Reading International 2025 Q3 Earnings Call - Strategic Focus Drives Profitability Despite Weaker Box Office

Andrzej Matyczynski, Executive Vice President of Global Operations, Reading International: Thank you for joining Reading International’s earnings call to discuss our 2025 third-quarter results. My name is Andrzej Matyczynski, and I am Reading’s Executive Vice President of Global Operations. With me are Ellen Cotter, our President and Chief Executive Officer, and Gilbert Avanes, our Executive Vice President, Chief Financial Officer, and Treasurer. Before we begin the substance of the call, I will run through the usual caveats. In accordance with the Safe 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 2025 third-quarter earnings release released on November 14 on our company’s website. We have adjusted where applicable that EBITDA items will be linked to the 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 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 that 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 also use a measure referred to as Food and Beverage Spend per Patron, FMBSBP, which is a key performance indicator for our cinemas. The FMBSBP 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 exposure set forth in our Form 10-Q and other filings with the U.S. Securities and Exchange Commission.

With that behind us, I’ll turn it over to Ellen, who will review our 2025 third-quarter results and discuss our business strategy going forward, followed by Gilbert, who will provide a more detailed financial review. Ellen.

Ellen Cotter, President and Chief Executive Officer, Reading International: Thank you, Andrzej, and welcome everyone to the call today. As we expected, and following global cinema industry trends, despite the strong performance of certain titles through the third quarter of 2025, the overall box office was behind last year’s third quarter. At $52.2 million, our global total revenue decreased 13% versus Q3 2024, which was driven by a slate of 2025 movies that just did not match up to the stronger titles in the same period last year. Last year’s lineup included record-setting releases like Deadpool & Wolverine, Despicable Me 4, Beetlejuice Beetlejuice, and It Ends with Us. Despite this past quarter’s revenue performance, the company continued making progress on several strategic initiatives, which is evident in some of our key income metrics for Q3 2025.

With respect to our global operations, both cinema and real estate, despite the decrease in our cinema revenues, we continue to effectively manage our expenses. At a loss of $329,000, our global operating loss improved by 4%. At $3.6 million, our positive EBITDA increased 26% from Q3 2024’s EBITDA. With this past quarter’s results, we’ve delivered five straight quarters of positive EBITDA. At a loss of $4.2 million, our net loss improved by 41%, representing the best third-quarter result since Q3 2019. Through the quarter and the year in 2025, our operating teams continued to improve the company’s overall profitability. In the U.S., by closing a 14-screen cinema in San Diego in Q2 2025, we eliminated a cash loss, though it resulted in a 7.3% reduction in our U.S. screen count. We have limited control over the quantity and grossing potential of the movies we play.

However, in operational areas where we have more control, like FMB and alternative content programming, we delivered record results that I’ll touch on in a minute. Across the global cinema circuit, we’re working with our landlords to reduce our overall occupancy costs to reflect the fact that attendance has not returned to pre-pandemic levels, and our operating expenses, for the most part, have all increased. Our U.S. real estate division delivered the best third-quarter operating income since Q3 2014, due in part or in large part to our improved performance of our live theater assets in New York City. Despite the elimination of the cash flow generated by the real estate assets sold in early 2025, Cannon Park in Townsville, Australia, and our Wellington assets in New Zealand, our global property teams are driving productive changes in our 58 third-party tenant portfolio, which I’ll touch on shortly.

Those 2025 strategic asset sales have led to a significant debt reduction. From December 31, 2024, we’ve reduced our global debt balance from $202.7 million to $172.6 million, or about 15% as of September 30, 2025. Our interest expense for the nine months ended September 30, 2025, has been reduced by $2.6 million, or 17%, compared to the same period last year. This follows an overall debt reduction of $112.3 million since December of 2020. Historically, about 50% of our revenues have been generated in Australia and New Zealand, and the third quarter 2025 was no different, with 49% of our revenues being generated internationally. In Q3 2025, our quarterly revenue was negatively impacted as the Australian and New Zealand dollar devalued against the US dollar by 2.3% and 3.1% compared to the Q3 in 2024.

