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
fourth quarter and full year ended December 31, 2011.
Consolidated fourth quarter 2011 revenues from continuing
operations increased 2% to $8.6 million compared with $8.4 million
for the same period a year ago. Revenues from the Company's
Ticketing Services segment, which are comprised of commissions and
fees, increased 16% to $6.9 million while revenues from the
Company's Exhibit Merchandising segment decreased 29% to $1.7
million compared to the same period a year ago. Net loss for the
fourth quarter 2011 was ($2.2 million), or ($0.09) per diluted
common share, as compared to a net income of $1.5 million, or $0.05
per diluted common share, reported for the same period a year ago.
Adjusted Earnings (as defined and explained below) for the fourth
quarter 2011, which includes adjustments for items such as goodwill
and intangible asset impairment charges, discontinued operations
and expenses related to the litigation and related legal matters
described below, were $2.0 million, or $0.08 per diluted common
share, as compared to Adjusted Earnings of $2.1 million, or $0.07
per diluted common share, reported for the same period a year
ago.
For the full year of 2011, revenues from continuing operations
increased 12% to $34.5 million compared with $30.9 million in the
same period a year ago. Revenues from the Company's Ticketing
Services segment increased 18% to $25.7 million. Revenues from the
Company's Exhibit Merchandising segment decreased 4% to $8.9
million compared to the same period a year ago. Net income for the
full year of 2011 was $29,000, or $0.00 per diluted common share,
as compared to a net loss of ($3.0 million), or ($0.10) per diluted
common share, reported for the same period a year ago. Adjusted
Earnings for the full year of 2011, which includes adjustments for
items such as goodwill and intangible asset impairment charges,
discontinued operations and expenses related to litigation and
related legal matters described below, were $8.6 million, or $0.34
per diluted common share, as compared to Adjusted Earnings of $6.2
million, or $0.20 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 $2.3 million which is included
in the $2.9 million total litigation and related legal expense
incurred for the full year 2011. Excluding the expenses incurred in
connection with litigation and related matters with Baker Street
Capital as well as others, corporate expenses, excluding non-cash
stock based compensation expense, decreased approximately $690,000,
or 20%, during the full year of 2011 as compared to the same period
a year ago.
Fourth 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,
the day after the sale.
Fourth quarter 2011 revenues from our Ticketing Services segment
increased 16% to $6.9 million compared to $5.9 million for the same
period a year ago. 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 both discount tickets and
discount dinner reservations from the same dedicated booths.
Fourth quarter 2011 operating income from our Ticketing Services
segment improved to $2.6 million, or 7%, during the quarter
compared to $2.5 million for the same period a year ago. Our
operating income improved due to the increase in revenues offset by
a slight increase in direct costs as a percentage of revenues, an
increase in selling, general and administrative expenses of
$136,000 to support our revenue growth, and an increase in
depreciation and amortization expense of $103,000 related to fixed
assets and intangible assets acquired as part of an acquisition we
completed in the first quarter of 2011.
Exhibit Merchandising Segment
Our Exhibit Merchandising segment generates the majority of its
revenues from the King Tutankhamun Exhibit Tour and, to a lesser
extent, from its Cleopatra and Real Pirates Tours. Tix's management
was recently informed by the producer of the KING TUT exhibitions
that it has been unable to secure the renewal of its current
expiring agreements with the Egyptian government to manage its two
King Tutankhamun exhibits. We determined that because the King
Tutankhamun exhibits generated the majority of Exhibit
Merchandising's merchandising revenue and operating profit in
calendar year 2011, the failure of Exhibit Merchandising to provide
the merchandising for the King Tutankhamun exhibits would
materially and negatively impact its ability to generate operating
income in the foreseeable future, barring any new business
opportunities. We are currently evaluating alternatives for this
business, including its potential sale. There are no assurances
that we will be successful in completing such a transaction in
calendar year 2012, if at all.
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.
Fourth quarter 2011 revenues from our Exhibit Merchandising
segment declined to $1.7 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." Fourth quarter 2011 operating loss from Exhibit
Merchandising was ($2.8 million) compared to ($104,000) in the same
period a year ago. In the fourth quarter 2011, we recorded a
goodwill and intangible asset impairment charge of $2.6 million.
