Reading International Inc (RDI) 2024 Q1 法說會逐字稿

This is the first-quarter 2024 earnings call.

Thank you for joining Reading International's earnings call to discuss our 2024 first-quarter results.

My name is Andrzej Matyczynski, and I'm 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 provisions 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 2024 first-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 cost 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 nonrecurring in accordance with the two-year SEC requirement for determining whether an item is nonrecurring, 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, is also used as an accepted industry acronym.

We also use a measure referred to as food and beverage spend per patron, F&BSPP, which is a key performance indicator for our cinemas.

The F&BSPP is calculated by dividing our 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 10-Q 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 2024 first-quarter results and discuss our business strategy going forward, followed by Gilbert who will provide a more detailed financial review.

Ellen?

Thank you, Andre.

Welcome, everyone, to our call today and thanks for listening in.

The negative impacts from the 2023 Hollywood strikes continued to be felt through the first quarter of 2024.

Each of our cinema divisions in Australia, New Zealand, and the United States felt the blow of release dates shifts, especially in the early part of the first quarter.

While there were some impressive picture by picture performances, like Bob Marley: One Love, Dune: Part Two, and Godzilla x Kong, overall the trajectory of our improved performance since the pandemic was interrupted by the unexpected bump in the road during the first quarter because of the strikes.

While our first-quarter 2024 top-line metrics disappointed, the dips compared to earlier periods were not material.

Our $45.1 million in total revenue represented a slight 2% decrease over the first quarter of 2023 and was 73% of 2019's first quarter.

At $41.3 million, our global cinema revenue decreased 2% compared to the first quarter of 2023 and was 71% of 2019's first quarter.

At $3.8 million, our Q1 2024 global real estate revenue represented a 1% decrease over the first quarter of 2023, but a 6% increase over the first quarter of 2019.

This slight drop in this segment metric compared to first-quarter 2023 was due to the sale of our Culver City office building in February of 2024.

These results reported in US dollars were achieved, notwithstanding the Hollywood strikes, but also despite decreases in the value of the Australian and New Zealand dollars vis-à-vis our reporting currency, US dollars.

This FX change impacts us as historically approximately 50% of our revenues are generated in Australia and New Zealand.

While our top-line revenues dropped a bit, thanks to the efforts of our operating teams, our operating income improved from the first quarter of '23.

At $3.3 million, our first-quarter 2024 segment operating loss improved 9% from an operating loss of $3.6 million in the first quarter of 2023.

At negative $4.2 million, our Q1 2024 global cinema operating loss reduced by 10% from negative $4.6 million.

Our global real estate operating income of $900,000 decreased 12% compared to the first quarter of 2023.

Our first-quarter 2024 adjusted EBITDA was negative $4 million, which is a 40% deficit adjusted EBITDA compared to first quarter of 2023.

Excluding the impact of the $1.1 million loss on the sale of our Culver City office building, then our adjusted EBITDA would have been flat compared to the first quarter of 2023.

Reflecting the increase in interest rates across the globe, our first-quarter interest expense was $5.3 million, a 28% increase from the first quarter of '23.

This macro-economic condition drove a higher first-quarter 2024 net loss, which was negative $13.2 million.

Understanding the pressing need to enhance our liquidity and fortify our balance sheet, we've continued to divest certain strategically selected assets from our real estate portfolio to secure the company's long-term future and reinforced short-term liquidity.

In February 2024, we sold our Culver City office building for $10 million in anticipation of moving into less expensive Los Angeles office space.

In the fourth quarter of 2023, we sold our property in Maitland, New South Wales, Australia, for AUD2.8 million.

Following these asset sales and in order to further bolster our liquidity and capital resources in 2024, our Board has directed management to review the company's real estate portfolio for additional potential assets to monetize.

We've begun efforts to monetize our Cannon Park assets in Townsville, Queensland.

Management is also analyzing potential monetization strategies for certain of its real estate assets in New Zealand.

One of our key 2024 priorities is to continue reducing our debt and thereby reducing our interest expense.

Understanding our debt conditions, we made progress on reducing institutional debt and extending multiple bank loans this year.

We paid off an $8.4 million loan with the proceeds from the sale of our Culver City office building, which closed in February of '24.

In March of '24, we amended our Bank of America facility and extended the maturity date to August 18, 2025.

