This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk01: Second quarter 2023 Conference School. Thank you for joining Reading International's Earnings School to discuss our 2023 second quarter results. My name is Andrzej Mataczynski and I am Reading's Executive Vice President of Global Operations. With me are Ellen Cotter, our President and Chief Executive Officer, and Gilbert Havanez, our Executive Vice President, Chief Financial Officer and Treasurer. Before we begin the substance of the call, as usual, I'll run through the caveats. In accordance with the safe harbor provision of the Private Securities Litigation Reform Act of 1995, Certain matters that will be addressed in this earnings call may constitute forward-looking statements. Such statements are subject to risks, uncertainties and other factors that may cause our actual performance to be materially different from the performance indicated or implied by such statements. Such risk factors are clearly set out in our SEC filings. We undertake no obligation to publicly update or revise any forward-looking statements. In addition, we will discuss non-GAAP financial measures on this call. Reconciliations and definitions of non-GAAP financial measures, which are segment operating income, EBITDA and adjusted EBITDA, are included in our recently issued 2023 second quarter earnings release on the company's website. We have adjusted where applicable the EBITDA items we believe to be external to our business and not reflective of our costs of doing business or results of operations. Such costs include legal expenses relating to extraordinary litigation and any other items that we can consider to be non-recurring in accordance with the two-year SEC requirement for determining whether an item is non-recurring, infrequent or unusual in nature. We believe adjusted EBITDA is an important supplemental measure of our performance. In today's call, we also use an industry accepted financial measure called theatre level cash flow, TLCF, which is theatre level revenue, less direct theatre level expenses. ATP, average ticket price, is also used as an accepted industry acronym. We will also use a measure referred to as F&B spent per patron, SPP, which is a key performance indicator for our cinemas. The F&B SPP is calculated by dividing a cinema's revenues generated by food and beverage sales by the number of admissions at that cinema. Please note that our comments are necessarily summary in nature, and anything we say is qualified by the more detailed disclosure set forth in our Form 10Q and other filings with the US Securities and Exchange Commission. So with that behind us, I'll turn it over to Ellen, who will review our 2023 second quarter results and discuss our business strategy going forward followed by Gilbert, who will provide a more detailed financial review. Ellen, over to you.
spk00: Thanks, Andre, and thank you everyone for listening to the call today. We were very pleased with our second quarter 2023 operational results, which continued to move Reading in the right direction. At $65.1 million, our second quarter global total revenue represented the highest global total revenue since Q4 2019 and 85% of our Q2 2019 global total revenue. We delivered this result despite a weakening by 6.5% and 4.8% of the Australian dollar and New Zealand dollar average exchange rates, respectively, against the US dollar. The foreign exchange needs to be kept in mind when reviewing our results, as almost half of our total revenue is generated in Australia and New Zealand. Our Q2 global operating income of $1.8 million represented the highest global operating income since Q4 2019 and improved by over 200% compared to Q2 2022. Thanks to a stronger foam slate, including the phenomenal success of Super Mario Bros., franchises such as Guardians of the Galaxy, Spider-Man, Fast and Furious, and Transformers, and the Disney hit Little Mermaid, Coupled with a strong operational performance from our cinema management teams, our global cinema revenue topped $61.1 million. While our second quarter 2023 global cinema revenue decreased by 1% compared to the second quarter 2022, it did represent 84% of 2019's second quarter global cinema revenue. I'll note the Q2 last year represented the all time highest cinema revenue ever for Australian circuit. And at that time, the Australian dollar was trading at a level of 6.9% higher than at the end of the most recent quarter. Our real estate business is also getting stronger. Our second quarter benefited from the rental stream from our new tenant at 44 Union Square, Petco, which on June 1st of 2023 opened its flagship retail location in New York City, a uniquely designed one-stop health and wellness destination for pets. The strong performance of our