 | 20% | $ 391 | 8% | $ 2,075 | 15% | $ 1,220 | 8% | >100 % | 70 % |
| Property rental income | 1,050 | 23% | 1,053 | 21% | 3,164 | 22% | 3,192 | 22% | - % | (1) % | |
| 1,952 | 43% | 1,444 | 29% | 5,239 | 37% | 4,412 | 30% | 35 % | 19 % | ||
| Australia | Property rental income | 2,394 | 52% | 3,082 | 63% | 8,150 | 58% | 9,342 | 63% | (22) % | (13) % |
| New Zealand | Property rental income | 221 | 5% | 372 | 8% | 676 | 5% | 1,090 | 7% | (41) % | (38) % |
| Total revenue | $ 4,567 | 100% | $ 4,898 | 100% | $ 14,065 | 100% | $ 14,844 | 100% | (7) % | (5) % | |
| OPERATING EXPENSE | |||||||||||
| United States | Live theatre cost | $ (304) | 7% | $ (196) | 4% | $ (796) | 6% | $ (706) | 5% | (55) % | (13) % |
| Occupancy expense | (207) | 5% | (167) | 3% | (559) | 4% | (521) | 4% | (24) % | (7) % | |
| Labor cost | — | 0% | — | 0% | — | 0% | — | 0% | - % | - % | |
| Utilities | (22) | 0% | (9) | 0% | (50) | 0% | (88) | 1% | (>100) % | 43 % | |
| Cleaning and maintenance | (52) | 1% | (37) | 1% | (158) | 1% | (115) | 1% | (41) % | (37) % | |
| Other operating expenses | (288) | 6% | (245) | 5% | (718) | 5% | (865) | 6% | (18) % | 17 % | |
| (873) | 19% | (654) | 13% | $ (2,281) | 16% | $ (2,295) | 15% | (33) % | 1 % | ||
| Australia | Occupancy expense | (421) | 9% | (509) | 10% | $ (1,389) | 10% | $ (1,477) | 10% | 17 % | 6 % |
| Labor cost | (42) | 1% | (69) | 1% | (161) | 1% | (182) | 1% | 39 % | 12 % | |
| Utilities | (67) | 1% | (22) | 0% | (101) | 1% | (55) | 0% | (>100) % | (84) % | |
| Cleaning and maintenance | (198) | 4% | (232) | 5% | (634) | 5% | (726) | 5% | 15 % | 13 % | |
| Other operating expenses | (191) | 4% | (165) | 3% | (648) | 5% | (697) | 5% | (16) % | 7 % | |
| (919) | 20% | (997) | 20% | $ (2,933) | 21% | $ (3,137) | 21% | 8 % | 7 % | ||
| New Zealand | Occupancy expense | (6) | 0% | (129) | 3% | $ (95) | 1% | $ (350) | 2% | 95 % | 73 % |
| Labor cost | — | 0% | (6) | 0% | (2) | 0% | (17) | 0% | 100 % | 88 % | |
| Utilities | — | 0% | (13) | 0% | (5) | 0% | (49) | 0% | 100 % | 90 % | |
| Cleaning and maintenance | — | 0% | (15) | 0% | (4) | 0% | (33) | 0% | 100 % | 88 % | |
| Other operating expenses | (65) | 1% | (292) | 6% | (338) | 2% | (920) | 6% | 78 % | 63 % | |
| (71) | 2% | (455) | 9% | $ (444) | 3% | $ (1,369) | 9% | 84 % | 68 % | ||
| Total operating expense | $ (1,863) | 41% | $ (2,106) | 43% | $ (5,658) | 40% | $ (6,801) | 46% | 12 % | 17 % | |
| DEPRECIATION, AMORTIZATION, GENERAL AND ADMINISTRATIVE EXPENSE | |||||||||||
| United States | Depreciation and amortization | $ (658) | 14% | $ (673) | 14% | $ (1,991) | 14% | $ (2,089) | 14% | 2 % | 5 % |
| General and administrative expense | (168) | 4% | (193) | 4% | (483) | 3% | (673) | 5% | 13 % | 28 % | |
| (826) | 18% | (866) | 18% | (2,474) | 18% | (2,762) | 19% | 5 % | 10 % | ||
| Australia | Depreciation and amortization | $ (397) | 9% | $ (490) | 10% | $ (1,173) | 8% | $ (1,632) | 11% | 19 % | 28 % |
| General and administrative expense | (34) | 1% | 7 | (0)% | (121) | 1% | (52) | 0% | (>100) % | (>100) % | |
| (431) | 9% | (483) | 10% | (1,294) | 9% | (1,684) | 11% | 11 % | 23 % | ||
| New Zealand | Depreciation and amortization | (60) | 1% | (47) | 1% | (177) | 1% | (363) | 2% | (28) % | 51 % |
| General and administrative expense | — | 0% | — | 0% | (1) | 0% | — | 0% | - % | - % | |
| (60) | 1% | (47) | 1% | (178) | 1% | (363) | 2% | (28) % | 51 % | ||
| Total depreciation, amortization, general and administrative expense | $ (1,317) | 29% | $ (1,396) | 29% | $ (3,946) | 28% | $ (4,809) | 32% | 6 % | 18 % | |
| OPERATING INCOME (LOSS) - REAL ESTATE | |||||||||||
| United States | $ 253 | 6% | $ (76) | (2)% | $ 484 | 3% | $ (645) | (4)% | >100 % | >100 % | |
| Australia | 1,044 | 23% | 1,602 | 33% | 3,923 | 28% | 4,521 | 30% | (35) % | (13) % | |
| New Zealand | 90 | 2% | (130) | (3)% | 54 | 0% | (642) | (4)% | >100 % | >100 % | |
| Total real estate operating income (loss) | $ 1,387 | 30% | $ 1,396 | 29% | $ 4,461 | 32% | $ 3,234 | 22% | (1) % | 38 % |
Third Quarter Results
Revenue
Real estate rent revenue for the quarter ended September 30, 2025, decreased by $0.3 million to $4.6 million, compared to the same period in the prior year primarily due to the sale of our Wellington and Cannon Park assets, which resulted in a reduction in rental income, offset by increased Live Theatre rental and ancillary income.