As you’ll note from the exchange rate table included in our 10Q, the average exchange rates for these two currencies are at a 20-year low. As I’ll touch on in greater detail in a minute, despite the weak third quarter, we continue to have enthusiasm and confidence about the cinema business. Today, we’re reporting global pre-sales for Wicked for Good of almost $850,000, which is one of the strongest global pre-sale numbers we’ve experienced in years. Wicked for Good is followed by Zootopia 2, Five Nights at Freddy’s, Avatar: Fire and Ash, SpongeBob SquarePants Movie, and Anaconda. In addition to these movies that appeal to the family audience, we believe that Marty’s Supreme, Song Sung Blue, and The Housemaid will give the older audience some compelling choices during the holidays. The 2025 holiday season will be followed by what looks to be a very robust lineup for 2026.

We’re thrilled about the upcoming 2026 film slate, which includes major franchise releases like Spider-Man: Brand New Day, Toy Story 5, The Devil Wears Prada 2, Minions 3, Mega Minions, Shrek 5, Supergirl, The Super Mario Bros. Movie 2, Moana, Ice Age 6, and Jumanji 3. Many industry insiders and analysts think the 2026 could be one of the biggest years ever at the box office. With five straight quarters of positive EBITDA, the most improved net loss delivered for any third quarter since Q3 2019, a balance sheet which continues to be anchored by a strong real estate portfolio, and cinemas which we believe to be poised for an exciting and robust 2026 movie release schedule, we believe the company is well positioned to deliver a much stronger 2026 and beyond, having weathered a very challenging last five years.

People ask whether, following our monetization of various assets over recent years, whether we’re still committed to our two-business, three-country strategy. The answer to that is yes. It’s obviously true that we’ve monetized a number of our real estate assets. This has been done strategically to meet our liquidity needs in the face of a pandemic that physically shut down all of our cinemas, then an unprecedented combination of writers and actors’ strikes that completely disrupted the supply of movies to our cinemas during a time when customers were just getting reacquainted with outside-the-home entertainment. We chose those assets which typically were either negative cash flow or which, after debt service, did not materially contribute to our cash flow and which, in our view, had reached the best value reasonably achievable without significant further capital investment.

We monetized our California headquarter building to cut administrative costs and have been able to work remotely now for two years. We’ve reduced our cinema count in the U.S. by six theaters, all of which have been negative cash flow since at least the pandemic. We believe that we continue to have a good core of cinemas and real estate assets. We’ve navigated these treacherous waters without one penny of U.S. government assistance, without resorting to debtor rights legal remedies, and without diluting our stockholders. Now let’s look at our specific businesses. I’ll take a look at our Q3 2025 global cinema business and compare it to the same period in 2024. At $48.6 million, our Q3 2025 global cinema revenues decreased 14%. At $1.8 million, our Q3 2025 global cinema operating income decreased by 21%.

As I mentioned, the overall weaker Q3 2025 performance was anticipated and followed along industry trends. This year’s lineup just could not match the slate from last year when Deadpool & Wolverine, starring Ryan Reynolds and Hugh Jackman, performed exceptionally well in all of our three countries. We believe our particular results were also impacted by unfavorable FX movements, the 7.3% reduction in our U.S. screen count due to the closure of an underperforming cinema in San Diego, and the partial closure of a 16-screen U.S. cinema under renovation that I will touch on in a minute. When you look at the year-to-date through September 30, 2025, our global cinema revenues increased slightly, and operating income grew by 142%, reflecting stronger performance due to a Q2 2025 and our focus on our various strategic initiatives.

Let me highlight a few of those key strategic initiatives that we’ve focused on throughout 2025 and have supported our results through the year. First, our food and beverage program. It remains a key area of focus. At AUD 8.05, our Q3 2025 Australian FMBSPP was the highest third quarter ever. At NZD 6.75, our Q3 2025 New Zealand FMBSPP was also our highest third quarter ever in our history. At $8.74, our Q3 2025 US food and beverage SPP was the highest third quarter ever and the second highest quarter ever when our US circuit has been fully operational. That excludes pandemic closure periods. The US FMBSPP appears to exceed the results of other major publicly traded exhibitors that disclose their FMBSPPs.

