Reading International Inc

Thank you for joining Reading International's earnings call to discuss our 2024 third quarter results. My name is Andrzej Matuszczynski and I am Reading's Executive Vice President of Global Operations. With me as usual are Alan Cotter, our President and Chief Executive Officer, and Gilbert Ibanez, our Executive Vice President, Chief Financial Officer and Treasurer. Before we begin the substance of the call, I will run through the usual caveats. In accordance with the safe harbour provision of the Private Securities Litigation Reform Act of 1995, certain matters that will be addressed in this earnings call may constitute forward-looking statements. Such statements are subject to risks, uncertainties and other factors that may cause our actual performance to be materially different from the performance indicated or implied by such statements. Such risk factors are clearly set out in our SEC filings, and we undertake no obligation to publicly update or revise any forward-looking statements. In addition, we will discuss non-GAAP financial measures on this call. Reconciliations and definitions of non-GAAP financial measures, which are segment operating income, EBITDA and adjusted EBITDA, are included in our recently issued 2024 third quarter earnings release on our company's website. We have adjusted, where applicable, the EBITDA items we believe to be external to our business and not reflective of our costs of doing business or results of operations. Such costs could include legal expenses relating to extraordinary litigation and any other items that we can consider to be non-recurring in accordance with a two-year SEC requirement for determining whether an item is non-recurring, infrequent or unusual in nature. We believe that the adjusted EBITDA is an important supplemental measure of our performance. In today's call, we also use an industry-accepted financial measure called theater-level cash flow, TLCF, which is theater-level revenue less direct theater-level expenses. Average ticket price, ATP, which is calculated by dividing cinema box office revenue by the number of cinema admissions, is also used as an accepted industry acronym. We will also use a measure referred to as food and beverage spend per patron, F&B SPP, which is a key performance indicator for our cinemas. The F&B SPP is calculated by dividing a cinema's revenues generated by food and beverage sales by the number of admissions at that cinema. Please note. that our comments are necessarily summary in nature and anything we say is qualified by the more detailed disclosure set forth in our Form 10Q and other filings with the U.S. Securities and Exchange Commission. So, with that behind us, I'll turn it over to Ellen, who will review our 2024 third quarter results and discuss our business strategy going forward, followed by Gilbert, who will provide a more detailed financial review. Ellen?

Thanks, Andre, and welcome everyone to the call today, and thanks for listening in. Key financial operating metrics for our third quarter 2024, total revenues, operating income, and adjusted EBITDA, were all materially stronger than the previous three quarters from Q4 2023 to Q2 2024. This trajectory of improvement indicates to us that, thankfully, the lingering impacts on our cinema business from the COVID-19 pandemic And the 2023 Hollywood strikes, which particularly impacted the business during the nine-month period from October 23 through June 24, have come to an end. For those of you new to Reading, we're a company in two businesses, cinema and real estate, in three countries, the United States, Australia, and New Zealand. Since over 90% of our revenues today come from our cinema business, these two global macro events presented the most serious challenge for our company. which as a microcap public company was not entitled to one penny of U.S. federal funding through the Shuttered Venue Grant Program or the Payroll Protection Program. At $60.1 million, our third quarter 2024 global total revenue was 28% higher than Q2 2024, 33% higher than Q1 2024, and 33% higher than Q4 2023. While not as high as the third quarter in 2023, our Q3 2024 global total revenue was less than 10% off of last year. This comparative revenue decrease was driven by a 10% reduction in U.S. screen count as we streamline our circuit, a weaker film performance in our U.S. specialty circuit when Oppenheimer, Barbie, and Past Lives overperformed for us, and a weaker industry box office in Australia and New Zealand this quarter versus last year when Barbie, which is now Australia's fifth highest grossing movie of all time, overperformed and was a stronger number one film for the quarter compared to Deadpool and Wolverine. The Australian industry box office in Q3 2024 versus Q3 2023 was off 3%. We reduced our global operating loss to just $246,000. During the previous three quarters, our global operating loss was 4.35 million in Q2 2024, 7.57 million in