Investors gave Reading International Inc. a standing ovation last week after the West L.A. movie theater operator announced record-breaking results for the second quarter.
Reading earned $22.7 million (69 cents a share) before interest, taxes, depreciation and amortization on revenue of $72.8 million in the quarter ended June 30, the company announced this month.
Those earnings, nearly 71 percent higher than the same quarter last year, enticed investors to swarm the company’s shares, sending the stock up 7 percent for the week ended Aug. 12 to close at $13.04, making it one of the biggest gainers on the LABJ Stock Index.
An uptick in attendance at the movie theaters Reading operates in the United States, Australia and New Zealand was a major factor in the company’s success last quarter, Chief Financial Officer Dev Ghose said in a press release.
Ghose did not return a call seeking further comment.
Despite last quarter’s theatrical gains, a dramatic family feud over the company’s ownership could hinder Reading in the near future.
The company’s longtime leader, James J. Cotter Sr., died last year at 76, setting off an ugly battle among his children that has raised concerns from shareholders.
James J. Cotter Jr. took the reins as chief executive about a month before his father died. But in June, Reading’s board of directors voted to oust him. His sister, Ellen Marie Cotter, has since taken over as interim chief executive.
But the ousted exec has not gone down without a fight. He sued Reading and its board – including his other sister, Margaret, who serves as a director – in federal court, claiming a breach of fiduciary duty.
Some shareholders are less than amused by the Cotter siblings’ feud. Last week, shareholders Whitney Tilson and Jonathan Glaser asked the court to prevent Reading and its board from causing further damage to the company’s investors.
“While I am pleased that second-quarter earnings were strong, I’m concerned by the actions of the board and the ongoing family dispute,” Glaser said in a statement. “Both the board and the family must recognize that this is a public company, and as such, they have a duty as fiduciaries to all shareholders.”