These strong FMB results were supported by improvement in our online and app food and beverage sales, the continued embrace of our movie-themed menus in all three countries. For instance, in the U.S., our spicy sauced flatbread was a strong seller this quarter. In Australia, the Jurassic Combo was one of our most popular movie-themed menus. Also, the ever-increasing merchandise spend, where especially in the U.S., we’re complementing our guests’ movie experience with the opportunity to buy movie-themed merch. In the U.S., this past quarter, we generated just over $350,000 in revenue from movie-themed merchandise. For instance, our Superman Totem Popcorn Container was one of the best-selling merch items we had during the period. We’re also driving guests to our theaters through existing loyalty programs and are in the process of developing new and improved rewards and membership programs, which are set to launch over the next few months.

In Australia and New Zealand, we recently revamped and relaunched our Free to Join Wedding Rewards program to provide better perks and savings. Today, we have over 363,000 members, which is an 8% increase over last quarter. With respect to our paid memberships in Australia and New Zealand for both our Wedding and Angelika brands, since our late Q4 2024 launch, we’ve signed up over 17,400 paid memberships, which is a 16% increase over last quarter. In December 2025, we’re launching a new Free to Join Rewards and Premium Membership Program in Hawaii and in select U.S.-based Wedding cinemas. In the U.S., our Free to Join Angelika membership program has 171,000 members today for eight Angelika-branded theaters, and we plan to launch our Premium Angelika monthly membership early next year.

Another primary initiative for our global executive team has been the collaboration with our cinema landlords to reset occupancy costs to become more in line with the economic realities of recent years. During our negotiations for occupancy expense relief, our position is that although attendance has not returned to pre-pandemic levels, nearly all of our operating costs have increased. We also highlight there’s really a limit on how much we can increase our ticket and food and beverage prices. Let’s take a closer look at the third quarter 2025 results for our U.S. cinemas. Our revenue decreased by 10% to $25.1 million compared to the Q3 in 2024, while our operating loss improved by 92% to a loss of $100,000 from a loss of $1 million in Q3 2024. In addition to what I mentioned earlier, a couple of other milestones to mention.

Our average ticket price, or ATP, of $13.13 marks our second highest third quarter ever for our U.S. cinema circuit. This is impressive in light of the strength of our Discount Tuesdays, which is branded Maholidays in Hawaii and Half Price Tuesdays in the U.S. mainland. With respect to our U.S. cinema circuit, our gross box office for alternative content and signature series programming, which is our non-traditional programming, delivered the highest third quarter box office ever. One of the reasons we performed so well in this regard had to do with the two-day K-pop Demon Hunter sing-along event distributed by Netflix, which provided another pivotal cultural moment for cinema goers, especially in our markets. We received questions about the strength of specialty titles in 2026.

First, let me report that the box office of the Angelika New York year-to-date through mid-November 2025 has beaten the same period in 2024. For this period, the top-grossing films included Wes Anderson’s Phoenician Scheme, the third quarter’s Sorry Baby, and most recently, Frankenstein from director Guillermo del Toro, which was released by Netflix and presented in 35 millimeter. Following the positive 2025 trends, we expect 2026 will deliver a similar result in the world of art house and specialty film. The Japanese movie Kokuhou from director Lee Sang-il, which has been a runaway critical and commercial success in Japan, will release in 2026 at the Angelika. Its Oscar-qualifying run at the Angelika this week has already demonstrated impressive pre-sales. Director Park Chan-wook’s No Other Choice from Neon opens late in 2025 and will carry over into 2026.

Later in 2026, we anticipate that specialty film goers will enjoy movies like Sony Pictures Classics’ Private Life starring Jodie Foster, the drama starring Zendaya and Robert Pattinson from A24, Focus Features’ Sense and Sensibility starring Daisy Edgar-Jones, and Werewolf from director Robert Eggers, the director of Nosferatu. We also received questions about the status of our CapEx spend in 2026. With respect to our U.S. circuit, we’re in the process right now of renovating our Reading cinemas in Bakersfield, California, which renovation should be completed by the end of January 2026. We’ve now added recliners to our IMAX screen, which will make the only IMAX with recliners within a 100-mile radius of Bakersfield. We’re creating a premium screen, Titan Lux, with Dolby Atmos sound system that also features heated recliners, which will open for Wicked for Good.