Excluding this charge, we would have recorded an operating loss in
the fourth quarter of 2011 of ($166,000), compared to an operating
loss of ($104,000) in the same period a year ago. Excluding the
charge, our operating loss increased due to the decrease in
revenues and an increase in direct costs as a percentage of
revenues, offset by a decrease of $255,000 in selling, general and
administration expenses associated with expense reduction efforts
and the closure of our location in Cairo, Egypt due to the recent
political uncertainty within Egypt. Additionally, our depreciation
and amortization expense decreased $58,000 as certain intangible
assets became fully amortized in 2010 leaving no comparable expense
to be recorded in 2011.
Conclusion
Mitch Francis, Chief Executive Officer of the Company, stated,
"We are particularly pleased with the results generated for the
full year 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 full year 2011
specifically, we significantly improved our Adjusted Earnings,
repurchased approximately 1.3 million shares of common stock for
$2.5 million and reduced our outstanding share repurchase
obligation and acquisition note by $2.1 million. As I've stated
before, I look forward to continuing the execution of our strategic
plan, which aims to deliver value to all of 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 the Company believes is
useful to investors. The Company 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, (f) impairment of goodwill and
intangible assets, and (g) unusual litigation and bad debt related
expenses. The Company believes that Adjusted Earnings is a useful
measure of 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 as non-cash items over their remaining useful lives in
accordance with GAAP. The Company's presentation of Adjusted
Earnings may help investors assess the Company's performance before
the effect of various items that do not directly affect the
Company's ongoing operating performance. The Company also believes
that measures similar to the Company's measurement of Adjusted
Earnings are widely used in similar entertainment companies to
measure operating performance, although Adjusted Earnings as
calculated by the Company is not necessarily comparable to
similarly titled measures by such other companies. 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.
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, 2011 can be found
on the Company website at www.tixcorp.com or at www.otcqx.com.
TIX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2011 2010
------------ ------------
Assets
Current assets:
Cash $ 8,077,000 $ 8,816,000
Accounts receivable 89,000 251,000
Inventory, net 607,000 1,792,000
Prepaid expenses and other current assets 917,000 777,000
------------ ------------
Total current assets 9,690,000 11,636,000
------------ ------------
Property and equipment, net 1,676,000 1,512,000
------------ ------------
Other assets:
Intangible assets:
Goodwill 3,120,000 2,879,000
Intangibles, net 1,520,000 2,457,000
------------ ------------
Total intangible assets 4,640,000 5,336,000
Deposits and other assets 330,000 360,000
------------ ------------
Total other assets 4,970,000 5,696,000
------------ ------------
Total assets $ 16,336,000 $ 18,844,000
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $ 3,947,000 $ 3,503,000
Deferred revenue 111,000 107,000
Other current liabilities 135,000 106,000
Note payable - short term - net 584,000 -
Obligation for share purchases - short term 417,000 -
Share repurchase obligation - short term - net 2,313,000 1,707,000
------------ ------------
Total current liabilities 7,507,000 5,423,000
Note payable - net 879,000 -
Obligation for share purchases 453,000 -
Share repurchase obligation - net - 2,313,000
------------ ------------
Total liabilities 8,839,000 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; 23,669,831 shares net of 9,943,247
treasury shares, and 24,856,833 shares net of
8,606,627 treasury shares issued and
outstanding at December 31, 2011 and December
31, 2010, respectively 2,690,000 2,678,000
Additional paid-in capital 91,313,000 90,434,000
Obligation for share purchases (1,968,000) -
Cost of shares held in treasury (14,631,000) (12,084,000)
Accumulated deficit (69,893,000) (69,922,000)
Accumulated other comprehensive gain (loss) (14,000) 2,000
------------ ------------
Total stockholders' equity 7,497,000 11,108,000
------------ ------------
Total liabilities and stockholders' equity $ 16,336,000 $ 18,844,000
============ ============
TIX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
Years Ended December 31,
--------------------------
2011 2010
------------ ------------
Revenues $ 34,542,000 $ 30,882,000