In early April, we amended our NAB facility.

We extended the maturity date to July 31, 2026, and obtained a AUD20 million Bridge Facility, which we'll need to prepay when we sell our Cannon Park assets.

In late April, we executed the first 12-month extension of our Union Square financing, extending the maturity to May 6, 2025.

And right at the start of this year, we extended our Minetta and Orpheum loans to June 1, 2024, while we pursue a full refinancing.

And today, we are continuing discussions with the bank about a further extension.

We're fortunate to have strong real estate assets on which to pull back.

As opposed to diluting our stockholders, these assets have provided us a bridge to 2025 and 2026 when the blocks better movie slate looks substantially more promising.

On that note, let's look more closely at our global cinema business, which historically has provided the foundational cash flow to support our asset growth.

As I just mentioned, while the quarter overall was down, audiences did come out for certain movies.

Bob Marley: One Love set a record as the highest grossing Valentine's Day opener with over $14 million on its debut.

It's now grossed $177 million globally, showing that biopics can still resonate with broad audiences.

Dune: Part Two surpassing its 2021 predecessor, now has over $710 million in world worldwide grosses.

Kung Fu Panda 4 marked the return of a beloved franchise after an eight-year hiatus and has earned of our $529 million globally.

Godzilla x Kong: The New Empire released on March 29, has garnered over $559 million in worldwide grosses.

The quality of the movie slate for the remainder of '24 does look terrific.

Key titles we're watching include Inside Out, a sequel to Pixar's beloved animated film expected to attract both families and animation fans; Deadpool & Wolverine, reuniting iconic Marvel characters and promising a mix of humor and action; Joker: Folie à Deux, the sequel to the groundbreaking 2019 film already has audiences eager to come out to see what's next; Wicked, a beloved musical adaptation is set to draw large audiences with its unique blend dependency and drama; Gladiator II, the long awaited sequel to the Oscar-winning epic, is expected to be a major box office draw.

The diversity and quality of the upcoming film slate, along with the passion of movie audiences, give us reason to remain optimistic about the future of our industry.

However, in 2024, despite certain movies having an amazing box-office potential, it's widely expected that the overall industry box office will be behind 2023, which was already in recovery mode, but ultimately set back by film release delays due to the Hollywood strikes.

The Hollywood strike production delays and the rescheduling of theatrical release dates resulted in several big titles being postponed to 2025, including Captain America: Brave New World, Thunderbolts, Disney's Snow White, Elio, Dirty Dancing, Mission Impossible 8, SpongeBob SquarePants, and James Cameron's highly anticipated Avatar 3.

With that said, we believe that the 2025 outlook looks very promising.

Disney is planning nearly twice as many releases compared to 2024, benefiting from the studio's renewed emphasis on creativity and original storytelling.

In 2025, audiences will get James Cameron's Avatar 3, Tom Cruise's Mission Impossible 8, a new Jurassic World film from Universal, and James Gunn's Superman from DC studios for Warner Brothers.

During the first quarter of 2024, despite the challenges we faced, our management teams continued to work a variety of business angles.

Each cinema division delivered the second highest first-quarter F&BSPP to date.

And in the US, our F&BSPP outperformed certain publicly traded exhibitors for the first quarter of 2024.

Our box office per capita for our US cinema division reached the highest first quarter ever.

And for the first quarter of '24, our Australian cinemas recorded their second highest first quarter for their box office per capita when measured in local currency.

Through the 2024 year, we'll continue to focus on key initiatives that should generate increased income by 2025.

Just in time for a very compelling movie slate.

By the end of '24, we're looking to launch a paid rewards program to be implemented across each cinema division.

We're focused on increasing transaction or basket sizes in each cinema division from F&B ordering via our websites and apps.

And following our 2024 asset sales and reduction in debt, we expect to start growth CapEx investments in our facilities again.

Now let's look specifically at our US cinemas.

Our first-quarter 2024 revenue decreased 2% to $41.3 million, and our US cinema operating loss improved by 10% to an operating loss of $4.2 million.

These metrics take into account the closure of three underperforming theaters during 2023, two in Hawaii and one in California.

We received a stockholder question about other underperforming theaters that we have identified for near-term closure and what's the estimated timing and future savings.