live theaters in New York City, which delivered the best theater-level cash flow since Q3 2019, when we also had the Royal George Open. and the continued solid and steady performance of our 72 third-party tenant real estate portfolio in Australia. Our Q2 2023 real estate revenue of $4 million represented a 46% increase compared to Q2 last year, an 8% improvement compared to the same period in 2019, and the highest since Q4 2019 when we still had the Auburn Red Yard and Royal George assets in our portfolio. Our Q2 2023 real estate operating income of $1.3 million represented an increase of over 1,500% compared to the same period in 2022, and 95% of Q2 2019's operating income, despite our having sold five properties in order to mitigate the pandemic impacts. Delivery of this continued improving operational performance resulting in a $6.7 million of adjusted EBITDA came despite headwinds facing our company from inflationary cost pressures, supply chain and labor challenges, and the weakening of the Australian and New Zealand dollars against the U.S. dollar. As of June 30, 2023, we reported cash and cash equivalents of $15.5 million and had a global debt balance of $213.8 million, which excluded deferred cinema rent obligations that arose due to the pandemic and is also lower than our December 31, 2022 debt balance of $215.6 million. We're mindful of our upcoming 2023 and 2024 debt maturities, the current high interest rate lending environment, and the need to improve our liquidity and strengthen our balance sheet. So in an effort to protect the interest of our stockholders and ensure the long-term viability of our company, our board has decided to put certain additional assets up for sale, which I'll touch on in more detail later in the call. With that, let's look more closely at our global cinema business, which has provided the foundational cash flow to support our asset growth over the last few decades. We saw our cinema audiences return to the big screen again when the content was compelling and the marketing was right. The global cinema industry witnessed the sensational April 5th release of the Super Mario Brothers movie, which has grossed almost $1.4 billion globally and is now the second highest grossing animated film of all time. And the strong box office performance of Guardians of the Galaxy Volume 3, which has grossed over $845 million globally. Fast X, which has grossed almost $705 million globally. And Spider-Man Across the Spider-Verse, which has a global gross of almost $684 million globally. In Q2 2023, our global cinema revenue of $61.1 million decreased slightly by 1% from Q2 2022, when our Australian circuit delivered its highest ever quarterly cinema revenue, and at a time when the Australian dollar was 6.9% higher than it was at the end of the 2023 quarter. It also represented 84% of our Q2 2019 global cinema revenue. Our Q2 2023 global cinema operating income improved by 30% to $4.5 million compared to the second quarter of 22 and also marks the highest operating income since the fourth quarter of 2019. During the second quarter of 2023, our operational teams continue to deliver milestone achievements in terms of average ticket price and F&B SPP. with all-time second quarter records set for each of these metrics in each country, with the exception of the U.S. F&B SPP, which ranked as the second highest second quarter SPP ever. We anticipate our second quarter to be followed by a strong third quarter, led by the blockbuster success of Barbie and Oppenheimer, both of which opened on July 21st, thereby creating the double feature sensation, Barbenheimer. Both films opened to a massive box office, making Barbenheimer opening weekend the fourth biggest box office weekend of all time and the largest since April of 2019. Today, Oppenheimer has grossed $651 million worldwide, and Barbie has crossed the billion-dollar threshold in global box office, grossing about $1.2 billion, and has become the highest-grossing film in the Warner Bros. history at the domestic box office, with a domestic box office gross of $537.4 million. Recently, the iconic filmmaker Francis Ford Coppola shared his thoughts on Oppenheimer. He said, the fact that people are filling big theaters to see them and that they are neither sequels nor prequels, no number attached to them, meaning they are true one-offs, is a victory for cinema. And he said, my hunch is that we're on the verge of a golden age, wonderful and illuminating cinema seen in large theaters. Clearly, due to the success of Barbenheimer, the third quarter is off to a great start. In July 2023, our global circuit delivered the highest monthly total cinema revenue ever and the second highest ever global total box office revenue behind July of 2018. The upcoming movie