Q1 2024, and 6.95 million in Q4 2023. Our Q3 2024 adjusted EBITDA of just under $3 million is the first positive adjusted EBITDA over the last three quarters, when our adjusted EBITDA was negative 236,000 in the second quarter of 24, negative $3.88 million in Q1 2024, and negative $2.23 million in Q4 of 2023. At $56.4 million, our Q3 2024 global cinema revenue, again, represented a materially higher level than reported since Q4 2023, despite being behind Q3 2023 by about 10% and representing just under 85% of pre-pandemic Q3 2019 levels. These cinema revenues were driven by Deadpool and Wolverine, which opened on July 26, 2024, and is now the highest-grossing R-rated movie of all time and has earned over $1.3 billion in worldwide grosses. I'll note that Deadpool played proportionally much better in the U.S. than Australia and New Zealand. Despicable Me 4, which opened in early July 2024, now has over $968 million in global box office revenue leading that franchise to over $5.6 billion globally. Franchise reboots, Twisters and Beetlejuice Beetlejuice. Twisters, which opened on July 19, 1924, set the highest opening weekend record for a natural disaster film and has earned almost $371 million globally. Beetlejuice Beetlejuice opened in September and has already earned over $450 million in global box office, to becoming Warner Brothers' highest-grossing domestic film of the year. It Ends With Us, a female-driven picture based on Colleen Hoover's best-selling novel, had a sensational opening in August and has since become the highest-grossing romantic drama since 2018's A Star Is Born, and today has grossed almost $350 million at the global box office. The second quarter holdover of Inside Out 2, which opened on June 14, 2024, is now the highest-grossing animated film of all time, earning almost $1.7 billion worldwide. Even though our third quarter, 24, performance was unfavorable to last quarter, we'll highlight for you a couple standout metrics about our global cinema operations. our Australian Cinema Division delivered impressive operational records in the third quarter of 24. At $37 million Australian dollars, our Australian Cinema Revenue represented the best third quarter performance ever and the second highest reported quarter ever. At $2.9 million Australian dollars, our Australian Cinema Division's operating income marked the second highest third quarter performance since Q4 of 2019 and surpassed by the third quarter of 2023. The FMB SPP for each cinema division was the highest third quarter ever. If you measure when all of our screens were open, or in other words, excluding certain pandemic periods where only certain screens were operational. The box office per screen reported for our U.S. circuit of $80,000 exceeds the box office per U.S. screen reported by certain publicly traded exhibitors for their U.S. segments. Turning to our global real estate division, at $4.9 million, our third quarter 2024 real estate revenue declined slightly by 3% compared to the third quarter last year. However, our global real estate operating income increased 52% to $1.4 million from $920,000 in the third quarter of 23. Let me point out a few standout third quarter 24 real estate division metrics. Driven by the strong and consistent performance of our 73 third-party tenant Australian portfolio, on a local currency basis, our third quarter 24 real estate operating income of $1.6 million is the best third quarter on record. And that result takes into account, among other things, the sale of our Maitland property in New South Wales in the fourth quarter of 23, and the sale of Auburn Red Yard in June of 21, when we had 17 third-party tenants at that center. Our U.S. real estate business, which includes our two live theaters in New York City, achieved its second-highest third-quarter revenue in company history. Supported now by RIM from 44 Union Square, and despite the Orpheum Theater being dark for a period of time during the third quarter. This quarter's operating income represented 94% of the third quarter in 2019, despite the elimination of rental revenue associated with our Culver City office building, which we sold in the first quarter of 2024, and our Maitland property, which we sold in the fourth quarter of 2023. so despite being a bit behind compared to 2023's third quarter results we believe our operations team especially in the cinema division have soldiered on through a very rough nine months from october of 23 through june of 24. in addition to maintaining our operations to bolster our long-term liquidity during the last several months this year we focused on monetizing four select real estate assets which i'll touch on shortly and work with our lenders on various financings to extend maturity dates, which Gilbert will mention later on. All of these efforts and momentum should line us up nicely to be ready for the improvement in the box office expected during the 24 holiday season, 2025 and beyond, and