We’re adding another eight screens of recliners, three of which are open right now, with another five screens to open in January. We’ll be working on plans to add a Titan Lux and recliners to our Angelika in Mosaic, Fairfax, Virginia, which should be done by the end of 2026 and through 2026. We’re also looking to refurbish many of our existing recliner seats that were damaged through the pandemic, and that project should also be completed by the end of next year. I’ll note that by the end of 2026, 68% of our existing screens in the U.S. will feature recliners, and 44% of the theaters will have premium screens.

Turning now to our cinemas in Australia and New Zealand, following Q3 2025 box office industry trends and comparing to Q3 2024, our Australian cinema revenue decreased 17% to AUD 20.5 million, and our operating income decreased 38% to AUD 1.8 million. Our New Zealand cinema revenue decreased 23% to NZD 2.9 million, and the operating income decreased 96% to NZD 10,000. In addition to the milestones I’ve already mentioned, during the third quarter of 2025, our Australian team also achieved the following, which are all in functional currency. Our Q3 2025 Australian ATP of AUD 15.44 was the highest third quarter ever for Australian cinemas. We also secured a major ancillary revenue sponsorship from a major telco who signed up for our Turn Your Cell Phone Off naming rights. With the agreement running through March of 2027, the team achieved an exceptional sponsorship deal.

With respect to our New Zealand cinemas, our Q3 2025 New Zealand ATP of $13.65 was the highest third quarter ever. Now turning to our CapEx spend in 2026 in Australia and New Zealand, I’ll start with New Zealand. In New Zealand, through 2026, we’ll be redesigning our Reading cinemas at Courtenay Central in Wellington. The renovation will be a full top-to-bottom upgrade, where we’ll add recliners to all theaters, at least two premium screen concepts such as Titan Lux or others, and upgrade our FMB offer. That whole renovation will follow our new landlord’s seismic upgrade. We anticipate that the renovation will be completed sometime in 2027. In Australia, we’ll be adding a Titan Lux with Dolby Atmos and one premium screen with recliners to another key Reading cinema sometime in 2026.

I’ll note that by the end of 2026, 36% of our existing screens will feature recliners, and 59% of our international theaters will have premium screens. Now, let’s turn to our global real estate business, which on a segment reporting basis includes not only our third-party rental income, but also our live theater business in New York City and our intercompany rents. Starting with the third quarter of 2025, global results and compared again to the same period in 2024, at $4.6 million, our global real estate total revenues decreased by 7%, and at $1.4 million, our total income was flat. The results were primarily driven by the elimination of property-level cash flow from the third-party rents that we had received at our property assets in Townsville, Australia, and in Wellington, New Zealand. Both of those assets were sold earlier in 2025 to create liquidity to pay down debt.

Breaking it down by division for the third quarter of 2025, and again compared to the same quarter in 2024, with respect to Australia, our real estate revenue decreased by 22% to $2.4 million, and our income of $1 million decreased by 35%. At $221,000, our New Zealand real estate revenue decreased by 41%, and our New Zealand real estate operating income of $90,000 increased by 169% from an operating loss of $130,000 in the third quarter of 2024. With respect to our Australian and New Zealand portfolio, as of September 30, 2025, due to our asset sales in Wellington, New Zealand, and Townsville, Australia at Cannon Park, the number of third-party tenants in our combined Australia and New Zealand real estate portfolio reduced to 58 and is now primarily made up of tenants at Newmarket Village in Brisbane and the Belmont Common in Perth.

The quality of the remaining tenants is strong, and today we have an occupancy rate of 98%. For the third quarter, our combined third-party tenant sales from our Australian real estate were AUD 25.9 million. During the quarter, five lease transactions were completed with existing tenants. These included one new lease, three renewals, and one lease variation, reflecting continued tenant retention and portfolio stability. Also, as we recently reported in our Form 10-Q, we signed an agreement to sell our Napier property in New Zealand for NZD 2.5 million, with a lease back of the wedding cinema on the property. The contract is conditioned on the completions of various conditions, including due diligence, and right now we can’t provide any assurance that the deal will in fact close or when.