For the nine months ended September 30, 2025, real estate rent revenue decreased by $0.8 million, to $14.1 million, compared to the same period in the prior year. The decrease was primarily due to lower rental income as a result of the sales of our Wellington property assets and our Cannon Park property assets, partially offset by higher Live Theatre rental and ancillary income in the U.S.
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Real Estate Segment Income/(Loss)
Real estate segment operating income for the quarter ended September 30, 2025 remained relatively flat at $1.4 million
For the nine months ended September 30, 2025, real estate segment operating income increased by $1.2 million, to $4.5 million, compared to $3.2 million in the same period in the prior year. This increase in segment income was due to an increase in U.S. Live Theatre rental and ancillary income, decreased operating expenses and reduced depreciation, amortization, and G&A expense in all three countries, partially offset by a reduction in AU and NZ rental income from the sale of properties.
These results were impacted by the sale of our (i) Wellington property assets in January 2025, (ii) Cannon Park property in May 2025 and (iii) Culver City office building in February 2024.
LIQUIDITY AND CAPITAL RESOURCES
Our Financing Strategy
Prior to the COVID-19 pandemic, we used cash generated from operations and other excess cash, to the extent not needed, to fund capital investments contemplated by our business plan, in order to pay down our loans and credit facilities. This provided us with availability under our loan facilities for future use and thereby, reduced interest charges. On a periodic basis, we reviewed the maturities of our borrowing arrangements and negotiated renewals and extensions where necessary.
However, disruptions to our cinema cash flow caused by the COVID-19 pandemic, the 2023 Hollywood Strikes and periods of weak theatrical releases, augmented by changing consumer habits due to each of the foregoing, and continuing macroeconomic headwinds, have made it necessary for us to defer capital expenditures and to rely on borrowings and the proceeds of asset monetizations to cover our costs of operations, pay interest, and pay down debt.
Our NAB financing requires that our Company comply with certain covenants. Furthermore, our Company’s use of loan funds from NAB is limited due to restrictions on the expatriation of funds from Australia to the United States. We believe that our lenders understand that the continuing effects of the factors discussed in the preceding paragraph, and various economic factors, are not of our own making, that we are taking aggressive steps to manage these industry headwinds, and that, generally speaking, our relationships with our lenders are positive.
While our Company believes that global cinema business is recovering, we still face macroeconomic pressures such as high interest rates, inflation, supply chain issues and increased film rent, labor, and operating costs, many of which are beyond our control. We have taken a variety of steps across our various operating jurisdictions to reduce our spending, including, without limitation, deferring non-essential capital expenditures, deferring certain operational expenses, renegotiating occupancy arrangements, closing certain unprofitable cinemas, deferring compensation expenses, and eliminating certain T&E expenses. We closely monitor our debt maturity dates, and where appropriate, we may seek necessary term extensions. In May 2025, we extended our Emerald Creek Capital debt’s maturity date to November 6, 2026 with an option to extend an additional 6 months to May 6, 2027. In July 2025, we executed an amendment to our Bank of America loan to extend the maturity date to May 18, 2026, and modified the paydown schedule. In July 2025, we extended the maturity date of our Santander loan to June 1, 2026. On November 12, 2025, we extended our NAB facility by 5 years and on November 13, 2025, extended our Valley National debt for a year to October 1, 2026. As of September 30, 2025, we have debt of $16.5 million coming due in the next 12 months. While the Central Banks of the three countries in which we do business have reduced interest rates from recent highs, rates remain elevated when compared to pre-Covid periods.