the reduction in interest rates, which we hope will continue into 2025. Now, let's look more closely at our global cinema business which historically has provided the foundational cash flow to support our asset growth. Let me start with a focus on the upcoming 24 holiday movie slate, which completely reinforces our belief in both our cinema operations and the industry in general. Starting November 22nd, 2024, the industry will be treated to an amazing trifecta lineup of quality temples being released with sensational marketing campaigns from Paramount, Disney, and Universal. Gladiator 2. The eagerly awaited action-packed spectacle is expected to open very well. Wicked. If our pre-sales are any indication, we expect this cherished musical adaptation to be one of our strongest titles in 2024. Moana 2. Disney, clearly on a billion-dollar roll this year, has high hopes for Moana 2, and we hope it delivers another billion-dollar release for Disney at the global box office. Moving to December and ending the year, hopefully on a high note, on December 20th, we look forward to Mufasa, The Lion King, and Sonic, The Hedgehog 3, both of which are poised to do very well at the box office. The variety and quality of the upcoming film slate, along with the showcased enthusiasm of moviegoers, keeps us optimistic about the industry's future. It was anticipated the overall box office in 24 would fall short of 23. a year already in recovery but ultimately hampered by strike-induced movie release delays. But while these production delays and the rescheduling of theatrical release dates have led to postponement of several major titles during this year, we believe that 25 looks very promising. Today, there are several more wide titles from Disney alone, as opposed to Searchlight and Fox, on the release schedule compared to 24, Movies such as Captain America, Brave New World, Snow White, Lilo and Stitch, Helio, and Tron Ares. In 25, in addition to those Disney titles, audiences will get James Cameron's highly anticipated Avatar 3, Tom Cruise's Mission Impossible 8, a new Jurassic World film from Universal, James Gunn's Superman from DC Studios for Warner Bros., Dirty Dancing 2, and the SpongeBob movie Search for SquarePants. During the third quarter of 24, despite the challenges we faced, our management teams continued to work a variety of business opportunities to improve our overall business, and which we believe should set us up for better results in 25 and 26. In addition to F&B strategic initiatives, we're working on the launch of a new free-to-join rewards program for our Redding and Consolidated circuits, in addition to a paid subscription program, which we hope to launch in early 25. Now, let's turn to our U.S. cinema division. The U.S. cinema revenue decreased by 19% to $27.8 million compared to the third quarter of 23. And our operating income decreased to an operating loss of $900,000 down from an operating income of $300,000 in the same period in the previous year. The drivers for the U.S. underperformance this quarter were one, As of the third quarter of 24, our U.S.-based screen count decreased by 10% compared to the same quarter in 23. We closed four theaters, two in Hawaii, one in California, one in Texas. Each of these theaters was underperforming, so we expect that the closures in the long term will improve our profitability. Secondly, our New York City specialty theaters, the Angelica New York, Villages, and Cinema 1, 2, and 3, all had much stronger box office in the third quarter of 23 compared Due to Oppenheimer and 70mm projection at the Cinema 1, 2, and 3, and The Villages, there are Barbie grosses and grosses from past lives. Overall, our specialty theaters in general performed better in the third quarter of 23, driven by movies like, as I just mentioned, director Greta Gerwig's Barbie, director Chris Nolan's Oppenheimer, director Wes Anderson's Asteroid City, and the critically acclaimed debut of Past Lives from Director Celine Song. With respect to our U.S. circuit performance versus the industry, our analysis indicates that these U.S. circuit metrics are generally favorable or in line with the industry. One, our box office of about $80,000 per screen, our F&B SPP of $8.24, our total cinema revenue of $144,000 per screen. When you analyze our operating expenses, we need to remember that 36% of our U.S. cinema revenues are generated in Hawaii, 11% are generated in San Diego, and 10% are generated in New York City. Hawaii, New York, and California are generally regarded as among the most expensive states to do business. Our occupancy and labor costs are much higher than other U.S. operating environments. And in Hawaii in particular, Almost every operating expense is more expensive than the mainland. As I mentioned earlier, we're looking forward to rolling out a new free-to-join rewards program in our commercial theaters, which will line up with our free-to-join Angelica membership program. Today, that