slate for the remainder of the year also gives us confidence that we'll continue to build on this box office momentum. Later this month, audiences will be treated to the release of Gran Turismo, Blue Beetle from DC Comics, and The Hilarious Strays. In September, we have a diverse mix of titles that will attract audiences of all ages, from Denzel Washington in Equalizer 3 to Expendables 4, My Big Fat Greek Wedding 3, The Nun 2, and Paw Patrol the Mighty Movie. And for the holiday season, we'll have the release of The Marvels, Wish from Disney Animation, Migration from Illumination, Dune Part 2, Hunger Games The Ballad of Songbirds and Snakes, Wonka, and DC Comics Aquaman and the Lost Kingdom. We're monitoring the developments related to the ongoing WGA and SAG-AFTRA strikes and are hopeful that both strikes get resolved in the next few months. Today, the strikes have, with the exception of certain independent productions, halted all film production from the studios and major streamers, and it prevented any acting talent from promoting any SAG-AFTRA certified films. While some movies have been moved off the schedule due to the strikes, as of today, we don't currently anticipate that those moves will have a material impact on our performance. but that could change if more significant movies start to move out of Q4 2023. Though even if the releases are delayed, we believe that this will really only be a timing issue. Despite the Hollywood strikes, the box office success we've enjoyed over the last month or so reinforces our long-term confidence in the business and our belief that the major studios and some major streamers will continue to stand behind the exclusive theatrical window. Now let's turn to our US cinema division, which delivered a solid Q2 2023 performance. The US cinema revenue increased by 12% to $34 million compared to the second quarter of 22. It was the best revenue performance since Q4 of 2019. The US cinema operating income at $814,000 improved by over 140% to Q2 compared to Q2 2022. Due to the increase in the number of wide release films and an improvement in the overall quality of the Q2 2023 movie slate, we increased our attendance in the US by 6% and our overall theater level cash flow was the highest it's been since Q4 of 2019. Our US circuit achieved a few notable milestones during the second quarter. At $12.95, our average ticket price was the highest second quarter ever. This level has been set despite the quarter being the first full quarter to feature our successful Half Price Tuesday and Mahalo Day Discount Days programs in all of our cinemas, except for one. And it was the first full second quarter of our free-to-join Angelica membership program, which launched in the second quarter of 2022 and now has almost 90,000 members in nine theaters or 55 screens. At $8.11, our F&B SPP was the second highest second quarter of all time. Again, impressive in light of the rollout of our discount days and the Angelica membership program. Note also, as of today, we're operating in the U.S. with liquor licenses in 100% of our theaters. Our quarterly ancillary revenue generated primarily from theater rentals and online service fees is the highest we've ever delivered. Our US specialty cinemas continue to show signs of recovery during the quarter. Our Q2 box office at the Angelica in New York City this year increased by 165% compared to the Q2 of 2022. The release of Wes Anderson's Asteroid City on June 23 drove audiences back to our specialty cinemas. Over the course of seven days, Asteroid City set an opening weekend and an opening week box office record at the Angelica in New York, surpassing records that had previously stood for over five and six years, respectively. Another movie that's grossed almost half a million dollars in its run at the Angelica in New York and had an opening week of just under $130,000 is the critically acclaimed Past Lives. Today, the Angelica New York still has the highest grossing engagement in North America. Over the past 18 months, we've reviewed our portfolio to maximize profitability and took steps to close two additional cinemas after removing our equipment. With these closures, which make three US cinema closures in total, we will improve the overall profitability of our circuit. Now let's turn to our international cinema divisions. Our Australian circuit also delivered an encouraging Q2 2023 performance. even though its comparison to Q2 2022 is tough because the 2022 quarter delivered the highest total cinema revenue ever in our Australian circuit's history, thanks to movies that overperformed in Australia like Top Gun Maverick, Jurassic World Dominion, Doctor Strange, Minions, and Elvis. The Australian cinema revenue at $22.9 million decreased by 14% compared to Q2 