On September 30, 2025, we entered into an agreement to purchase all of the partnership interests in Sutton Hill Associates, a California general partnership (“SHA”). Through its ownership of 100% of the membership interests in Sutton Hill Capital, LLC SHA’s principal assets are (i) the 25% non-controlling membership interest in Sutton Hill Properties, LLC that we do not already own and which in turn owns the land and improvements commonly known as the Cinemas 1,2,3, and (ii) the tenant’s interest in the ground lease and in the improvements commonly known at the Village East By Angelika. Both of these cinemas are located in the Borough of Manhattan, NY, NY. We have been operating these cinemas for more than the past 20 years and the ownership of these assets for accounting purposes is already consolidated into our financial statements. The consummation of the contemplated transaction is not anticipated to have a material impact on our operations. That transaction is anticipated to close in the 4 th quarter 2025.
As discussed elsewhere in this Report, we believe that cinema cash flow for 2025 and onward will be stronger than in recent periods. However, if our Company is unable to generate sufficient cash flow in the upcoming months, we will be required to adopt one or more alternatives, such as reducing, delaying or eliminating planned capital expenditures, monetizing additional assets, restructuring our debt and/or our lease obligations or finding additional sources of liquidity. In May 2025, we sold our Cannon Park property assets in Australia for $20.7 million (AU$32.0 million ) and repaid our $12.9 million (AU$20.0 million) Bridge Facility. In January 2025, we sold our Wellington property assets in New Zealand for $21.5 million (NZ$38.0 million) and repaid our $10.7 million (NZ$18.8 million) loan to Westpac and paid down $6.1 million to Bank of America. In early 2024, understanding our reduced need for administrative space during
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the shift to remote-working, we decreased our overall general and administrative expense by selling our administrative building in Culver City, California, freeing up cash of approximately $1.3 million (after paying off our mortgage, brokerage commissions and transactional fees). We are currently reviewing our need for replacement of office space. On October 21, 2025, we entered into an agreement for sale and purchase for our cinema and retail property located in Napier, New Zealand, providing for a purchase price of NZ$2,500,000. The transaction is subject to the satisfactory completion of buyer due diligence. No assurances can be given that the transaction will be consummated. Also, our Newberry Yard property in Williamsport, Pennsylvania continues to be listed as an asset held for sale. This property was historically used as a rail yard, and, accordingly, improved with tracks and switches and has direct access to the area’s rail system. Certain issues as to the location of various railroad rights of way have now been resolved on what we believe to be favorable terms and terms which enhanced the value of the property.
If we cannot obtain sufficient net proceeds from the disposition of these assets (or determine to defer disposition due to unfavorable market conditions), in addition to other strategies, we may look to monetize other real estate assets.
For more information about our borrowings, please refer to Part I – Financial Information, Item 1 – Notes to Consolidated Financial Statements-- Note 13 – Borrowings . For more information about our efforts to manage our liquidity issues, see Part I- Financial Information, Item 1 – Notes to Consolidated Financial Statements – Note 2 – Liquidity and Impairment Assessment .
The change s in cash and cash equivalents for the nine months ended September 30, 2025, and September 30, 2024, respectively, are discussed as follows :
| Nine Months Ended | |||
|---|---|---|---|
| September 30, | |||
| (Dollars in thousands) | 2025 | 2024 | % Change |
| Net cash provided by (used in) operating activities | $ (5,856) | $ (11,818) | 50 % |
| Net cash provided by (used in) investing activities | 37,322 | 4,989 | >100 % |
| Net cash provided by (used in) financing activities | (36,172) | 2,127 | (>100) % |
| Effect of exchange rate on cash and restricted cash | 172 | 744 | (77) % |
| Increase (decrease) in cash and cash equivalents and restricted cash | $ (4,534) | $ (3,958) | (15) % |
Operating activities
Cash used in operating activities for the nine months ended September 30, 2025, decreased by $6.0 million, to $5.9 million compared to cash used in the same period in prior year of $11.8 million. This was primarily driven by a decrease in net operating loss, partially offset by a decrease in net payables.
Investing activities
Cash provided in investing activities during the nine months ended September 30, 2025 was $37.3 million compared to cash provided in the same prior year period of $5.0 million. This was due to proceeds from sale of our Cannon Park property assets in May 2025 and the Wellington property assets in January 2025, compared to the proceeds from the sale of our Culver City office in February 2024.
Financing activities
Cash used in financing activities for the nine months ended September 30, 2025, increased by $38.3 million, to $36.2 million compared to cash provided by financing activities of $2.1 million in the same prior year period. This was primarily due to the paydowns of our Westpac debt, Bank of America debt and NAB Bridge Facility in 2025 as discussed previously, compared to the NAB Bridge Facility draw in the same period of 2024.