program has about 145,000 members who account for approximately 25% of all paid attendance for Angelica Cinema's within our U.S. circuit based on year-to-date attendance. We're also developing a paid subscription program for all of our U.S. greens, which we hope to launch in the next few months. In addition, we've examined our F&B pricing and implemented a variety of price increases. But at the same time, we've rolled out a special 2024 weekday deal program where guests seeking the best values can enjoy a different but compelling discount on our F&B menus every day of the week. Now let's turn to our cinemas in Australia and New Zealand. In the third quarter of this year, our Australian cinema revenue increased 2% to $24.7 million versus Q3 2023. And our operating income decreased 17% to $2.9 million versus Q3 2023. In the third quarter of 24, our New Zealand cinema revenues decreased 11% to $3.8 million versus the third quarter of last year, and the operating income decreased 54% to $250,000 versus the third quarter last year. As I mentioned earlier, while Deadpool and Wolverine and Inside Out were strong Q3 films, they were on balance still not as strong for the Australian and New Zealand film industry as Barbie and Oppenheimer. Notable milestones achieved during the third quarter of 24 include the following, all in functional currency. Our Australian total revenues delivered the highest third quarter ever for our Australian cinemas at 37 million Australian dollars. Our Q3 2024 Australian F&B revenues of $16.5 million is the highest third quarter of all time. Our Australian third quarter 2024 F&B SPP result of $7.90 is our highest ever quarterly result. With respect to our New Zealand cinemas, our Q3 2024 F&B SPP of $6.62 was the highest third quarter ever. Our Q3 2024 screen advertising revenue in Australia was the highest third quarter ever, driven in part by the rollout of another circuit-wide click-to-pay promotional program with MasterCard. And we officially launched Angelica Rewards at the State Theatre in Tasmania this quarter. The new loyalty program is modeled off of our successful Angelica Rewards program at the Angelica in South City Square, Brisbane. Now, let's turn to our global real estate business. I mentioned earlier the results of our global real estate operations compared to the third quarter of last year. Our Q3 2024 global real estate total revenues of $4.9 million dipped by 3%, while our total operating income of $1.4 million increased by 52%. Since our intercompany rents are reflected in our segment reporting, The recent decline in certain real estate metrics reflects the loss of rental income from the Q4 2023 sale of our Maitland property in New South Wales, Australia, and the Q1 2024 sale of our Culver City office building for $10 million. In the third quarter of this year, our live theaters reported a 16% decline in revenues compared to the same period in 2023. due to the Orpheum being dark in the early months of the third quarter. In mid-September 24, the Orpheum opened the Big Gay Jamboree, which we expect to run through the end of 24. Audible, the Amazon company, continued to operate at our Minetta Lane Theater, and in the third quarter of 2024, hosted the show I'm Almost There, Todd Ullman, and is now playing Strategic Love Play. Recall that in April of 24, we renewed the license agreement with Audible through March 15th of 26 with a one-year extension. Turning to our real estate assets in the U.S. To manage the remaining leasing at 44 Union Square in New York, we engaged George Comfort & Sons earlier in 24. Over the past few months, George Comfort has worked with non-office users for the remaining 43,000 square foot space. We've been working on one deal in particular that we believe has an interesting use that will be compelling in the Union Square area. However, we'll note that when we finished construction of the building at the start of the pandemic in 2020, while we're clearly disappointed with the market conditions since that time, we believe that the market in general in the Union Square area showing signs of improvement and we hope that this key Union Square anchor space will attract a strong credit-worthy tenant over the next six months. As mentioned earlier, our company's key short-term priority is to lower our interest expense by reducing our debt. Our board directed management to assess our global real estate portfolio to identify assets that can be sold to generate liquidity to pay down debt over the next few years. This strategy will help us manage our financial obligations while we await a full recovery in the global cinema industry. In the U.S., we've been advancing sales efforts on our Newberry Yard asset in Williamsport, Pennsylvania. We recently resolved some necessary rail track easement issues and are engaging with certain parties about a purchase of the now 24-acre site. One of our stockholders asked about the appraised value of Newberry