To further streamline the efficiency of our US circuit going forward, we do expect to close one more unprofitable small US theater during the second quarter of 2024.

Other notable milestones achieved during 2024: despite the cinema industry experiencing an overall 5.1% decline, our US circuits gross box office revenues rose by 1.6% from the first quarter of 2023.

Boosted by the success of specialty and art films like Zone of Interest, American Fiction, All of Us Strangers, Problemista, and Perfect Days at our art houses.

This 670 basis point industry outperformance also contributed to a 5 basis point increase in Reading's market share over the first quarter of 2023.

These results were achieved even with the closure of three locations, Kaahumanu, Koko Marina, and Rohnert Park in '23 and the challenges posed by the Hollywood strike.

The Angelika in New York distinguished itself as North America's top-performing theater for Zone of Interest, All of Us Strangers, Problemista, and Perfect Days.

The first-quarter 2024 box office grosses at the Angelika, New York increased by 67% over the first quarter in 2023.

Moreover, the first-quarter 2024 box office grosses of $1.2 million at the Angelika, New York represented 127% of 2019's box office grosses.

Though our US average ticket price or ATP in the first quarter reached $13.76, the highest first quarter ever for our US cinemas, our team will be evaluating our pricing structure to provide our guests with more value options.

Since early 2023, each of our US cinemas have the ability to sell alcohol, allowing us to achieve a stellar US cinema F&BSPP of $7.74, becoming the second highest first quarter ever.

As of today, we have over 130,000 Angelika members in our free-to-join membership program, which accounted for approximately 27% of all paid attendance for our Angelika cinemas within our US circuit.

And now let's turn to our cinemas in Australia and New Zealand.

First I note that these results are in US dollars and as a result, understate the actual improvement due to the loss in value of the Australian and New Zealand currencies.

In the first quarter of 2024, our Australian cinema revenue increased by $110,000 or 1% to $17.3 million versus the first quarter of '23.

However, our operating loss also increased by $373,000 to a loss of $498,000.

In the first quarter of 2024, our New Zealand cinema revenue decreased by $323,000 to $2.6 million versus the first quarter of '23.

And the operating loss increased by $70,000 to a loss of $231,000 from an operating loss of $161,000 in the first quarter of '23.

Notable milestones achieved during the first quarter of '24 include the following, which are all reported in functional currency.

Our Australian ATP of [$13.62] was the second highest first quarter ever for Australian cinemas.

This comes even though we strategically added compelling $10 ticket value options in early 2024 for guests at eight of our theaters.

Our first-quarter 2024 Australian F&BSPP of $7.66 is our second highest first quarter ever for Australian cinemas and represents 68% increase from the first quarter of 2019.

We added another liquor license this past quarter and expect our Australian circuit to be over 75% licensed by the end of 2024.

We also launched a new Gold Lounge F&B menu, featuring new food items and a curated wine list with an emphasis on quality regional varietals.

We entered into country-wide revenue-generating promotions with blue chip global brands like MasterCard and Telstra, which helped us deliver the highest first quarter ever screen advertising in Australia for the first quarter of 2024.

At 210 screens in the first quarter of '24, our screen count increased by 7% due to the third-quarter 2023 openings of the Angelika in Brisbane and a Reading Cinemas in Busselton.

On an Australian dollar basis, these new builds helped generate a 7% increase in attendance and a 5% increase in total revenue compared to the first quarter of '23.

We believe we're well positioned to take advantage of the more encouraging slate in 2025 in Australia.

With respect to our New Zealand cinemas, our first-quarter 2024 New Zealand F&B spend per head of $6.70 was the second highest first quarter ever.

And in New Zealand we're also steadily increasing the percentage of F&B sold online.

Now let's turn to our global real estate business.

First and most importantly, due to our liquidity needs, let's start with our asset monetizations.

During the first quarter of 2024, we sold our Culver City office building for $10 million.

Factoring in our office needs in Los Angeles over the next few years, we chose to downsize and reduce our overall G&A cost structure.

Our decision was also influenced by the effective bankruptcy of World Wide Packaging, our second floor tenant, which is leasing approximately 50% of the net rentable area of the building.

We expect to save about $1.5 million over the next two years.

To improve the commute time of our Los Angeles-based team and to take advantage of a dip in the Downtown, Los Angeles market, we intend to move our team Downtown.