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The table below presents the changes in our total available resources (cash and borrowings), debt-to-equity ratio, working capital, and other relevant information addressing our liquidity for the nine months ended September 30, 2025, and preceding four years:
| ($ in thousands) | As of and for the 9-Months Ended — September 30, 2025 | Year Ended December 31 — 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| Total Resources (cash and borrowings) | |||||
| Cash and cash equivalents (unrestricted) | $ 8,090 | $ 12,347 | $ 12,906 | $ 29,947 | $ 83,251 |
| Unused borrowing facility | 2,359 | 7,859 | 7,859 | 12,000 | 12,000 |
| Restricted for capital projects | 2,359 | 7,859 | 7,859 | 12,000 | 12,000 |
| Unrestricted capacity | — | — | — | — | — |
| Total resources at period end | 10,449 | 20,206 | 20,765 | 41,947 | 95,251 |
| Total unrestricted resources at period end | 8,090 | 12,347 | 12,906 | 29,947 | 83,251 |
| Debt-to-Equity Ratio | |||||
| Total contractual facility | $ 174,997 | $ 210,572 | $ 218,159 | $ 227,633 | $ 248,948 |
| Total debt (gross of deferred financing costs) | 172,638 | 202,713 | 210,300 | 215,633 | 236,948 |
| Current | 16,451 | 69,193 | 35,070 | 38,026 | 12,060 |
| Non-current | 156,187 | 133,520 | 175,230 | 177,607 | 224,888 |
| Finance lease liabilities | 11 | 43 | 83 | 28 | 68 |
| Total book equity | (13,012) | (4,790) | 32,996 | 63,279 | 105,060 |
| Debt-to-equity ratio | (13.27) | (42.32) | 6.37 | 3.41 | 2.26 |
| Changes in Working Capital | |||||
| Working capital (deficit) (1) | $ (92,684) | $ (104,584) | $ (88,373) | $ (74,152) | $ (6,673) |
| Current ratio | 0.17 | 0.35 | 0.30 | 0.39 | 0.94 |
| Capital Expenditures (including acquisitions) | $ 1,176 | $ 2,028 | $ 4,711 | $ 9,780 | $ 14,428 |
(1) Our working capital is reported as a deficit, as we receive revenue from our cinema business ahead of the time that we have to pay our associated liabilities. We use the money we receive to pay down our borrowings in the first instance.
As of September 30, 2025, we had $8.1 million in unrestricted cash and cash equivalents compared to (i) 12.3 million on December 31, 2024 and (ii) $5.9 million on March 31, 2025. On September 30, 2025, our total outstanding borrowings were $172.6 million compared to $202.7 million on December 31, 2024.
We manage our cash, investments, and capital structure to meet the short-term and long-term obligations of our business, while maintaining financial flexibility and liquidity. We forecast, analyze, and monitor our cash flows to enable investment and financing within the overall constraints of our financial strategy. In the past, we used cash generated from operations and other excess cash to the extent not needed for any capital expenditures, to pay down our loans and credit facilities providing us some flexibility on our available loan facilities for future use and thereby, reducing interest charges.
C ONTRACTUAL OBLIGATIONS, COMMITMENTS AND CONTINGENCIES
The following table provides information with respect to the maturities and scheduled principal repayments of our recorded contractual obligations and certain of our commitments and contingencies, either recorded or off-balance sheet, as of September 30, 2025:
| (Dollars in thousands) | 2025 | 2026 | 2027 | 2028 | 2029 | Thereafter | Total |
|---|---|---|---|---|---|---|---|
| Debt (1) | $ 23,222 | $ 121,503 | $ — | $ — | $ — | $ — | $ 144,725 |
| Operating leases, including imputed interest | 7,341 | 27,756 | 25,920 | 24,836 | 23,407 | 126,347 | 235,607 |
| Finance leases, including imputed interest | 11 | — | — | — | — | — | 11 |
| Subordinated debt (1) | — | — | 27,913 | — | — | — | 27,913 |
| Pension liability | 137 | 576 | 607 | 639 | 445 | — | 2,404 |
| Interest on pension liability | 34 | 108 | 77 | 45 | 11 | — | 275 |
| Estimated interest on debt (2) | 3,373 | 9,798 | 1,186 | — | — | — | 14,357 |
| Village East purchase option (3) | 5,900 | — | — | — | — | — | 5,900 |
| Total | $ 40,018 | $ 159,741 | $ 55,703 | $ 25,520 | $ 23,863 | $ 126,347 | $ 431,192 |
(1) Information is prese nted gross of deferred financing costs.
(2) Estimated interest on debt is based on the anticipated loan balances for future periods and current applicable interest rates.
(3) Please see disclosures above regarding the SHA transaction.
Litigation
We are currently involved in certain legal proceedings and, as required, have accrued estimates of probable and estimable losses for the resolution of these claims.
Please refer to Part I, Item 3 – Legal Proceedings in our 2024 Form 10-K for more information. There have been no material changes to our litigation since our 2024 Form 10-K, except as set forth in Notes to Consolidated Financial Statements-- Note 16 – Commitments
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and Contingencies included herein in Part I – Financial Information, Item 1 – Financial Statements on this Quarterly Report on Form 10-Q. This note sets out our litigation accounting policies.