Yard. We don't report on the appraised or fair market values of our properties. However, we'll note that the appraised value of this particular asset is well in excess of what we reported as the historic book value of Newberry Yard. Also recall that there's no mortgage on this or any of our real assets. Now, turning to our international real estate assets. Our third quarter 2024 Australian real estate revenue slightly increased to 3.4%. and our New Zealand real estate revenue of $372,000 slightly decreased compared to the third quarter of last year. As of September 30, 24, we had 76 third-party tenants in our combined Australian and New Zealand real estate portfolio. Our combined third-party tenant sales for the quarter from Australian real estate was $30.8 million Australian dollars. Our third-party occupancy rate remained strong at 96%. During the quarter, we executed one new lease and two lease renewals. Today, with respect to our international assets, we're marketing for sale our Cannon Park assets in Townsville, Australia, as well as our Rotorua property and five contiguous parcels in Wellington, New Zealand. We've been working with various groups on these Australian and New Zealand assets. Our sales processes for each of these asset sales is ongoing as we're working with various groups on these Australian and New Zealand assets. In order to preserve the confidentiality of our ongoing negotiations, we don't intend to provide any updates until definitive sales documentation is executed and delivered. Note, however, that there are no assurances that any acceptable transaction will be forthcoming with respect to any of these properties. Throughout 2024, we've worked with our lenders and landlords to secure financial relief and initiated another round of asset sales. These steps will help us navigate through the remainder of 24 and lay a stronger foundation for 25 and beyond when we expect the global box office and cinema industry to be on a much brighter path. That wraps it up for me. I'll turn it over to Gilbert.

Thank you, Ellen. Consolidated revenue for the quarter ended September 30, 2024 decreased by $6.5 million to $60.1 million when compared to the third quarter of 2023. Consolidated revenue for the nine months ended September 30, 2024 decreased by 25.5 million to 152 million when compared to the nine months that September 30, 2023. These decreases are attributable to lower attendance in all three countries as a result of closing cinemas in the US, along with lower performing titles for our theaters in the third quarter of 2024 compared to 2023. slightly decreases in property rent revenue and lower u.s live theater revenue net loss attributable to reading international inc for the quarter end at september 30 2024 was 6.9 million compared to a loss of 4.4 million in q3 2023 a 2.5 million loss increased basic loss per share increased by 11 cents to a loss of 31 cents compared to a loss of 20 cents for Q3, 2023. These results were primarily due to weakened cinema performance, increased interest expense, reduced property rent revenue, partially offset by reduced depreciation and G&A expenses. Net loss attributable to Reading International Inc for the nine months ended September 30, 2024 increased by 11.2 million to a loss of 29.5 million from a loss of 18.3 million when compared to a nine months ended September 30, 2023. Basic loss per share increased by 50 cents to a loss of $1.32 compared to a loss of 82 cents for the nine months of 2023. These results were primarily due to decreased cinema segment result, increased interest expense, and a loss of sales of our Culver City office building, partially offset by reduced depreciation. Our total company depreciation amortization impairment and G&A expense for the quarter ended September 30, 2024 decreased by 1.1 million to 8.9 million compared to Q3, 2023. For the nine months ended September 30, 2024, it decreased by 1.8 million to 27.8 million compared to the nine months ended September 30, 2023. These decreases were due to decreases in depreciation and amortization as a result of the sale of our Maitland and Culver City property and no depreciation on our help for sale property along with decreases in G and A expenses. Income tax expense for the quarter ended September 30, 2024 decreased by 0.2 million compared to Q3, 2023. The change between 24 and 23 is primarily related to an increase in pre-tax loss in 2024. Income tax expense for the nine months ended September 30, 2024 increased by 0.01 million compared to the nine months ended September 30, 2023. The change between 24 and 23 is primarily related to an increase in unrecognized tax benefit in 24, partially offset by an increase in pre-tax loss in 2024. For the third quarter of 2024, our adjusted EBITDA income decreased by 3.2 million to an income of 2.9 million from an income of 6.1 million in Q3 2023. For the nine months ended September 30, 2024, we have an adjusted EBITDA loss of 1.3 million