Due to the current office market conditions in big cities, including LA and the loss of the WWP tenancy, this monetization while improving our overall cash flow generated a $1.1 million book loss.

As I touched on earlier, a key priority for the company is to reduce our overall interest expense through debt reduction.

Our Board has directed management to evaluate the company's real estate portfolio for assets to monetize that will provide us with liquidity to pay down debt over the next few years as we wait for the global cinema business to rebound in full.

As of today, our team has decided to put our Cannon Park assets on the market and pursue a sale.

We expect that we will have a transaction completed by the fourth quarter of '24.

We intend to lease back the Reading Cinema on the property on a long-term basis from the purchaser.

As you know, we also currently have or 26 acre-plus industrial site in Williamsport, Pennsylvania on the market.

To continue boosting our liquidity to pay down debt, we expect to announce other asset monetizations within the next quarter.

With respect to our real estate operations compared to the first quarter of 2023, our first-quarter 2024 global real estate revenue of $4.9 million slightly dipped by 3% and operating income of $890,000 decreased 12%.

Noting that our inter-company rents are included in our segment reporting, the slight dip in these real estate metrics relate to the recent property sales of Maitland in New South Wales for AUD2.8 million and the Culver City office building for $10 million.

Our live theater circuit continued to achieve positive operational results for the first quarter of '24 compared to the first quarter of '23 and provided important cash flow for the company during a time when the real estate market, especially in New York City is challenged.

During the first quarter of '24, the Orpheum hosted comedian Rachel Bloom in a limited engagement of Death, Let Me Do My Show; then Eddie Izzard performed in a limited engagement, which ended in mid-April 2024.

And in April 2024, we executed a license agreement for an open-ended run of the Big Gay Jamboree being produced by, among others, LuckyChap Entertainment, Margot Robbie's production company, and one of the producers of Barbie.

This shows starts performances at the Orpheum in mid-September 2024.

Audible, an Amazon company, continued to operate at the Minetta Lane Theatre, and they mounted three new shows during the first quarter, Energy Curfew Music Hour, Laura Benanti: Nobody Cares, and Dead Outlaw.

In April of '24, the license agreement with Audible was extended through March 15, 2026, and has a one-year option to further extend to March 15, 2027.

Turning to our Australian real estate operations.

On a local currency basis, our first-quarter 2024 Australian real estate revenue increased by $48,700 or 1%.

And our New Zealand real estate revenue of NZD596,000 increased by just $3,700.

Reflecting a weaker foreign exchange rate for the Australian and New Zealand dollars with respect to US dollars, our first-quarter 2024 Australian real estate revenue of $3.1 million slightly decreased by 2% in the first quarter of 2024 compared to the first quarter of '23.

And our first-quarter '24 New Zealand real estate revenues of $365,000 decreased by 2% compared to the same period last year.

As of March 31, 2024, we had 77 third-party tenants in our combined Australian and New Zealand real estate portfolio.

Our combined third-party tenant sales for the quarter from our Australian real estate portfolio was AUD28.5 million.

Our third-party occupancy rate was 96%.

During the quarter, we signed two new leases, one lease renewal and one assignment of lease.

With respect to our development opportunities in the US and New Zealand, as we've mentioned before, we recently engaged George Comfort & Sons, a full-service New York City real estate firm, with a proven track record of tackling complex and challenging urban projects to assist with the activation of the upper floors of 44 Union Square.

In 2023, we resumed focus on realizing the value of our real estate holdings in the city of Philadelphia.

Our properties include the just under one mile-long Reading Viaduct, a raised rail bed and bridges reaching through the Callowhill and Poplar neighborhoods, Philadelphia to Vine Street in the city's central business district near the proposed site for the new home of the Philadelphia 76ers.

Calculated inclusive of our continuous -- contiguous properties, the Reading Viaduct comprises approximately 6.5 acres of land plus various bridges passing over various public streets and sidewalks connecting our various parcels into one continuous landholding, unimpaired by any public thoroughfares.

With respect to our assets in Wellington, New Zealand, we were approached by the Wellington city council in late 2022 about accelerating the redevelopment of our Courtenay Central building.

For approximately 18 months, we engaged with representatives of the Wellington city council about a transaction that would accelerate the redevelopment.