Off-Balance Sheet Arrangements
There are no off-balance sheet arrangements or obligations (including contingent obligations) that have, or are reasonably likely to have, a current or future material effect on our financial condition, changes in the financial condition, revenue or expense, results of operations, liquidity, capital expenditures or capital resources .
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
We believe that the application of the following accounting policies requires significant judgments and estimates in the preparation of our Consolidated Financial Statements and hence, are critical to our business operations and the understanding of our financial results:
(i) Impairment of Long-lived Assets (other than Goodwill and Intangible Assets with indefinite lives) – we evaluate our long-lived assets and finite-lived intangible assets using historical and projected data of cash flows as our primary indicator of potential impairment and we take into consideration the seasonality of our business. If the sum of the estimated, undiscounted future cash flows is less than the carrying amount of the asset, then an impairment is recognized for the amount by which the carrying value of the asset exceeds its estimated fair value based on an appraisal or a discounted cash flow calculation. For certain non-income producing properties or for those assets with no consistent historical or projected cash flows, we obtain appraisals or other evidence to evaluate whether there are impairment indicators for these assets.
No impairment losses were recorded for long-lived and finite-lived intangible assets for the quarter ended September 30, 2025.
(ii) Impairment of Goodwill and Intangible Assets with indefinite lives – goodwill and intangible assets with indefinite useful lives are not amortized, but instead, tested for impairment at least annually on a reporting unit basis. The impairment evaluation is based on the present value of estimated future cash flows of each reporting unit plus the expected terminal value. There are significant assumptions and estimates used in determining the future cash flows and terminal value. The most significant assumptions include our cost of debt and cost of equity assumptions that comprise the weighted average cost of capital for each reporting unit. Accordingly, actual results could vary materially from such estimates.
No impairment losses were recorded for goodwill and indefinite-lived intangible assets for the quarter ended September 30, 2025.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Our statements in this quarterly report, including the documents incorporated herein by reference, contain a variety of forward-looking statements as defined by the Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: "may," "will," "expect," "believe," "intend," "future," and "anticipate" and similar references to future periods. Examples of forward-looking statements include, among others, our beliefs regarding the impact of the 2023 Hollywood Strikes on the cinema business; our expected operating results, including our ultimate return to pre-pandemic type results; our expectations regarding the recovery and future of the cinema exhibition industry, including the strength of movies anticipated for release in the future; our expectations regarding patrons returning to our theatres and continuing to use discretionary funds on entertainment outside of the home; our beliefs regarding the impact of our cinema-anchored real estate developments; our beliefs regarding the success of our diversified business strategy; our belief regarding the attractiveness of 44 Union Square to potential tenants and ability to lease space on acceptable terms; our expectations regarding the effects of our enhanced F&B offerings on our operating results; our expectations regarding our ability to monetize our assets on terms acceptable to us; our expectations regarding credit facility covenant compliance and our ability to continue to obtain necessary covenant waivers and loan extensions on terms acceptable to us; and our expectations of our liquidity and capital requirements and the allocation of funds.
Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following:
with respect to our cinema and Live Theatre operations:
reduced consumer demand due to inflationary pressures and other macroeconomic pressures;
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the adverse continuing effects of external events of the past pandemic and the 2023 Hollywood strikes on our Company’s results from operations, liquidity, cash flows, financial condition, and access to credit markets;
a change in consumer behavior in favor of alternative forms or mediums of entertainment, and limited availability of wide motion picture release content;
reduction in operating margins (or negative operating margins) due to (i) decreased attendance, (ii) limited availability of wide release content, and (iii) increased operating expenses;
competition from cinema operators who have successfully used debtor laws to reduce their debt and/or rent exposure;
the uncertainty as to the scope and extent of our government’s potential responses to future outbreak of infectious diseases;
the number and attractiveness to moviegoers of the films released in future periods, and potential changes in release dates for motion pictures;
the lack of availability of films in the short- or long-term as a result of (i) major film distributors releasing scheduled theatrical films on alternative channels; (ii) disruptions of film production; or (iii) rescheduling of movie releases into later periods, as experienced due to the implications of the 2023 Hollywood strikes;
the amount of money spent by film distributors to promote their motion pictures;
the licensing fees and terms required by film distributors from motion picture exhibitors in order to exhibit their films;
the comparative attractiveness of motion pictures as a source of entertainment and willingness and/or ability of consumers (i) to spend their dollars on entertainment and (ii) to spend their entertainment dollars on movies in an outside-the-home environment;
the extent to which we encounter competition from other cinema exhibitors, from other sources of outside-the-home entertainment, and from inside-the-home entertainment options, such as “home cinemas” and competitive film product distribution technology, such as, streaming, cable, satellite broadcast, video on demand platforms, and Blu-ray/DVD rentals and sales;
our ability to continue to obtain, to the extent needed, waivers or other financial accommodations from our lenders and landlords;
the impact of major movies being released directly to one of the multitudes of streaming services available;
the impact of certain competitors’ subscription or advance pay programs;
the failure of our new initiatives to gain significant customer acceptance and use or to generate meaningful profits;
the cost and impact of improvements to our cinemas, such as improved seating, enhanced F&B offerings, and other improvements;
the ability to negotiate favorable rent abatement, deferral and repayment terms with our landlords (which may include lenders who have foreclosed on the collateral held by our prior landlords);
disruptions during cinema improvements;
in the U.S., the impact of the termination and phase-out of the so called “Paramount Decree;”
the risk of damage and/or disruption of cinema businesses from earthquakes as certain of our operations are in geologically active areas;
the impact of protests, demonstrations, and civil unrest on, among other things, government policy, consumer willingness to go to the movies;
labor shortages and increased labor costs related to such shortages and to increasingly costly labor laws and regulations applicable to part time non-exempt workers. Disruptions in film supply and film marketing due to the 2023 Hollywood Strikes; and
competition from a newly restructured Regal, which may have lower occupancy costs than our cinemas.
