Tix Corporation (the "Company") (OTCQX: TIXC) (PINKSHEETS: TIXC), a
leading entertainment company providing discount ticketing services
and branded event merchandising, today reported results for the
third quarter and first nine months ended September 30, 2011.
Consolidated third quarter 2011 revenues increased 14% to $9.5
million compared with $8.3 million for the same period a year ago.
Revenues from the Company's Ticketing Services segment, which are
comprised of commissions and fees, increased 20% to $7.1 million.
Revenues from the Company's Exhibit Merchandising segment were $2.4
million, which was consistent with the same period a year ago. Net
income for the third quarter 2011 was $647,000, or $0.03 per
diluted common share, as compared to a net loss of ($3.3 million),
or ($0.11) per diluted common share, reported for the same period a
year ago. Adjusted Earnings for the third quarter 2011, which
includes adjustments for items such as discontinued operations and
expenses related to the Baker Street matter described below, were
$2.8 million, or $0.11 per diluted common share, as compared to
Adjusted Earnings of $1.9 million, or $0.06 per diluted common
share, reported for the same period a year ago.
For the first nine months of 2011, revenues increased 15% to
$26.0 million compared with $22.5 million in the same period a year
ago. Both of the Company's operating segments reported increased
revenues in the first nine months of fiscal year 2011 as compared
to 2010. Ticketing Services revenues increased 19% to $18.8 million
while Exhibit Merchandising revenues increased 6% to $7.2 million.
Net income for the first nine months of 2011 was $2.2 million, or
$0.09 per diluted common share, as compared to a net loss of ($4.6
million), or ($0.15) per diluted common share, reported for the
same period a year ago. Adjusted Earnings for the first nine months
of 2011, which include adjustments for items such as discontinued
operations and expenses related to the Baker Street matter, were
$6.6 million, or $0.26 per diluted common share, as compared to
Adjusted Earnings of $4.0 million, or $0.13 per diluted common
share, reported for the same period a year ago.
In our press release dated July 27, 2011, the Company announced
that it had reached an agreement with stockholder Baker Street
Capital, L.P. In connection with the foregoing, the Company
incurred legal and other expenses of $1.3 million in the third
quarter of 2011 which is included in the $2.2 million incurred for
the first nine months of 2011, net of anticipated expense
reimbursement by the Company's insurance carrier. The Company does
not anticipate additional expenses to be incurred related to this
matter. Excluding the Baker Street related expenses, corporate
expenses decreased approximately $740,000, or 22%, during the first
nine months of 2011 as compared to the same period a year ago.
Third Quarter 2011 Segmental Operating
Results
Ticketing Services Segment
Our Ticketing Services segment is operated by our wholly-owned
subsidiary Tix4Tonight, which sells discount show tickets and
discount dinner reservations from its eleven stores in Las Vegas.
Tix4Tonight obtains its inventory of discount tickets under
short-term exclusive and non-exclusive agreements with nearly every
Las Vegas show, along with numerous attractions and tours.
Ticketing Services also offers discounted dinners reservations at
various restaurants surrounding the Las Vegas strip and downtown,
with dining at specific times on the same day or, in some cases,
days in advance.
Third quarter 2011 revenues from our Ticketing Services segment
increased 20% to $7.1 million compared to $5.9 million for the same
period a year ago. This was an exciting milestone quarter for
Tix4Tonight, as each of the three months constituted the highest
grossing ticket and dinner sales results in our history. We
attribute much of this increase to our recent acquisition of
Vegas.com's two discount ticket booths as well as overall brand
awareness. Although discounts for shows and dining are offered
utilizing other marketing channels, Tix4Tonight is now the only
company in Las Vegas offering discount tickets and discount dinner
reservations from dedicated booths.
Third quarter 2011 operating income from our Ticketing Services
segment improved to $2.8 million, or 32%, during the quarter
compared to $2.1 million for the same period a year ago. Our
operating income improved due to the increase in revenues, a
decrease in direct costs as a percentage of revenues, offset by an
increase in selling, general and administrative expenses incurred
to support our revenue growth. Our improved margins reflect our
focus on managing costs and leveraging our infrastructure as we
continue to grow our revenues.
Exhibit Merchandising Segment
Our Exhibit Merchandising segment provides branded event
merchandising through our wholly-owned subsidiary Exhibit
Merchandising. Our Exhibit Merchandising segment provides retail
specialty stores with branded merchandise for touring museum
exhibitions and touring theatrical productions. Exhibit
Merchandising owns and operates the stores that tour the world with
the two KING TUT exhibitions, produced by the exhibit arm of AEG.