While we were able to negotiate an agreement that was approved by the council and which would have facilitated financing for the initiation of the project, that agreement required the negotiation of definitive additional documentation.

After months negotiating of documentation and believing that we'd substantially finished it in all material respects, negotiations were purportedly terminated by the Wellington city council on a unilateral basis without warning.

This action followed a leak of the anticipated deal terms and a flood of adverse press asserting that the deal was too favorable to Reading.

Following this, the company is reassessing its options with respect all of our real estate holdings in Wellington.

In sum, while we're bracing for a slowdown in the global box office in '24, as a result of the Hollywood strikes, we're optimistic about the movie slate in 2025 and beyond and are confident that our teams are pulling all appropriate operational levers to drive attendance and revenue ancillary to the box office.

In 2024, we've worked with our lenders to provide some relief, and we've activated another round of asset sales to sustain our company through 2024 and maintain a stable foundation to the future.

This will also give the company the ability to focus on some of the most important real estate developments that will drive the most long-term value for our stockholders.

That wraps up my business review for now.

I'm going to turn it over to Gilbert.

Thank you, Ellen.

Consolidated revenues for the quarter ended March 31, 2024, decreased by $760,000 to $45.1 million when compared to the first quarter of 2023.

This decrease was primarily driven by lower US food and beverage revenues, lower US advertising and other revenues, and lower New Zealand admissions compounded with a lower average ticket price as well as weakening of Australia and New Zealand foreign exchange rate against the US dollar.

Net loss attributable to Reading International, Inc., for the quarter ended March 31, 2024, increased by $2.1 million to a net loss of $13.2 million when compared to the same period in the prior year.

Basic loss per share increased by $0.09 to a basic loss per share of $0.59 for the quarter ended March 31, 2024, compared to the quarter ended March 31, 2023.

These results were primarily due to increased interest expense and the loss of the sale of our Culver City office building.

Our total company depreciation, amortization, impairment, and G&A expenses for the quarter ended March 31, 2024, decreased slightly by $200,000 to $9.6 million compared to the same quarter in the prior year.

These decreases were due to a decrease in depreciation and amortization due to a delay in CapEx spending.

For the first quarter of 2024, income tax benefit decreased by $300,000 to an income tax benefit of $220,000 compared to the equivalent prior year period.

The change between the first quarter of 2024 and the first quarter of 2023 was primarily related to an increase in reserves for the unrecognized tax benefit in 2024.

The first quarter of 2024, our adjusted EBITDA loss increased by $1.1 million to a loss of $4 million compared to the same prior year period.

This increase was primarily the result of the loss on the monetization of our Culver City office building, along with slightly decreased cinema revenues, offset by lower cinema expenses.

Shifting to cash flows.

For the three months ended March 31, 2024, net cash used in operating activities decreased by $8.8 million to a net cash used of $2.8 million when compared to the same prior year period.

This was driven by an increase in operating liabilities, primarily accounts payable.

Cash provided by investing activities for the three months ended March 31, 2024, increased by $9.2 million to cash provided of $7.6 million from a cash used of $1.5 million.

This was due to a $9.6 million net proceeds from the sale of our Culver City office building in February of 2024.

Cash used in financing activities for the three months ended March 31, 2024, increased by $9.8 million to $11.2 million due to the payoff of the citizens loan of $8.4 million following the sales of the Culver City office building and the additional $275,000 debt repayment required when our Bank of America credit facility was amended on March 27, 2024.

Turning now to our financial position.

Our total assets on March 31, 2024, were $494.9 million compared to $533.1 million on December 31, 2023.

This decrease was driven by a $5.4 million decrease in cash and cash equivalents from which we funded our ongoing business operations and $9.3 million decrease in operating lease right-of-use assets, an $8.6 million decrease in operating properties and a $10.7 million decrease in assets group held for sale.

On March 31, 2024, our total outstanding gross borrowings were $195.7 million compared to $210.3 million on December 31, 2023.

Our cash and cash equivalents as of March 31, 2024, were $7.5 million which includes approximately $2.5 million in the US, $4.7 million in Australia, and $320,000 in New Zealand.

In addition to address the liquidity pressure on our business, we are working with our lenders to amend certain debt facility, and we have selected certain real estate assets for potential monetization.

As Ellen mentioned, we monetized our Maitland property in Australia during the first quarter of 2023 for AUD2.8 million.