with respect to our real estate development and operation activities:
the increased costs of wages, supplies, services and other development expenses from inflation;
the impact on tenants from inflationary pressures;
uncertainty as to governmental responses to infectious diseases;
the rental rates and capitalization rates applicable to the markets in which we operate and the quality of properties that we own;
the ability to negotiate and execute lease agreements with material tenants;
the extent to which we can obtain on a timely basis the various land use approvals and entitlements needed to develop our properties;
the risks and uncertainties associated with real estate development;
the availability and cost of labor and materials;
the ability to obtain all permits to construct improvements;
the ability to finance improvements, including, but not limited to increased cost of borrowing and tightened lender credit policies;
the disruptions to our business from construction and/or renovations;
the possibility of construction delays, work stoppage, and material shortage;
competition for development sites and tenants;
environmental remediation issues;
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the extent to which our cinemas can continue to serve as an anchor tenant that will, in turn, be influenced by the same factors as will influence generally the results of our cinema operations;
the increased depreciation and amortization expense as construction projects transition to leased real property;
the ability to negotiate and execute joint venture opportunities and relationships;
the risk of damage and/or disruption of real estate businesses from earthquakes as certain of our operations are in geologically active areas;
the disruptions or reductions in the utilization of entertainment, shopping and hospitality venues, as well as in our operations, due to pandemics, epidemics, widespread health emergencies, or outbreaks of infectious diseases, or to changing consumer tastes and habits; and
the impact of protests, demonstrations, and civil unrest on government policy, consumer willingness to visit shopping centers.
with respect to our operations generally as an international company involved in both the development and operation of cinemas and the development and operation of real estate and previously engaged for many years in the railroad business in the United States:
our ability to renew, extend, renegotiate or replace our loans that mature in 2025 and beyond, and the impact of increasing interest rates;
our ability to grow our Company and provide value to our stockholders;
our ongoing access to borrowed funds and capital and the interest that must be paid on that debt and the returns that must be paid on such capital, and our ability to borrow funds to help cover the cessation of cash flows we experienced during the COVID-19 pandemic;
our ability to reallocate funds among jurisdictions to meet short-term liquidity needs;
the relative values of the currency used in the countries in which we operate;
changes in government regulation, including by way of example, the costs resulting from the requirements of Sarbanes-Oxley and other increased regulatory requirements;
our labor relations and costs of labor (including future government requirements with respect to minimum wages, shift scheduling, the use of consultants, pension liabilities, disability insurance and health coverage, and vacations and leave);
our exposure from time to time to legal claims and to uninsurable risks, such as those related to our historic railroad operations, including potential environmental claims and health-related claims relating to alleged exposure to asbestos or other substances now or in the future recognized as being possible causes of cancer or other health related problems, and class actions and private attorney general wage and hour and/or safe workplace-based claims;
our exposure to cybersecurity risks, including misappropriation of customer information or other breaches of information security;
the impact of future major outbreaks of contagious diseases;
the availability of employees and/or their ability or willingness to conduct work under any revised work environment protocols;
the increased risks related to employee matters, including increased employment litigation and claims relating to terminations or furloughs caused by cinema and ETC closures;
our ability to generate significant cash flow from operations if our cinemas and/or ETCs continue to experience demand at levels significantly lower than historical levels, which could lead to a substantial increase in indebtedness and negatively impact our ability to comply with the financial covenants, if applicable, in our debt agreements;
our ability to comply with credit facility covenants and our ability to obtain necessary covenant waivers and necessary credit facility amendments;
changes in future effective tax rates and the results of currently ongoing and future potential audits by taxing authorities having jurisdiction over our various companies;
inflationary pressures on labor and supplies, and supply chain disruptions;
changes in applicable accounting policies and practices;
changes in future effective tax rates and the results of currently ongoing and future potential audits by taxing authorities having jurisdiction over our various companies;
the impact of the conflict events occurring in Eastern Europe and the threats of potential conflicts in the Asia-Pacific region;
the impact of the conflict events occurring in Israel and the threats of other potential conflicts in the Middle East, and
the impact of tariff regulations enforced by the U.S. against various nations.
