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Specialty Film Exhibitor Reading International Reports 96% Drop In Q2 Revenue

Dade Hayes

While the blows absorbed by mass-market U.S. exhibitors like AMC and Cinemark during COVID-19 have dominated the headlines, the damage appears to be even more severe on the specialty front.

Reading International, a Culver City, CA-based arthouse and real estate firm, reported a 96% decline in second-quarter revenue on a 100% drop in U.S. movie attendance.

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Shares in Reading, which trade on the Nasdaq, fell nearly 13% Monday to close at $3.88.

The publicly traded company operates about 60 movie theater complexes and three live theaters in the U.S., Australia, and New Zealand. Revenue amounted to just $3.4 million in the period ending June 30, down from $76 million in the year-earlier period. A loss per share of $1.04 reversed a 10-cents-a-share profit in the same period of 2019.

In the U.S., some of Reading’s best-known locations in New York — the Paris Theater, the Beekman and a City Cinemas multiplex on 86th Street — went dark or changed hands even before the pandemic. After Reading exited the lease for the Paris, an iconic, single-screen house on 58th Street by the Plaza Hotel, Netflix stepped in to lease it as a planned site for the streaming giant’s own events and screenings.

Reading’s theaters also include the Angelika Film Center, a well-established arthouse circuit. After the 1989 opening of the original Angelika in New York, a handful of other Angelika sites in Washington, D.C., Dallas and San Diego have since opened.

“The events surrounding the COVID-19 pandemic underscored the benefits of our geographically diversified, two-prong cinema and real estate strategy,” CEO Ellen Cotter said in the earnings release. “We are grateful to have now re-opened all of our cinemas in New Zealand that were in operation prior to the COVID-19 shutdown and the majority of our Australian cinemas.”

Theaters in New Zealand are operating without social distancing requirements as the island nation continues to make remarkable strides in tackling the coronavirus. The country has gone 100 days since last reporting a local case of COVID-19. About 96% of Reading-owned leased buildings in New Zealand

Reading’s Australian theater portfolio suffered a setback in July, when a resurgence in infections in the country forced theaters to close again, shutting down seven Reading-owned sites.

Warner Bros’ plan to open Tenet internationally this month and domestically on September 3 is expected to boost Reading’s results in the current quarter. The company said it will announce dates for reopening certain locations as local authorities weigh in on lifting restrictions.

“While the near-term operating environment will remain challenging and the path for the full re-opening of our operations in certain jurisdictions we serve remains unclear, we believe the long-term fundamentals of the cinema business and our real estate assets remain intact,” Cotter said.

Reading said it plans to release a recording on Wednesday of executives delivering comments on the second-quarter results and fielding research analysts’ questions.

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