The Company owns and operates complete turnkey retail stores with
commercially available and extensive custom branded products for
sale and offers exhibit and theatrical producers the opportunity
for additional revenue streams without adding the retail expertise
required to manage the operations, thereby leveraging the use of
Exhibit Merchandising's expertise and knowledge in the specialized
retail world.
Third quarter 2011 revenues from our Exhibit Merchandising
segment remained steady at $2.4 million compared to $2.4 million
for the same period a year ago. Revenue is primarily derived from
the four current exhibits titled, "Tutankhamun and The Golden Age
of the Pharaohs," "Tutankhamun the Golden King and the Great
Pharaohs," "Real Pirates: The Untold Story of the Whydah from Slave
Ship to Pirate Ship" and our exhibit "Cleopatra: The Search for the
Last Queen of Egypt."
Third quarter 2011 operating income from Exhibit Merchandising
increased to $170,000 compared to $143,000 in the same period a
year ago. The improvement in our operating margin was due primarily
to decreased selling, general and administration expenses
associated with the closure of our location in Cairo, Egypt due to
the recent political uncertainty within Egypt.
Conclusion
Mitch Francis, Chief Executive Officer of the Company, stated,
"We are particularly pleased with the results generated for the
first nine months of 2011 as they reflect the nearly immediate
benefits and enhanced stockholder value resulting from our series
of initiatives over the past twelve months. During the third
quarter 2011 specifically, we significantly improved our Adjusted
Earnings, repurchased approximately 1.1 million shares of common
stock for $2.2 million and reduced our outstanding share repurchase
obligation and acquisition note by $840,000."
Mr. Francis continued, "I look forward to continuing to execute
our strategic plan, which aims to deliver value to our
stockholders."
Investor Conference Call
The Company does not host a conference call following its
earnings release. Investors are encouraged to contact the Company's
investor relations officer, Steve Handy, CFO, at (818) 761-1002
with any questions.
Non-GAAP Financial Measure
Included in this press release is a "non-GAAP financial
measure," which is a measure of the Company's historical or future
performance that is different from measures calculated and
presented in accordance with GAAP, but that Tix Corporation
believes is useful to investors. The following discussion defines
Adjusted Earnings and presents the reasons the Company believes it
is a useful measure of the Company's performance. Tix Corporation
defines Adjusted Earnings as net income plus (a) loss on
discontinued operations, (b) interest, net, (c) income taxes, (d)
depreciation and amortization charges, (e) stock based compensation
expense and (f) unusual litigation and bad debt related expenses.
Adjusted Earnings as calculated by the Company is not necessarily
comparable to similarly titled measures by other companies. In
addition, Adjusted Earnings (a) does not represent net income or
cash flows from operations as defined by GAAP, (b) is not
necessarily indicative of cash available to fund the Company's cash
flow needs, and (c) should not be considered as an alternative to
net income, operating income, cash flows from operating activities
or the Company's other financial information as determined under
GAAP. Management believes Adjusted Earnings is useful to an
investor in evaluating the Company's operating performance because
a significant portion of its assets consists of goodwill and
intangible assets and property and equipment that are amortized and
depreciated over their remaining useful lives in accordance with
GAAP. Because amortization and depreciation are non-cash items,
management believes that presentation of Adjusted Earnings is a
useful measure of the Company's operating performance. Also,
management believes measures such as Adjusted Earnings are widely
used in the entertainment industries to measure operating
performance. Therefore, the Company presents Adjusted Earnings
because it may help investors to compare Tix Corporation's ongoing
performance before the effect of various items that do not directly
affect the Company's ongoing operating performance.
About TIX Corporation
Tix Corporation (OTCQX: TIXC) is an entertainment company
providing discount ticketing services, and event and branded
merchandising. It currently operates eleven discount ticket stores
in Las Vegas under the Tix4Tonight marquee, which offer up to a 50
percent discount for same-day shows, concerts, attractions and
sporting events, as well as discount reservations for dining. The
Company is also engaged in branded merchandise development and
sales activities related to museum exhibitions and other events,
including the King Tutankhamun, Cleopatra and Real Pirates tours as
well as selling themed souvenir memorabilia and collectors' items
in specialty stores in conjunction with the specific events and
venues.
