Release Date: November 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: How many more auditoriums are planned for additions of recliners, and when will the reseating program be completed? A: In the US, we plan to convert 23 screens to luxury recliners in three theaters over the next 24 months. This would result in almost 70% of our existing US circuit featuring recliners. We also intend to create a premium screen concept in each of those theaters. In Australia and New Zealand, we are targeting similar conversions over the next two years, subject to successful negotiations with landlords, an improved movie slate, and a stronger liquidity position.
Q: What needs to happen for the company to achieve results in the US similar to Q2 and Q3 of 2023, considering the screen fleet is 10% smaller? A: Despite the reduction in revenues, we believe that streamlining our US circuit will boost our overall theater level cash flow in the long run. We expect stronger results in the future based on CapEx improvements, the rollout of rewards and premium membership programs, and a better movie slate expected for 2025 and beyond. The US Specialty circuit's box office was off 32% quarter versus quarter, but we believe it can produce strong results again, driven by film product.
Q: Has any thought been given to selling the US cinema circuit, considering the oversaturation in the US? A: We anticipate a much stronger movie slate from 2025 and beyond, and even the holiday season in 2024. We expect our US circuit to return to producing acceptable levels of income, contributing to the overall advancement of our global enterprise. While the US market is generally over-screened, we believe our remaining US theaters will return to income-producing in 2025 and beyond, considering the improved movie schedule and strategic initiatives like CapEx upgrades and the rollout of rewards and membership programs.
Q: Do you expect to refinance the Santander loan secured by the Minetta Lane and Orpheum Theaters, and what are the expected interest rate changes? A: We are exploring options with different lenders to ensure it is in the best interest of the company and shareholders. We are optimistic about interest rates trending downwards, following recent rate cuts by the Fed. We aim to work with lenders that provide flexibility in terms of interest rate floors, fees, and covenants to reduce our interest expenses.
Q: What are your plans and sources of capital for the $5.9 million purchase price due for the Village East Ground lease? A: We are working on a transaction to complete the acquisition of the remaining New York City property, the tenant's interest in the Village East ground lease. Our CFO and General Counsel are developing a mutually agreeable transaction with the non-co-partner of Sutton Hill. While no assurances can be given, we anticipate reporting on a deal during our Q4 reporting period.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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