2022, which again was the best total cinema revenue quarter on record, but on a constant currency basis represented 93.5% of the Q2 2019 Australian total cinema revenues and was the second best revenue quarter on record since Q4 2019 after that second quarter 2022. The Australian cinema operating income at $3 million decreased by 38% compared to the second quarter of 2022. Our Australian circuit also achieved a few notable milestones during the second quarter. At $14.05, which is in Australian dollars, our Q2 2023 ATP in Australia was the highest second quarter ever. At $7.48, that's Australian dollars, our F&B SPP was the highest second quarter of all time. And our Australian F&B online sales continue to grow, achieving 8.7% of total F&B sales in Australia, up from 6.1% in the second quarter of 2022. Throughout the quarter, we continue to develop our new pipeline of cinemas in Australia. On August 24th, 2023, we're thrilled to be opening our beautiful new eight-screen Angelica Film Center at South City Square in Brisbane. And we'll open Reading Cinemas with Titan Lux at Busselton in Western Australia before the end of the year. We also achieved the signing of a heads of agreement on another deal for a brand new Reading Cinema with Titan Lux in Noosa in Queensland. Turning to New Zealand, the New Zealand cinema revenue at $4.1 million, our Q2 2023 revenues decreased by 11% compared to the second quarter of 22. At $700,000, our Q2 2023 operating income in New Zealand was relatively flat, increasing by $20,000 compared to the second quarter last year. Our New Zealand circuit also achieved a few notable milestones during the second quarter. Our Q2 2023 ATP of $12.37, which is in New Zealand dollars, was the highest second quarter of all time and the second highest quarter ever. At $6.88, which is in New Zealand dollars, our F&B SPP was the highest second quarter of all time and the second highest quarter ever. And our New Zealand F&B online sales continue to grow, achieving 7% of total F&B sales in New Zealand, up from 5.8% in the second quarter of 22. In an effort to streamline our circuit and retain only cash-positive cinemas, in May of 23, we permanently closed the Hutt pop-up cinema outside of Wellington in New Zealand. but we also signed a heads of agreement for a new state-of-the-art Reading Cinema in New Zealand. Now, let's turn to our global real estate business. Our company's ability to remain viable during the COVID-19 pandemic was largely attributed to our resilient dual and diversified business strategy. When our cinema operations faced a decline in cash flows, our real estate operations remained strong. As we navigate a post-pandemic world with a real estate business that's growing stronger, our focus will be on delivering long-term value for our stockholders through a disciplined approach to improving and developing our real estate investment and operating properties. Our second quarter 2023 global real estate revenue increased 29% to $5.2 million compared to the second quarter of 2022. and our second quarter 2023 operating income of $1.3 million improved from the second quarter of 22 by more than 1500%. The improved second quarter 2023 real estate operating results are due to the new Petco lease at our 44 Union Square property, which rent commenced in the fourth quarter of 22. increased attendance at our live theaters, as well as licensing revenue during this period generated by the Empire Strips Back at our Orpheum Theater, and the steady performance of our Australian real estate portfolio. As a result, our real estate business achieved the highest quarterly real estate revenue and operating income since the fourth and third quarters of 2019, respectively. In the U.S., our second quarter 2023 real estate revenue increased by $1.2 million or 214% to $1.8 million, primarily due to the Petco rent and licensing revenue from our live theaters in New York City. Our Australian real estate revenue for the second quarter decreased slightly by $61,000 to $3 million compared to the second quarter last year. And in New Zealand, our second quarter 2023 real estate revenue remained relatively flat at $392,000. However, when measured in local currency, our Australian real estate revenue for the second quarter increased by about $205,000, and the New Zealand real estate revenue for the second quarter of 2023 increased by almost $25,000 New Zealand dollars. I'm focusing on the New Zealand and Australian real estate portfolio. At June 30, 2023, we had 75 third-party tenants in our combined Australian and New Zealand real estate portfolio. We had a total third-party occupancy rate of 95%. We successfully executed four new leases, three new leases and one lease renewal. And the total third-party tenant sales from our