compared to an EBITDA income of 10 million for the nine months ended September 30, 2023. These results were primarily the result of the weakened cinema and real estate performance as mentioned previously. Shifting to cash flow for the nine months ended September 30, 2024, net cash used in operating activity increased by 5.4 million to 11.8 million compared to the cash used in nine months ended September 30, 2023 of 6.4 million. This was primarily driven by an increase in net loss and offset by an increase in net payable. Cash provided in investing activities during the nine months ended September 30, 2024 was 5 million compared to cash used in nine months ended September 30, 2023 of 6.2 million. This was primarily due to 9.7 million proceeds from sale of our Culver City office building in February, 2024. Cash provided in financing activity for the nine months ended September 30, 2024 increased by 6 million to 2.1 million compared to the cash used in nine months ended September 30, 2023. This was primarily due to new bridge loan of 13.9 million from NAB on April 10, 2024, and an increase of 3.2 million for our Westpac loan on August 19, 2024. The increase was partially offset by the payoff of citizens' loan of 8.4 million following the sale of the Culver City office building. 4 million scheduled loan repayment to Bank of America and 0.3 million debt repayment to Santander on August 23rd, 2024. Turning now to our financial position, our total assets on September 30, 2024, were $495.7 million compared to $533.1 million on December 31, 2023. This decrease was driven by a $6.1 million decrease in cash and cash equivalent and receivables from which we fund our ongoing business operations, $10 million decrease in operating properties as a result of the sale of a Culver City office, and $11 million decrease in operating lease right of use assets. As of September 30, 2024, our total outstanding borrowings were $215 million compared to $210.3 million on December 31, 2023. Our cash and cash equivalent as of September 30, 2024, were $10.1 million, which includes approximately $3.8 million In the US, 4.9 million in Australia and 1.4 million in New Zealand. Further to address the liquidity pressure on our business, we're working with our lenders to amend certain debt facilities and we have selected certain real estate assets for potential monetization and have listed them for sale. During the first quarter of 2024, we completed the monetization of our Culver City LA office building for 10 million and fully discharged the related mortgage. For the third quarter of 2024, we made progress with our lenders on the following financing arrangements. On August 1st, 2024, we extended the maturity of our $8 million loan with Santander Bank, which is secured by our Mineta and Orpheum theaters. That previously matured on June 1st, 2024. The extended facility now matures on June 1, 2025, requires monthly principal and interest payments, $250,000 loan reduction upon signing, and another $250,000 before January 1, 2025, with a balloon payment of the remaining balance on maturity. On August 13, 2024, we increased our Westpac corporate credit facility by New Zealand $5 million to New Zealand $18.8 million. In October, 2024, we extended an amendment to our Bank of America loan to defer the monthly principal payment of 500,000 in October, November and December, 2024 to the end of December, 2024. In October, 2024, we obtained two further six months extension for our loan with Valley National, the first of which we exercised. In connection with these extensions, we have increased our cash deposit with Valley National Bank by $500,000 to $1.5 million. With that, I will now turn it over to Andre.

Thanks, Gilbert. First, I'd like to thank our stockholders for forwarding questions to our investor relations email. As usual, in addition to addressing many of your questions in the prepared remarks from Ellen and Gilbert, we've selected a few additional questions to offer additional insight from management. The first of such questions, how many more auditoriums are planned for additions of recliners? When will the reseating program be completed in 2024 and beyond? Ellen?

In the U.S., we're targeting to convert 23 screens to luxury recliners in three theaters over the next 24 months. If these conversions were completed, that would result in almost 70% of our existing U.S. circuit featuring recliners. We'd also be intending to create a premium screen concept in each of those theaters. In Australia and New Zealand, we're also targeting to convert certain screens to luxury recliners over the next two years. The completion of these CapEx upgrades are subject to successful negotiations with various landlords, the improved movie slate, and obviously a stronger liquidity position. Assuming all goes well in this regard, our global circuit will be in a much better position to take advantage of the improved movie slate expected for 2025 and beyond.