The above list is not necessarily exhaustive, as business is by definition unpredictable and risky, and subject to influence by numerous factors outside of our control, such as changes in government regulation or policy, competition, interest rates, supply, technological innovation, changes in consumer taste, weather, earthquakes, pandemics, and the extent to which consumers in our markets have the economic wherewithal to spend money on beyond-the-home entertainment. Refer to Item 1A - Risk Factors , as well as the risk factors set forth in any other filings made under the Securities Act of 1934, as amended, including any of our Quarterly Reports on Form 10-Q, for more information.
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Given the variety and unpredictability of the factors that will ultimately influence our businesses and our results of operation, no guarantees can be given that any of our forward-looking statements will ultimately prove to be correct. Actual results will undoubtedly vary and there is no guarantee as to how our securities will perform either when considered in isolation or when compared to other securities or investment opportunities.
Forward-looking statements made by us in this quarter report are based only on information currently available to us and are current only as of the date of this Quarterly Report on Form 10-Q for the period ended September 30, 2025. We undertake no obligation to publicly update or to revise any of our forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable law. Accordingly, you should always note the date to which our forward-looking statements speak.
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Item 3 – Quantitative and Qualitative Disclosure about Market Risk
The SEC requires that registrants include information about potential effects of changes in currency exchange and interest rates in their filings. Several alternatives, all with some limitations, have been offered. We base the following discussion on a sensitivity analysis that models the effects of fluctuations in currency exchange rates and interest rates. This analysis is constrained by several factors, including the following:
It is based on a single point in time; and
It does not include the effects of other complex market reactions that would arise from the changes modeled.
Although the results of such an analysis may be useful as a benchmark, they should not be viewed as forecasts.
Currency Risk
While we report our earnings and net assets in U.S. dollars, substantial portions of our revenue and of our obligations are denominated in either Australian or New Zealand dollars. The value of these currencies can vary significantly compared to the U.S. dollar and compared to each other. We do not hedge the currency risk, but rather have relied upon the natural hedges that exist as a result of the fact that our film costs are typically fixed as a percentage of the box office, and our local operating costs and obligations are likewise typically denominated in local currencies. However, we do have intercompany debt and our ability to service this debt could be adversely impacted by declines in the relative value of the Australian and New Zealand dollars compared to the U.S. dollar. Also, our use of local borrowings to mitigate the business risk of currency fluctuations has reduced our flexibility to move cash between jurisdictions. Set forth below is a chart of the exchange ratios between these two currencies in relation to US dollars since 1996:
In recent periods, we have paid material intercompany dividends and have repaid intercompany debt, using these proceeds to fund Operations and capital investment in the United States. Accordingly, our debt levels in Australia are higher than they would have been if funds had not been returned for such purposes. On a company wide basis, this means that a reduction in the relative strength of the U.S. dollar versus the Australian dollar and/or the New Zealand dollar would effectively raise the overall cost of our borrowing and capital and make it more expensive to return funds from the United States to Australia and New Zealand.
Our Company transacts business in Australia and New Zealand and is subject to risks associated with fluctuating foreign currency exchange rates. During the third quarter of 2025, the average Australian dollar and New Zealand dollar weakened against the U.S. dollar by 2.3% and 3.1%, respectively, compared to the same prior year period.
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At September 30, 2025, approximately 37.3% and 5.5% of our assets were invested in assets denominated in Australian dollars (Reading Entertainment Australia) and New Zealand dollars (Reading New Zealand), respectively, including approximately $5.5 million in cash and cash equivalents. At December 31, 2024, approximately 35.6% and 8.3% of our assets were invested in assets denominated in Australian dollars (Reading Entertainment Australia) and New Zealand dollars (Reading New Zealand), respectively, including approximately $7.3 million in cash and cash equivalents.
Our policy in Australia and New Zealand is to match revenues and expenses, whenever possible, in local currencies. As a result, we have procured a majority of our expenses in Australia and New Zealand in local currencies. Despite this natural hedge, recent movements in foreign currencies have had an effect on our current earnings. The effect of the translation adjustment on our assets and liabilities noted in our other comprehensive income was a decrease of $0.8 million for the quarter ended September 30, 2025. As we continue to progress our acquisition and development activities in Australia and New Zealand, no assurances can be given that the foreign currency effect on our earnings will not be material in the future.
Historically, our policy has been to borrow in local currencies to finance the development and construction of our long-term assets in Australia and New Zealand. As a result, the borrowings in local currencies have provided somewhat of a natural hedge against the foreign currency exchange exposure. We have also historically paid management fees to the U.S. to cover a portion of our domestic overhead. The fluctuations of the Australian and New Zealand currencies, however, may impact our ability to rely on such funding for ongoing support of our domestic overhead.
