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In a recent SEC filing, Reading International Inc., a motion picture theater company with a market capitalization of $28 million, disclosed that financial statements for two quarters of 2024 should not be relied upon due to accounting errors. The announcement, made on March 25, 2025, identified a $3.6 million misstatement related to the improper handling of an accounts payable and accrued expenses liability. According to InvestingPro data, the company is currently facing significant financial challenges, with revenue declining by 12% in the last twelve months.
The Audit and Conflicts Committee, along with company management, discovered the error during the year-end 2024 reporting process. They determined that the liability, which had been removed, should have remained under Generally Accepted Accounting Principles (GAAP). As a consequence, the company recognized that internal controls over financial reporting were not effective for the periods ending June 30 and September 30, 2024. This comes at a challenging time for Reading International, as InvestingPro analysis shows the company’s current ratio at 0.42, indicating potential liquidity concerns with short-term obligations exceeding liquid assets.
Reading International will be amending their previous filings to correct the financial statements for the affected quarters and to revise Management’s Discussion and Analysis and the evaluation of disclosure controls and procedures for those periods.
The company’s independent registered public accounting firm, Grant Thornton, has been apprised of these developments. Reading International, which trades on The NASDAQ Stock Market LLC under the symbols (NASDAQ:RDI) and (NASDAQ:RDIB), is taking steps to address the material weakness identified in its financial reporting process.
The SEC filing ensures transparency with investors and regulatory compliance, as Reading International works to rectify the financial misstatements and reinforce its internal controls. The company has not provided additional commentary on the operational or financial impact of the restatements. This information is based on a press release statement. For investors seeking comprehensive analysis, InvestingPro offers detailed financial health metrics and 12 additional ProTips for Reading International, including crucial insights about the company’s debt structure and cash flow patterns.
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