Now, turning to our U.S. real estate business, which includes our two live theaters in New York City, on a quarter-to-date basis, it delivered a 35% increase in revenue and operating income of $253,000, which represents a 433% increase. Our live theater segment delivered a standout performance this quarter, fueled by critically acclaimed productions and audience favorites. At the Minetta Lane Theater for the third quarter of 2025, our attendance increased over 450% and theater-level cash flow increased by over 140%, which is largely attributed to the successful shows produced by Audible and the Amazon company and our licensee at Minetta Lane. The acclaimed musical Megsitus just concluded its successful run in the third quarter at the Minetta Lane. I’ll also note that Audible recently exercised its option to extend their license another year at the Minetta Lane and will be there now through March of 2027.

Since the departure of Stomp, the Orpheum Theater continues to be in high demand with theater producers. During Q3 and part of Q4, Ginger Twinsies, a parody inspired by the iconic film The Parent Trap, received strong praise and played at the Orpheum. It was just announced that the viral TikTok dance duo, Costa Mir, who have about 7.4 million followers on TikTok, will debut their new show, 11 to Midnight, at the Orpheum, which opens in January of 2026. We also received questions about the leasing at 44 Union Square. As previously reported, we signed a non-exclusive LOI and have exchanged lease drafts with one potential tenant who is a non-office user for all the remaining space in the building. We are continuing to work with this tenant to see if a deal can be completed within the company’s long-term goals before the end of the year.

However, we continue to explore other leasing opportunities. Based on industry reports from area brokers, we know there’s been material improvement in the leasing environment in the Midtown South market, which has been further reinforced by the 2025 Union Square commercial report, which highlights positive momentum not only in the Union Square leasing statistics, but also the increase for traffic in the area. Our Newberry Yard property in Williamsport, Pennsylvania, remains classified as held for sale. While we’ve reviewed offers from both rail and non-rail users, we believe the property’s highest and best use is tied to the rail industry as the tracks and infrastructure remain valuable. We’re now exploring different marketing strategies to reach a greater pool of candidates. We’ve also received various questions about our Reading Viaduct in Pennsylvania.

As we reported in our most recently filed 10-Q, the City of Philadelphia has expressed an interest in condemning all or portions of our Reading Viaduct for use as a public park, and they passed an ordinance to permit such an action to proceed. Since railroad properties are subject to the jurisdiction of the Federal Surface Transportation Board, or STB, and cannot be condemned without the consent of the STB, the city brought a petition before the STB for a declaration that all railroad use of our viaduct had been abandoned and that, as a consequence, our viaduct was no longer subject to the jurisdiction of the STB, and by implication that the city could proceed with the condemnation action without seeking approval of the STB. We’ve recently appealed the STB’s recent decision.

The city has also filed litigation against us, claiming a failure on our part to address certain claimed building violations and seeking injunctive relief, as well as certain fines and penalties. We’re in the process right now of defending against that lawsuit. Regarding the potential for a condemnation, however, I can note that under applicable Pennsylvania law, the city would be required to pay us the fair market value of our property. We’ve not received any proposal from the City of Philadelphia before or after the adoption of the ordinance in December of 2023, though we do understand that funding has been received for the planning and design work tied to the development of a rail park on our property. We’re not aware of any funding being secured or set aside for an actual acquisition in whole or in part of our viaduct.

The company believes that the Reading Viaduct is a valuable asset of the company, and it will continue to vigorously defend itself in these cases. If the city does pursue condemnation, we’ll work vigorously to obtain the maximum fair market value for any property taken. That wraps up my report on recent developments. In summary, despite facing significant challenges over the last five years and having an underwhelming third quarter, the company has remained focused on safeguarding our global theaters and sustaining stockholder equity through strategic theater closures, cost reductions, and the sale of select real estate assets to meet liquidity needs created by the pandemic and the unprecedented 2023 Hollywood strikes, and to significantly reduce our overall debt.

At the same time, our cinema teams have implemented strategic initiatives to increase revenue and enhance cost efficiency, while our global real estate teams have secured a strong, stable, and dynamic base of third-party tenants, providing us with optimism regarding the future of Reading and the cinema industry as a whole. In addition, our global interest expense has decreased due to multiple paydowns as a result of asset sales and overall lower government interest rates in all three countries. This reduction in interest expense, coupled with a steady and strong lineup of Hollywood releases for the remainder of 2025 and 2026, we believe Reading is well positioned for stronger growth and a return to profitability in the fourth quarter in 2026 and beyond.

