Lawndale

Mark Cuban Ups Reading International Stake

Reading International (RDI) reported quarterly results late last week.

The Q3 earnings full press release may be found on RDI's website at www.readingrdi.com/pdf...

I note the following salient points:

1) Since the US dollar skyrocketed last year during Q3 08, this year’s Q3 09 was the final quarter of negative yr/yr currency headwinds for Reading. Despite those headwinds, Reading’s operating results were good. In local currency, Reading’s Australia and New Zealand cinema segments enjoyed continued revenue growth, in the case of Australia, growing better than US industry box office trends. Global box office releases for the remainder of 2009 and early 2010 (summer in Aus/NZ) look appealing. Going forward, for at least the next few quarters, yr/yr currency impacts on Reading’s operating cash flow, should finally become a tailwind.

2) Good operating results and the quarter’s foreign currency improvement catapulted Reading’s book value/share to over $5. We believe this $5/share book value still greatly understates the current fair value of Reading’s Australian, New Zealand, New York and Chicago real estate, held for more than a decade that has since been upzoned and some developed. Thus, we feel true book value is well more than $5.

3) Reading maintains substantial liquidity and an interest in accretive acquisitions of cash flowing assets. Sept 30 cash and marketable securities balances were $23.1MM and Reading has a combined $26.6MM of undrawn credit availability on its Australian and New Zealand Credit facilities. The company has filed of a universal shelf registration statement for up to $100MM of debt and warrants for debt and “units”, etc in addition to equity to enable Reading to act quickly to structure and finance growth transactions.

Other items of note :

4) The Malulani litigation settlement gain, reported below-the-line as other income, is actually a recovery of several quarters of above-the-line s,g&a litigation expense. “Apples to Apples” analysis would call for this current quarter’s gain to be viewed as part of operating income.

5) Prior year 2008 revenues included multiple quarter lump sum recognition from completion of screen advertising revenue contract in Q3 2008.

6) During the quarter, Reading re-listed both classes of its common stock from the AMEX to the NASDAQ exchange, maintaining the RDI symbol and adopting the RDIB symbol for the Class B voting stock. The RDI shares trade as a component of both the Russell 2000 small cap and Microcap indicies.

An Obituary for the Paper Industry

the author ought research and learn about and then add that IP's earnings benefited from a one time windfall from the black liquor tax subsidy this past year that expires at end of the year.

U.S Based Airlines See Market Lift-Off

Doesn't it give one pause at current valuations of the airlines when an analysts focus is “Assuming stable demand and fuel, we now expect winter to pass with nary a bankruptcy in sight,”. If bankruptcy is even an option, albeit less of one now that this analyst has deemed so, then some of these valuations on equity are ridiculous.

Mark Cuban Ups Reading International Stake

Mark Cuban discloses increased purchases of Reading International (A-RDI and A-RDI_B)

In a form 4 filing made with the SEC on June 23, billionaire Mark Cuban disclosed an initial purchase, at $4.51/share, of 500,000 shares or 2.4% of Reading’s Class A stock (A-RDI); and
an incremental purchase, at $6.84/share, of 50,100 shares of Reading International Class B stock (A-RDI/B), increasing his investment to 207,511 or 13.9% of Reading’s Class B shares;

Mark Cuban’s Form 4 filing can be found at SEC website at www.sec.gov/Archives/e...

On June 19th, Russell published its final update to its preliminary lists of additions to and deletions from the Russell indexes. Reading’s Class A Stock under the symbol RDI remains on the list for addition to three Russell indices, being added to the Russell 2000 part of its most popular Russell 3000 group of stocks as well as added to the Russell Microcap and Global Indices. The Russell Reconstitution will be effective after the close of trading this week on Friday, June 26. The full list of additions/deletions may be found at www.russell.com/indexe...

Mark Cuban Ups Reading International Stake

Cuban's purchase may prove fortuitous for Reading. He owns the Landmark cinemas chain and not long after purchasing 10% of Carmike cinemas, that stock rose substantially. Maybe investor who followed Cuban into Carmike will consider taking profits, rolling out of CKEC and into RDI, which is not up anything close to CKEC this year, despite a favorable reversal of AUD/NZ currency vs. dollar. Also RDI is likely to be be named late 6/12 to Russell's list of RU 2000 additions for its end of june index recomposition.

Q.E.P. Company: Flooring the Future

You ought to look at a very small public company, P & F Industries, also with facilities in Florida, with lines of business comparable to QEPC. PFIN is equally or possibly more undervalued and may be a better risk return situation in that PFIN is not entirely tied to consumer hardware model but also has industrial.

IMO - Both QEPC and PFIN are too small to individually support the substantial costs of being a public company and their CEO's base compensations. If a strategic combination made sense their boards, SUBSTANTIAL fixed costs could be synergized out.

Lawndale and its affiliates presently have a sizable sec. 13 filing position in PFIN and may buy or sell shares in PFIN or QEPC at any time.

Inflation Is Hitting The Entertainment Dollar As Well

prices have gone up. But, by far, going out to a movie is still one of the least expensive forms of out-of-home entertainment available. compare a pair of movie tickets and some snacks and drinks to football, basketball, baseball (are you really taking your significant other out into $9 bleacher), broadway, comedy club or other form of entertainment. "Date night" is not going away in the long run and it is the quality of movie product is what drives attendance and revenue at theater exhibition companies like Regal (RGC) and Reading (RDI) in the short run.