Safe Harbor Statement
Except for the historical information contained herein, certain
matters discussed in this press release are forward-looking
statements which involve risks and uncertainties. These
forward-looking statements are based on expectations and
assumptions as of the date of this press release and are subject to
numerous risks and uncertainties which could cause actual results
to differ materially from those described in the forward-looking
statements. These risks and uncertainties are discussed in the
Company's various filings with the Securities and Exchange
Commission and the OTCQX. The Company assumes no obligation to
update these forward-looking statements. A copy of the Company's
report for the twelve months ended December 31, 2010 can be found
on the Company website at www.tixcorp.com or at www.otcqx.com.
TIX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2011 2010
------------- -------------
(Unaudited)
Assets
Current assets:
Cash $ 5,861,000 $ 8,816,000
Accounts receivable 150,000 251,000
Inventory, net 1,256,000 1,792,000
Prepaid expenses and other current assets 963,000 777,000
------------- -------------
Total current assets 8,230,000 11,636,000
------------- -------------
Property and equipment, net 1,975,000 1,512,000
------------- -------------
Other assets:
Intangible assets:
Goodwill 4,679,000 2,879,000
Intangibles, net 2,660,000 2,457,000
------------- -------------
Total intangible assets 7,339,000 5,336,000
Deposits and other assets 368,000 360,000
------------- -------------
Total other assets 7,707,000 5,696,000
------------- -------------
Total assets $ 17,912,000 $ 18,844,000
============== ==============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 545,000 $ 2,603,000
Accrued expenses 2,364,000 900,000
Deferred revenue 125,000 107,000
Other current liabilities 130,000 106,000
Share repurchase obligation - net 2,297,000 1,707,000
Note payable - net 459,000 -
------------- -------------
Total current liabilities 5,920,000 5,423,000
------------- -------------
Long term liabilities:
Share repurchase obligation - net 590,000 2,313,000
Note payable - net 994,000 -
------------- -------------
Total long term liabilities 1,584,000 2,313,000
------------- -------------
Total liabilities 7,504,000 7,736,000
------------- -------------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value; 500,000
shares authorized; none issued
Common Stock, $.08 par value; 100,000,000
shares authorized; 23,589,945 shares net
of 9,932,707 treasury shares, and
24,856,833 shares net of 8,606,627
treasury shares issued and outstanding at
September 30, 2011 and December 31, 2010,
respectively 2,683,000 2,678,000
Additional paid-in capital 91,007,000 90,434,000
Advances for share purchases (985,000) -
Cost of shares held in treasury (14,611,000) (12,084,000)
Accumulated deficit (67,704,000) (69,922,000)
Accumulated other comprehensive gain 18,000 2,000
------------- -------------
Total stockholders' equity 10,408,000 11,108,000
------------- -------------
Total liabilities and stockholders'
equity $ 17,912,000 $ 18,844,000
============== ==============
TIX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS) (UNAUDITED)
Three Months Ended
September 30,
-------------------------
2011 2010
------------ ------------
Revenues $ 9,475,000 $ 8,305,000
------------ ------------
Operating expenses:
Direct costs of revenues 4,137,000 3,876,000
Selling, general and administrative expenses 3,863,000 2,582,000
Stock based compensation expense 266,000 171,000
Depreciation and amortization 493,000 398,000
------------ ------------
Total costs and expenses 8,759,000 7,027,000
------------ ------------
Operating income 716,000 1,278,000
------------ ------------
Other:
Other income (expense) - 23,000
Interest income 8,000 2,000
Interest expense (27,000) -
------------ ------------
Other income, net (19,000) 25,000
------------ ------------
Income from continuing operations before income
tax expense 697,000 1,303,000
Income tax expense 50,000 -
------------ ------------
Income from continuing operations 647,000 1,303,000
Loss from discontinued operations - (4,601,000)
--------------------------
Net income (loss) 647,000 (3,298,000)
Other comprehensive income (loss) 19,000 (17,000)
------------ ------------
Comprehensive income (loss) $ 666,000 $ (3,315,000)
============ ============
Net income per common share - continuing
operations
Net income per common share - continuing
operations - basic $ 0.03 $ 0.04
Net income per common share - continuing