Before I turn it over to Gilbert, Margaret and I want to express our continued heartfelt appreciation to the entire management team and our board and all of our employees. Your dedication, professionalism, and tireless efforts have been instrumental in keeping the company moving forward and staying true to its long-term vision. Thank you. Now, let me turn it over to Gilbert. Thank you, Ellen. Consolidated revenue for the quarter ended September 30, 2025, decreased by $7.9 million to $52.2 million when compared to the third quarter of 2024. This decrease was due to decreased cinema revenue 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, and the reduction in screen count due to closure of one of our cinema complexes in San Diego, California.

These decreases in revenues were compounded by the decline in real estate rent revenue in Australia and New Zealand due to the sale of Cannon Park and Courtenay Central and the weakening of Australia and New Zealand foreign exchange rate against the US dollar, partially offset by the improved live theater rental and ancillary income. Consolidated revenue for the nine months ended September 30, 2025, increased slightly by $0.8 million to $152.7 million when compared to the same period of 2024. This increase is due to improved box office from better movie slates as Leo and Stitch and Minecraft movies released during the second quarter of 2025, improved US food and beverage revenue and better live theater rental and ancillary income, which was partially offset by a decrease in real estate rental revenue and decrease in food and beverage revenue in Australia and New Zealand.

Net loss attributable to Reading International for the quarter ended September 30, 2025, decreased by $0.2 million to a loss of $4.2 million compared to a loss of $7 million in Q3, 2024. Q3, 2025, basic loss per share improved by $0.13 to a basic loss per share of $0.18 compared to a basic loss per share of $0.31 for Q3, 2024. These improved results were partially due to a $1.1 million reduction in interest expense, a $1.2 million increase in other income, and a $0.7 million reduction in depreciation and amortization expense compared to the same period in prior year. Net loss attributable to Reading International for the nine months ended September 30, 2025, decreased by $21.1 million from a loss of $33.1 million to a loss of $11.6 million when compared to the same period in the prior year.

Basic loss per share improved by $0.90 to a loss of $0.51 compared to a loss of $1.48 for the first nine months of 2024. These results were primarily due to strengthened segment results, a $2.6 million reduction in interest expense, and the $9.7 million increase in gain on sale of assets as a result of gain on selling our Courtenay Central and Cannon Park properties in 2025 compared to a loss on selling our previously owned Culver City office in 2024. Our total company depreciation, amortization, impairment, and general administrative expenses for the quarter ended September 30, 2025, decreased by $1 million to $7.9 million compared to Q3, 2024. For the nine months ended September 30, 2025, decreased by $2.6 million to $25.2 million compared to the same period in the prior year.

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 loss in 2025. For the third quarter of 2025, our adjusted EBITDA increased by $0.7 million to an income of $3.6 million from an income of $2.8 million compared to Q3, 2024. This increase was primarily due to an increase in other income. For the nine months ended September 30, 2025, our adjusted EBITDA increased by $17.4 million to an income of $12.8 million compared to the same prior year period.

This increase was due to improved operational performance through more efficient management of operating expenses and gain from asset monetization, as mentioned previously. Shifting to cash flow for the nine months ended September 30, 2025, net cash used in operating activities decreased by $6 million to $5.9 million compared to the cash used in nine months ended September 30, 2024, of $11.8 million. This was primarily driven by a decrease in net operating loss, partially offset by a decrease in net payables. Cash provided by investing activities during the nine months ended September 30, 2025, increased by $32.3 million to $37.3 million compared to the cash provided in the nine months ended September 30, 2024, of $5 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. Cash used in financing activities for the nine months ended September 30, 2025, increased by $38.3 million to $36.2 million compared to the cash provided in nine months ended September 30, 2024, of $2.1 million. This was primarily due to the paydown of our Westpac Bank of America debt and an NAB facility in 2025, as discussed previously, compared to the NAB Bridge facility drawn in the same period of 2024. Turning now to our financial position, our total assets on September 30, 2025, were $435.2 million compared to $471 million on December 31, 2024.

This decrease was driven by a $4.3 million decrease in cash and cash equivalent from which we funded our ongoing business operations, a $31.9 million decrease in land and property held for sale due to the sale of our Cannon Park and Courtenay Central assets. As of September 30, 2025, our total outstanding borrowings were $172.6 million compared to $202.7 million on December 31, 2024. The debt reduction was primarily funded by the net proceeds from the sale of our two major property assets, Cannon Park in Australia and Courtenay Central in New Zealand. Our cash and cash equivalent as of September 30, 2025, were $8.1 million. Further to address liquidity pressure on our business, we continue to work with our lenders to amend certain debt facilities, and we continue to have our Newberry Yard Williamsport, Pennsylvania property classified as held for sale.