And during the first quarter of 2024, we completed the monetization of our Culver City office building for $10 million and fully discharged the related mortgage.

During the first quarter of 2024, on January 26, 2024, we extended our life theater loan maturity date to June 1, 2024.

On March 27, 2024, we further extended our Bank of America loan maturity date to August 18, 2025, together with modification of certain financial covenants.

On April 4, 2024, we extended the NAB loan maturity date to July 31, 2026, and NAB also provided a bridge facility of AUD20 million.

On April 23, 2024, we exercised the one-year extension option for the loans with Emerald Creek Capital to extend the maturity date to May 6, 2025.

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 e-mail.

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 of these Ellen will address.

In addition to the Australian cinema development project in Noosa, what was or is the other cinema that you said was planned for New Zealand and what happened to this prospective development?

What are the screen count, timing, and milestones providing more info on the prospective projects known to be going forward?

Ellen?

At this point, the potential theater deal we had in New Zealand will not progress because the real estate developers terminated negotiations due to their concerns about increasing construction costs in New Zealand.

They've indicated to us that they'll pursue other uses at the center.

Today, we have one new theater project on the books in Australia.

It's located in Noosa, in Queensland and our landlord is Stockwell, who's a well-regarded Queensland-based developer, which is creating a first class mixed use project as part of its new specific shopping center.

They've filed a development application already.

And our Reading Cinema will be a six screen all-recliner seat theater with an elevated F&B component and at least two TITAN LUXE auditoriums.

Well, again serve as the anchor for the new village being created, and we expect the theater to be open by 2027.

Thanks, Ellen.

If the sale of Cannon Park is successful, approximately what percentage of the proceeds could be expropriated to the US?

How much of any of the new AUD20 million facility can we expropriated to the US?

Given the possibility of another strike in Hollywood this summer and the weak slate this year, is it not prudent to attempt to raise twice the capital that our Cannon Park sale would raise?

Gilbert?

The bridging agreement with NAB provided us with the short-term liquidity that was needed by the business.

We have been able to expropriated some of these funds out of Australia.

The agreement further calls for repayment of the bridge facility out of any sale proceeds from the Cannon Park.

As Ellen stated in her comments, our Board has directed management to further evaluate the company's real estate portfolio for assets to monetize that will provide us with liquidity to pay down debt over the next few years.

Thanks, Gilbert.

In light of the fact that any net proceeds from the proposed sale of the Williamsport industrial property won't come close to paying off the current outstanding balance due on the Bank of America US term loan and the other maturing debt, and now increasingly costly Valley National Bank load maturing this October on cinemas one, two, and three, when does it make sense for the Board to decide to more formally and aggressively offer up all or part of the cinemas one, two, and three property for sale?

Ellen, can you address this?

Yeah.

And yes, our stockholders are correct that the Williamsport sale will not pay off the balance of the Bank of America term loan and the other maturing debt.

As I've addressed in my earlier comments and the answer that Gilbert just provided on Cannon Park, under the Board's directive, management is actively evaluating our entire real estate portfolio for assets to monetize.

That evaluation is taking into account a myriad of factors, including the conditions -- the market conditions in each market where our assets' located.

Today, the sale process is underway for our Cannon Park asset, which is a major asset for us.

As I mentioned earlier, we expect to announce other assets for sale during the second quarter of this year.

Thanks, Ellen, and will round up with the final question regarding our new LA corporate HQ office plans and operating costs.

Six weeks ago on the quarter four 2023 audiocast, you said you were finalizing a lease for office space in Downtown, LA and expected to be in this space within six to eight weeks.

What is the status of the move and the expectations of year-on-year quarterly cost savings?

Well, the devil is in the detail.

We're in the final stages of negotiating lease and expected to be signed before the end of this second quarter.

Following that, occupancy should occur covalent within four to six weeks after signing.

As is typical for leases of built-out space in this market, the LOI provides percent TIs and rent abatements.

Over the next two years, we expect to achieve savings of at least $1.5 million.

In the interim, we are conserving cash by working remotely and creatively to meet our space needs.

With that answer, we'll conclude this first-quarter 2024 earnings call.

We appreciate the questions that you have provided us.

And thank you for listening to today's call.

We'd like to take this opportunity to wish everyone good health and safety.

Thank you, again.