Australian real estate for the quarter was over $28 million. Turning to our asset monetizations. To support our liquidity needs, we made the decision to list the following assets for sale. our office building in culver city california following the advice of newmark our exclusive listing agent we listed the building for 20 million dollars to date newmark has received almost 50 non-disclosure agreements our 26 acre industrial site in williamsport pennsylvania our broker cbre has engaged in sale discussions with multiple parties at this point And last, our building and property in Maitland, New South Wales in Australia. We've engaged an exclusive listing agent, JLL, and they're discussing this potential investment with multiple parties. Also, as we reported in the queue and in the earnings release, we're also exploring the sale in whole or in part of the Cinema 1, 2, and 3 property in New York City or otherwise reducing our interest in the property. I'll finish by noting that as we continue to strengthen our foundation and regain our footing in our cinema divisions, we're confident about the potential of our retained real estate assets. We have a diverse portfolio of properties, including 44 Union Square and two live theaters in New York City, and our Viaduct properties in Philadelphia, as well as assets in Wellington, New Zealand, and our Australian assets, New Market Village in Brisbane, Cannon Park in Townsville, and the Belmont Common in Perth. These assets will continue to provide us with substantial opportunities to create long-term value for our stockholders through either a redevelopment, financing, or potential sales. So that wraps up my business overview for the second quarter of 2023. I'll turn it over to Gilbert.
spk02: Thank you, Ellen. Consolidated revenues for the quarter ended June 30, 2023 increased slightly by 0.5 million to 65.1 million when compared to Q2 2022. This increase was primarily driven by an increase in real estate revenue which was due to receiving rent from our 44 Union Square tenant that did not occur in the same period of the prior year. Partially offset by a decreased attendance in our Australia and New Zealand circuit as a result of record quarterly attendance in Q2 2022. Consolidated revenues for the six months ended June 30, 2022, 2023 increased by 6.1 million to 110.9 million when compared to the same period in the prior year as a result of the rent revenue received from our 44 Union Square tenant, Petco, and increased attendance in our U.S. circuit. Net loss attributable to Reading International for the quarter ended June 30, 2023 increased by 0.3 million to a net loss of 2.8 million when compared to the same period in the prior year. basic loss per share increase one cents to a basic loss per share of 12 cents for the quarter end of June 30, 2023, compared to the quarter end of June 30, 2022. These results are due to decrease in other income and increased interest expense partially offset by better segment results. Net loss attributable to Redding international for the six months ended June 30, 2023 decreased by 3.9 million to a loss of 13.9 million when compared to the same period in 2022. Basic loss per share was 63 cents for the six months ended June 30, 2023 compared to a basic loss per share of 81 cents for the six months ended June 30, 2022. This was due to increased attendance in our U.S. cinema circuit as more patrons returned to the theaters. The rent revenue received from our 44 Union Square tenant Petco during the first six months of the year that did not yet occur in 2022. Impairment expenses that were incurred in 2022 that were not incurred in 2023. and decrease in depreciation and amortization due to delay in our capital spending. Our total company depreciation and amortization impairment and GNA expenses for the quarter ended June 30, 2023 decreased by 3.3 million to 9.8 million compared to the same quarter in prior year. Depreciation, amortization, impairment, and GNA expenses for the six months ended June 30, 2023 decreased by 4.8 million to 19.6 million compared to the same period in prior year. These decreases are due to impairment expenses that were incurred in 2022 that did not reoccur in 2023, decreasing depreciation and amortization due to delay in capital spending. For the second quarter 2023, income tax expense decreased by 1.6 million to an income tax benefit of 0.1 million compared to the equivalent prior year period. For the six months under June 30, 2023, income tax expense decreased by 1.7 million to income tax benefit of 0.6 million compared to the equivalent prior year period. The change between 2023 and 2022 It's primarily due to a decrease in both reserves for unrecognized tax benefit and reserves for valuation allowance in 2023. For the