During the third quarter and the beginning of the fourth quarter of 2025, we made progress with our lenders on the following financing arrangements. On July 3, 2025, we extended the maturity date of our Bank of America loan to May 18, 2026, and modified the principal repayment schedule. On July 18, 2025, we extended the maturity date of our Santander loan, which is the loan on our live theater assets in New York City, to June 1, 2026. We also paid down $100,000 on the loan at signing. On November 12, 2025, we extended the maturity of our National Australia Bank loan to July 31, 2030, and modified the principal repayment schedule. On November 13, 2025, we extended the maturity of our Valley National Bank loan to October 1, 2026. With that, I will now turn it over to André. Thank you, 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 selected a few additional questions to offer additional insights from management. The first such question, which Ellen will address, there was a mention in the Form 10-Q about the Nusa Australian Cinema Development Project still planned for 2027, or has it been deferred indefinitely? What is the current budget and expected ROI for this project? Ellen? Yes. We’re still expecting the Wedding Cinema, which is being an eight-screen cinema with a Titan Lux, to be built out in Nusa in Queensland. Our landlord and developer of the Stockwell Development Group is still in the town planning stage of his major multi-use project.

Today, we believe the completion of the theater’s construction and the opening will not happen until around 2028. We do not announce the terms and conditions of specific cinema deals. However, as we have reported in the past, for third-party cinema lease deals, we usually target at least a high-teen, double-digit return. The current deal for Nusa, the Nusa Cinema, is consistent with those targets. Thanks, Ellen. The next question. We have been asked several questions about our plans for the refinancing of our Bank of America, Emerald, and Valley National loans. Can you please elaborate? Gilbert? We plan to refinance this debt in 2026 and are considering a variety of alternatives and structures. We are encouraged by what we see as the improving environment for real estate financing, including anticipated reduction in interest rates, improving commercial rental market in Manhattan, and the current industry box office projections for 2026.

Obviously, a significant factor in any refinancing of our Emerald debt would be the lease status of our 44 Union Square. While no assurance can be given, we anticipate resolution of our current non-exclusive LOI by the end of the year. Thanks, Gilbert. The next question. Given Reading has no present New Zealand debt and the excess proceeds from the Wellington Courtenay sale were upstream to pay down costly US debt, can you share what your likely use of the Napier sale proceeds will be? Ellen? If the Napier transaction closes, we’ll likely use the proceeds to support the renovation of our Reading Cinema, Courtenay Central, and Wellington, New Zealand. And/or, we may use the proceeds for general corporate use in New Zealand. Finally, one last question, which I will deal with.

We also received a number of questions about the Sutton Hill Associates acquisition that involves RDI assuming $13.65 million in third-party notes at 4.75% interest, maturing September 30, 2035. Who will be the holder of these third-party notes? What assets will secure the guarantee and guarantee these notes? Sutton Hill Associates, 25% Sutton Hill Properties interest and Village East Ground Lease, and Reading USA or Reading International, respectively. I appreciate the low interest rate on the debt. Can you explain why so favorable, especially with a 10-year maturity? A very complex question. We believe that this will be a good transaction for Reading. It will, in essence, wind up and close out of our master lease transaction we entered into with Sutton Hill Capital in the year 2000.

The third-party notes are, as previously disclosed, payable to a third party, and the reasons for that third party’s willingness to do the deal described in our 10-Q would only be a matter of speculation on our part. As part of the transaction, the third-party notes would be guaranteed by Reading International, but would otherwise be unsecured. That marks the conclusion of our third quarter conference call for 2025. This year continues to see a gradual resurgence of the breadth and depth of the cinematic experience, despite the slight downturn in the third quarter numbers. We aspire to translate this into future enhanced value for our stockholders as the end of 2025 comes and the full 2026 year unfolds. We appreciate you listening to the call today. We thank you for your attention and support and wish everyone safety.

As always, we look forward to seeing you at our movie venues.