Thanks, Alan. Perhaps you can answer the next one as well. We just wanted to get a better sense of what needs to happen for the company to achieve results in the US, similar to what we saw in second quarter 23 and third quarter 23, being mindful that the screen fleet is 10% smaller. Also, is it possible to quantify the difference from the specialty circuit year on year in third quarter? For the speciality circuit, To produce these results again, is that something that can be done by a collection of good releases, or does there have to be a major one-off release like Oppenheimer driving that performance?

Ellen? First, let me reiterate that despite the reduction in revenues, we believe that the streamlining of our U.S. circuit or the closure of those four theaters will in the long run boost our overall theater-level cash flow, since those theaters historically lost money or broke even. depending on the time period. While the third quarter of 24 was not as strong as we would have liked, we believe we'll have stronger results in the future based on the CapEx improvements that I talked about, which will improve our local market shares, the rollout of that free-to-join rewards and premium membership programs, and the better movie slate expected for 25 and 26 and 27. With respect to the box office for our U.S. specialty circuits, It was off 32% quarter versus quarter, with the Villages and the Cinema 1, 2, and 3 being off over 50% due to the overperformance in 23 of Oppenheimer and 70mm. We believe that the U.S. Specialty Circuit, of course, can produce results like that again. However, it's all totally driven by film product. For instance, so far in the month of November, This year, the Angelica New York box office is up over 80 percent compared to prior period, led by Anora and Real Pain, both of which have performed really well. And the cinema one, two and three is up over 50 percent, led by the movie Conclave, which is perfect for the audience on the Upper East Side.

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

Well, like I've been saying, we anticipate a much stronger movie slate from 2025 and beyond and even the holiday season in 24. And our U.S. circuit, we anticipate, will return to producing acceptable levels of income such that the U.S. circus theater level cash flow will contribute to the overall advancement of our global enterprise again. While we generally believe that the U.S. market is over-screened, we think that following our streamlining efforts, our remaining U.S. leaders will return to income producing in 2025 and beyond. After taking into account not only the improved movie schedule or expected movie schedule, but also the strategic initiatives we have like CapEx upgrades and the rollout of the rewards in the membership program.

Thanks, Ellen. The Santander Mineta and Orpheum Theatre with secured term loan was only extended out a year from its due date and thus less than nine months from now. Do you expect to refinance this loan with Santander or from another source? How much of a further increase in interest rate is expected to result from the refinancing term sheets you are pursuing? Gilbert.

Despite our good relationship with our lenders, we are Exploring our options with different lenders to make sure it is in the company and our shareholders' best interest and matches our financing needs. We're closely monitoring how policy makers assess the economy, inflation, and the appropriate monetary policy. As we shared previously, the Fed has recently had two rate cuts, 50 basis point in September and 25 basis point in November 2024. Because of that, we are optimistic that the interest rates will be trending downwards. We will work with lenders that provide us with most flexibility, not just in terms of interest rate floors to ensure we reduce our interest rates into the future, but also take into account the fees and covenant, which will impact the overall interest expense to Reading.

Thanks, Gilbert. And the last question. What are your plans and sources of capital for the $5.9 million purchase price due in two weeks, the end of November 24, to related parties Sutton Hill for the Village East ground lease? Well, I can handle that one. We're working on a transaction to complete the acquisition of the remaining New York City property, the tenants' interest in the Village East ground lease, as envisioned by the master lease deal that was entered into with Sutton Hill Capital well over 20 years ago. That master lease transaction with Sutton Hill brought us our interest in 44 Union Square, the Cinemas 1, 2 and 3, the Minetta Lane and Orpheum Theatres. Acting under the direction of our Audit and Conflicts Committee, our CFO and our General Counsel are working to develop and close a mutually agreeable transaction with the non-CODA partner of Sunhill. While no assurances can be given, we anticipate that the Conflicts Committee will be able to report on the deal during our Q4 reporting period. And with that, we'll bring the conference call to an end here. As usual, we appreciate all of you with your questions and listening to this conference call and wish you all the best for the future. Thank you.