second quarter of 2023, our adjusted EBITDA decreased by 1 million compared to the same prior year period to 6.7 million. This decrease was primarily the result of weakened cinema operations performance in our Australian and New Zealand circuit and a 1.5 million increase in interest expense. For the six months ended June 30, 2023, our adjusted EBITDA increased by 3.2 million to 3.8 million compared to the same prior year period. This increase is due to improved net income loss as a result of increased real estate rental income due to rent from our PEDCO tenant, which was not incurred in the same time period in the prior year compared to the first six months of 2023. Shifting to cash flow, for the six months ended June 30, 2023, net cash used in operating activity decreased by 8.7 million to a net cash used of 8.8 million when compared to the same prior year period. This was driven by an improved cinema operating performance compared to the prior year period recognition of rental income from our tenant at 44 Union Square property, which did not occur in the same period of prior year, and an increase in net operating assets and liabilities. Cash used in investing activities for the six months ended June 30, 2023 was 3.4 million, a decrease of 0.3 million compared to the same period of the prior year. Cash used in financing activities for the six months ended June 30, 2023 decreased by $3.5 million, $2.7 million due to borrowing on an existing facility. Turning now to our financial position, our total assets on June 30, 2023 were $552.2 million compared to $587.1 million on December 31, 2022. This decrease was driven by a 14.4 million decrease in cash and cash equivalents for which we funded our ongoing business operations. As of June 30, 2023, our total outstanding borrowings were 213.8 million compared to 215.6 million on December 31, 2022. Our cash and cash equivalent as of June 30, 2023, were 15.5 million, which includes approximately 8.9 million in US, 6 million in Australia, and 0.6 million in New Zealand. Further to address liquidity pressure on our business, we are working with our lenders to restructure certain debt facilities, and we have selected certain real estate assets for the potential monetization and have listed them for sale. In Q1, 2023, we modified Our Bank of America loan extending the maturity date of the facility to September 4, 2024, and in May 2023, our required monthly repayment of $725,000 commenced. And our CINEMAS 1-2-3 term loan extended on June 28, 2023 from July 3, 2023 to October 3, 2023 to allow additional time to complete the refinancing with that lender. In August 2023, we modified our revolving corporate market loan facility with NAB with certain covenants and extended this facility maturity date to July 31st, 2025 to continue to maintain the debt as non-current. We have begun active process to monetize certain assets as we monitor the cinema market conditions. As we continue to focus on preserving our liquidity, no shares were purchased during the quarter end of June 30, 2023, and our stock repurchase program has and will likely continue to take a lower capital allocation priority for the foreseeable future. With that, I will now turn it over to Andre.
spk01: Thanks, Gilbert. Firstly, I'd like to thank our stockholders for forwarding questions to our investor relations email. In addition to addressing many of your questions in the prepared remarks from Ellen and Gilbert, we've selected a few additional questions to offer some additional insights from management. The first question. You say your viaduct and adjacent parcels will be a focus in 2023. Recently, Reading's ownership of these properties has been the subject of media attention in Philadelphia. What are Reading plans for these fully properties at or near the viaduct and rail park? Ellen?
spk00: As you know, our company owns the Reading Viaduct, which is an elevated rail track in Philadelphia, which some city and neighborhood leaders would like to convert into an extension of the small existing rail park adjacent to our property. Over the last few years, we've had discussions with various civic leaders about how we can work together with the City of Philadelphia and the communities surrounding the Redding Viaduct to achieve a positive outcome for Philadelphia and for our stockholders. Our consistent position has been that any outcome must protect the stockholders of Redding and ensure that we're receiving fair value for our assets. Right now, those discussions are ongoing. Relatedly, we understand that when it returns from its summer recess, the City Council will consider a proposed ordinance that would authorize the city's administration to acquire, in whole or in part, our interest in the viaduct for fair market value.