We record unrealized foreign currency translation gains or losses that could materially affect our financial position. As of September 30, 2025, and December 31, 2024, the balance of cumulative foreign currency translation adjustments were approximately a ($3.1) million loss and ($5.5) million loss, respectively.
Interest Rate Risk
Our exposure to interest rate risk arises out of our long-term floating-rate borrowings. To manage the risk, we utilize interest rate derivative contracts to convert certain floating-rate borrowings into fixed-rate borrowings. It is our Company’s policy to enter into interest rate derivative transactions only to the extent considered necessary to meet its objectives as stated above. Our Company does not enter into these transactions or any other hedging transactions for speculative purposes.
Historically, we maintain most of our cash and cash equivalent balances in short-term money market instruments with original maturities of three months or less. Due to the short-term nature of such investments, a change of 1% in short-term interest rates would not have a material effect on our financial condition. The negative spread between our borrowing costs and earned interest will exacerbate as we hold cash to provide a safety net to meet our expenses.
We have a combination of fixed and variable interest rate loans. In connection with our variable interest rate loans, a change of approximately 1% in short-term interest rates would have resulted in an approximate $414,000 increase or decrease in our quarterly interest expense.
For further discussion on market risks, please refer to Part I, Item 1A – Risk Factors included on our 2024 Form 10-K.
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Item 4 – Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Company’s reports filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
As previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, management identified a material weakness in our internal control over financial reporting related to the erroneous reversal and treatment of a liability. This material weakness existed for the periods June 30, 2024, September 30, 2024, December 31, 2024, March 31, 2025, and June 30, 2025.
During the quarter ended September 30, 2025, we completed the remediation plan for this material weakness. Remediation focused on implementing additional internal controls relating to recognition and measurement of significant transactions.
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the above-mentioned new controls, and our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Exchange Act. Based upon that evaluation, we concluded that, as of September 30, 2025, our disclosure controls and procedures were effective, and that the material weakness has been remediated as of September 30, 2025.
Changes in Internal Control over Financial Reporting
Other than the remediation described above, there were no other changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the third quarter ended September 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II – Other Information
Item 1 – Legal Proceedings
The information required under Part II, Item 1 ( Legal Proceedings) is incorporated by reference to the information contained in Notes to Consolidated Financial Statements-- Note 16 – Commitments and Contingencies included herein in Part I – Financial Information, Item 1 – Financial Statements on this Quarterly Report on Form 10-Q.
For further details on our legal proceedings, please refer to Part I, Item 3 – L egal Proceedings, contained in our 2024 Form 10-K.
Item 1A – Risk Factors
There have been no material changes to the risk factors we previously disclosed in Item 1A of our 2024 Form 10-K.
We encourage investors to review the risks and uncertainties relating to our business disclosed under the heading Risk Factors or otherwise in the 2024 Form 10-K, as well as those contained in Part I – Forward-Looking Statements thereof, as revised or supplemented by our Quarterly Reports filed with the SEC since the filing of the 2024 Form 10-K.
Item 2 – Sales of Equity Securities and Use of Proceeds
None.
Item 3 – Defaults upon Senior Securities
None.
Item 4 – Mine Safety Disclosure
Not applicable.
Item 5 – Other Information
During the quarter ended September 30, 2025, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or a “ non-Rule 10b5-1 trading arrangement” (in each case, as defined in Item 408 of Regulation S-K).
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Item 6 – Exhibits
10
1
| 10.1* | Waiver and Tenth Amendment to Second Amendment and Restated Credit Agreement, dated July 3, 2025, between Consolidated Amusement Holdings, LLC and Bank of America, N.A |
|---|---|
| 10.2* † | Form of Stock Option Agreement (Employee/Executive Officer) under the 2020 Stock Incentive Plan |
| 31.1* | Certification of the Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 31.2* | Certification of the Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 32** | Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| 101 | The following material from our Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Cash Flows, and (v) the Notes to the Consolidated Financial Statements. |
| 104 | Cover Page Interactive Data File (formatted in iXBRL and contained in Exhibit 101) |
** Furnished herewith
† Certain portions of this exhibit have been omitted pursuant to Items 601(a)(5) and 601(b)(10)(iv) of Regulation S-K. Information in this exhibit that has been omitted has been noted in this document with a placeholder identified by the mark “[***]”. The Company hereby agrees to furnish a copy of any omitted schedules or exhibits to the SEC upon request.”
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
READING INTERNATIONAL, INC.
Date: November 14, 2025
By: /s/ Ellen M. Cotter
Ellen M. Cotter
President and Chief Executive Officer
Date: November 14, 2025
By: /s/ Gilbert Avanes
Gilbert Avanes
Executive Vice President, Chief Financial Officer and Treasurer
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