operations - diluted $ 0.03 $ 0.04
Net loss per common share - discontinued
operations
Net loss per common share - discontinued
operations - basic $ 0.00 $ (0.15)
Net loss per common share - discontinued
operations - diluted $ 0.00 $ (0.15)
------------ ------------
Net income per common share
Net income per common share - basic $ 0.03 $ (0.11)
============ ============
Net income per common share - diluted $ 0.03 $ (0.11)
============ ============
Weighted average common shares outstanding - basic 24,355,987 31,123,357
============ ============
Weighted average common shares outstanding -
diluted 25,233,355 31,123,357
============ ============
TIX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS) (UNAUDITED)
Nine Months Ended
September 30,
-------------------------
2011 2010
------------ ------------
Revenues $ 25,967,000 $ 22,514,000
------------ ------------
Operating expenses:
Direct costs of revenues 11,789,000 10,638,000
Selling, general and administrative expenses 9,833,000 9,743,000
Stock based compensation expense 577,000 408,000
Depreciation and amortization 1,447,000 1,286,000
------------ ------------
Total costs and expenses 23,646,000 22,075,000
------------ ------------
Operating income 2,321,000 439,000
------------ ------------
Other:
Other income 53,000 13,000
Interest income 17,000 22,000
Interest expense (75,000) (3,000)
------------ ------------
Other income (expense), net (5,000) 32,000
------------ ------------
Income from continuing operations before income
tax expense 2,316,000 471,000
Income tax expense 50,000 -
------------ ------------
Income from continuing operations 2,266,000 471,000
Loss from discontinued operations (48,000) (5,074,000)
------------ ------------
Net income (loss) 2,218,000 (4,603,000)
Other comprehensive income (loss) 16,000 (1,000)
------------ ------------
Comprehensive income (loss) $ 2,234,000 $ (4,604,000)
============ ============
Net income per common share - continuing
operations
Net income per common share - continuing
operations - basic $ 0.09 $ 0.02
Net income per common share - continuing
operations - diluted $ 0.09 $ 0.02
Net loss per common share - discontinued
operations
Net loss per common share - discontinued
operations - basic $ (0.00)$ (0.16)
Net loss per common share - discontinued
operations - diluted $ (0.00)$ (0.16)
------------ ------------
Net income per common share
Net income per common share - basic $ 0.09 $ (0.15)
============ ============
Net income per common share - diluted $ 0.09 $ (0.15)
============ ============
Weighted average common shares outstanding -
basic 24,585,410 31,123,357
============ ============
Weighted average common shares outstanding -
diluted 25,351,477 31,123,357
============ ============
TIX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Ended
September 30,
-------------------------
2011 2010
------------ ------------
Cash flows from operating activities:
Net income (loss): $ 2,218,000 $ (4,603,000)
Adjustments to reconcile net income to cash
provided by operating activities:
Loss from discontinued operations 48,000 5,074,000
Depreciation 650,000 413,000
Amortization of intangible assets 797,000 872,000
Loss on disposal of fixed assets 51,000 -
Non-cash imputed interest expense 75,000 -
Fair value of options issued to employee and
directors 577,000 408,000
Loss on advance to vendors - 991,000
Change in allowance of inventory 72,000 (56,000)
(Increase) decrease in:
Accounts receivable 101,000 85,000
Advances to vendors - (27,000)
Inventory 464,000 278,000
Prepaid expenses and other current assets (194,000) 387,000
Increase (decrease) in:
Accounts payable and accrued expenses (594,000) 1,651,000
Deferred revenue 18,000 11,000
Other current liabilities 24,000 64,000
------------ ------------
Net cash provided by operating activities
from continuing operations 4,307,000 5,548,000
Net cash used in operating activities from
discontinued operations (48,000) (3,267,000)
------------ ------------
Net cash provided by operating activities 4,259,000 2,281,000
------------ ------------
Cash flows from investing activities:
Purchases of property and equipment (164,000) (493,000)
Cash used for acquisitions (2,000,000) (1,500,000)
------------ ------------
Net cash used in investing activities from
continuing operations (2,164,000) (1,993,000)
Net cash used in investing activities from
discontinued operations - (27,000)
------------ ------------
Net cash used in investing activities (2,164,000) (2,020,000)
------------ ------------