spk01: Thanks, Ellen. The next question regarding our rent obligations. Are deferred rent obligations down to only $2 million? I seem to think a far higher amount was mentioned only a quarter or two ago. What is the timing for cash payoff of these amounts? Gilbert, can you handle that?
spk02: On June 30, 2023, balance sheet contained accrual rent liability for approximately 9.5 million, which includes amounts owed under deferred deal executed by us during the pandemic, but also includes accruals for amounts that are either being currently negotiated or are under dispute with certain landlords. However, despite these negotiations and disputes, accounting rules require us to accrue for the full rent amount pursuant to the original lease. Included within the $9.5 million and separately reported in our 10-Q in the financial footnotes, the $2 million figure reflects any accrual third-party rent expense arising out of signed pandemic deferral deals that are owed more than 12 months from the date of our balance sheet. Those particular obligations which deferring due dates could extend out up to 48 months from today.
spk01: Thank you, Gilbert. Turning to some of our renovations. When will Dallas Angelica, Rouse Hill, and the Palms start their renovations? And will they need to close completely, or how many auditoriums will be down at a time? About how much is budgeted for cash costs on these renovations? Ellen, we'll leave that for you.
spk00: All right, starting with the Angelica Dallas. We're starting our renovation during the fourth quarter of 23, and And we'll convert certain auditoriums to recliner seating, elevate the food and beverage offer, renovate the lobby, and create a bookstore. At this time, we anticipate that partial closures through the renovation period will occur and will never close completely. And we anticipate completing the renovation by the first quarter of 24. In Australia, we anticipate starting the renovation for Reading Cinemas in Rouse Hill during the fourth quarter of 23, and the scope will include adding another reclining auditorium, F&B, and lobby upgrades. And like the Angelica in Dallas, the renovations will occur when the theater is substantially opened. In New Zealand, we're still reviewing the timing for the renovation of the Reading Cinemas at the Palms. And with respect to reporting on the budgeted cash costs, we can't report on those precise budgets for the particular locations as the information is confidential with our landlords.
spk01: Thank you, Ellen. Regarding the costly 10.75% Bank of America U.S. Cinema Turn Loan, is Redding's plan to retire this loan via its updated principal pay down schedule or refinance some remaining balance into new, longer-term U.S. Cinema financing? Also, given that the current variable rate on this loan, do you feel refinancing will be at similar, higher or lower interest rate spreads? Gilbert.
spk02: We are closely monitoring how policymakers assess the economy, inflation and the appropriate monetary policy. As you know, certain banks begun announcing rate increases in March 2022. To date, these increases have totaled 525 basis points. As we are operating in a high interest rate environment, we expect refinancing in the near future will likely be at a similar or higher interest rate spread. We are intending to retire this loan following the updated principal pay down schedule. However, to protect the interest of our shareholders and to ensure long-term viability of our company, we will continue to work with our banking partner and explore different financing options.
spk01: Thanks, Gilbert. Our last question regarding investor relations. Investors appreciated the Barbenheimer press release. Hopefully, it is a continuing trend for updating shareholders. As shares remain extremely undervalued and haven't participated in the recent run-up of other cinema stalks, Is the company going to do more roadshows? Is there a way to get sell-side coverage? We need to reach more investors with the company's story. I'll handle that one. Now that we see ourselves more firmly on the post-COVID path to recovery, we are committed to communicate more frequently with our shareholders and to keep them informed of the progress we are making. In addition to conferences like Gabelli, at which we attended and presented in early June of this year, we are working on several additional initiatives, namely, if achievable, at least two non-deal roadshows before the end of the year, as well as an additional microcrack conference also before year's end. We are also continuing to investigate several different options to provide more analyst coverage for our stock, a process that has been ongoing for some time but has not yet borne fruit. With those remarks, that marks the conclusion of the call. As usual, we appreciate you listening to the call today. Thank you for your attention and we wish everyone good health and safety.
Disclaimer