Cash flows from financing activities:
Cost of treasury stock (2,526,000) -
Payment of repurchase obligation (1,180,000) -
Payment of acquisition note (375,000) (1,000,000)
Advances for share purchases (985,000) -
------------ ------------
Net cash used in financing activities from
continuing operations (5,066,000) (1,000,000)
------------ ------------
Net cash used in financing activities (5,066,000) (1,000,000)
------------ ------------
Effect of exchange rate changes on cash 16,000 (1,000)
Change in cash:
Net (decrease) increase (2,955,000) (740,000)
Balance at beginning of period 8,816,000 9,885,000
------------ ------------
Balance at end of period $ 5,861,000 $ 9,145,000
============ ============
TIX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS FINANCIAL INFORMATION BY SEGMENT
(UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30,
Ticketing Exhibit Consolidated
Services Merchandising Corporate and Combined
----------- -------------- ----------- -------------
2011
Revenue $ 7,074,000 $ 2,401,000 $ - $ 9,475,000
Direct cost of
revenues 2,720,000 1,417,000 - 4,137,000
Selling, general and
administrative
expenses 1,208,000 637,000 2,018,000 3,863,000
Stock based
compensation expense - - 266,000 266,000
Depreciation and
amortization 307,000 177,000 9,000 493,000
---------- ------------- ---------- ------------
Operating income
(loss) $ 2,839,000 $ 170,000 $(2,293,000) $ 716,000
========== ============= ========== ============
2010
Revenue $ 5,906,000 $ 2,399,000 $ - $ 8,305,000
Direct cost of
revenues 2,556,000 1,320,000 - 3,876,000
Selling, general and
administrative
expenses 1,029,000 726,000 827,000 2,582,000
Stock based
compensation expense - - 171,000 171,000
Depreciation and
amortization 178,000 210,000 10,000 398,000
---------- ------------- ---------- ------------
Operating income
(loss) $ 2,143,000 $ 143,000 $(1,008,000) $ 1,278,000
========== ============= ========== ============
TIX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS FINANCIAL INFORMATION BY SEGMENT
(UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30,
Ticketing Exhibit
Services Merchandising Corporate Consolidated
----------- -------------- ----------- -------------
2011
Revenue $18,813,000 $ 7,154,000 $ - $ 25,967,000
Direct cost of
revenues 7,638,000 4,151,000 - 11,789,000
Selling, general and
administrative
expenses 3,503,000 2,114,000 4,216,000 9,833,000
Stock based
compensation expense - - 577,000 577,000
Depreciation and
amortization 840,000 579,000 28,000 1,447,000
---------- ------------- ---------- ------------
Operating income
(loss) $ 6,832,000 $ 310,000 $(4,821,000) $ 2,321,000
========== ============= ========== ============
2010
Revenue $15,747,000 $ 6,767,000 $ - $ 22,514,000
Direct cost of
revenues 6,738,000 3,900,000 - 10,638,000
Selling, general and
administrative
expenses 4,719,000 2,094,000 2,930,000 9,743,000
Stock based
compensation expense - - 408,000 408,000
Depreciation and
amortization 476,000 787,000 23,000 1,286,000
---------- ------------- ---------- ------------
Operating income
(loss) $ 3,814,000 $ (14,000) $(3,361,000) $ 439,000
========== ============= ========== ============
TIX CORPORATION AND SUBSIDIARIES
TIX RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EARNINGS
(UNAUDITED)
The following table set forth a reconciliation of consolidated
net income to consolidated Adjusted Earnings:
Three months ended Three months ended
September 30, 2011 September 30, 2010
------------------ ------------------
Net income (loss) $ 647,000 $ (3,298,000)
Income tax expense 50,000 -
Loss from discontinued operations - 4,601,000
Interest, net 19,000 (2,000)
Litigation expense 1,323,000 -
Stock based compensation expense 266,000 171,000
Depreciation & amortization 493,000 398,000
----------------- -----------------
Adjusted Earnings $ 2,798,000 $ 1,870,000
================= =================
Nine months ended Nine months ended
September 30, 2011 September 30, 2010
------------------ ------------------
Net income (loss) $ 2,218,000 $ (4,603,000)
Income tax expense 50,000 -
Loss from discontinued operations 48,000 5,074,000
Interest, net 58,000 (19,000)
Litigation expense 2,198,000 910,000
Loss on advance to vendor - 991,000
Stock based compensation expense 577,000 408,000
Depreciation & amortization 1,447,000 1,286,000
----------------- -----------------
Adjusted Earnings $ 6,596,000 $ 4,047,000
================= =================
Contact: Steve Handy CFO 818-761-1002
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