------------ ------------
Operating expenses:
Direct costs of revenues 15,670,000 14,353,000
Selling, general and administrative expenses 14,078,000 12,749,000
Depreciation and amortization 1,863,000 1,660,000
Impairment of goodwill and intangible assets 2,584,000 -
------------ ------------
Total costs and expenses 34,195,000 28,762,000
------------ ------------
Income from continuing operations 347,000 2,120,000
------------ ------------
Other income (expense):
Other income (expense) (2,000) 41,000
Interest income 26,000 29,000
Interest expense (101,000) (14,000)
------------ ------------
Other income (expense), net (77,000) 56,000
------------ ------------
Income from continuing operations before income
tax expense 270,000 2,176,000
Income tax expense 43,000 -
------------ ------------
Income from continuing operations 227,000 2,176,000
------------ ------------
Discontinued operations:
Loss from operations of discontinued
operations (48,000) (5,284,000)
Gain (loss) on sale of discontinued operations (150,000) 88,000
------------ ------------
Loss on discontinued operations (198,000) (5,196,000)
------------ ------------
Net income (loss) 29,000 (3,020,000)
Other comprehensive income
Foreign currency translation adjustment (16,000) (5,000)
------------ ------------
Comprehensive income (loss) $ 13,000 $ (3,025,000)
============ ============
Net income per common share - continuing
operations
Net income per common share - continuing
operations - basic $ 0.01 $ 0.07
Net income per common share - continuing
operations - diluted $ 0.01 $ 0.07
Net loss per common share - discontinued
operations
Net loss per common share - discontinued
operations - basic $ (0.01) $ (0.17)
Net loss per common share - discontinued
operations - diluted $ (0.01) $ (0.17)
------------ ------------
Net income (loss) per common share
Net income (loss) per common share - basic $ 0.00 $ (0.10)
============ ============
Net income (loss) per common share - basic and
diluted $ 0.00 $ (0.10)
============ ============
Weighted average common shares outstanding -
basic 24,345,324 30,523,739
============ ============
Weighted average common shares outstanding -
diluted 25,080,822 30,523,739
============ ============
TIX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
Three Months Ended
December 31,
--------------------------
2011 2010
------------ ------------
(Unaudited) (Unaudited)
Revenues $ 8,575,000 $ 8,368,000
------------ ------------
Operating expenses:
Direct costs of revenues 3,881,000 3,715,000
Selling, general and administrative expenses 3,668,000 2,598,000
Depreciation and amortization 416,000 374,000
Impairment of goodwill and intangible assets 2,584,000 -
------------ ------------
Total costs and expenses 10,549,000 6,687,000
------------ ------------
Income (loss) from continuing operations (1,974,000) 1,681,000
------------ ------------
Other income (expense):
Other income (expense) (55,000) 23,000
Interest income 9,000 2,000
Interest expense (26,000) -
------------ ------------
Other income (expense), net (72,000) 25,000
------------ ------------
Income (loss) from continuing operations before
income tax expense (2,046,000) 1,706,000
Income tax benefit (7,000) -
------------ ------------
Income (loss) from continuing operations (2,039,000) 1,706,000
------------ ------------
Discontinued operations:
Loss from operations of discontinued
operations - (270,000)
Gain (loss) on sale of discontinued
operations (150,000) 88,000
------------ ------------
Loss on discontinued operations (150,000) (182,000)
------------ ------------
Net income (loss) (2,189,000) 1,524,000
Other comprehensive income
Foreign currency translation adjustment (32,000) (4,000)
------------ ------------
Comprehensive income (loss) $ (2,221,000) $ 1,520,000
============ ============
Net income (loss) per common share - continuing
operations
Net income (loss) per common share -
continuing operations - basic $ (0.09) $ 0.06
Net income (loss) per common share -
continuing operations - diluted $ (0.09) $ 0.06
Net loss per common share - discontinued
operations
Net loss per common share - discontinued
operations - basic $ (0.01) $ (0.01)
Net loss per common share - discontinued
operations - diluted $ (0.01) $ (0.01)
------------ ------------
Net income (loss) per common share
Net income (loss) per common share - basic $ (0.09) $ 0.05
============ ============
Net income (loss) per common share - basic and
diluted $ (0.09) $ 0.05
============ ============
Weighted average common shares outstanding -
basic 23,629,945 28,718,295
============ ============
Weighted average common shares outstanding -
diluted 23,629,945 28,762,688
============ ============
TIX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
Years Ended December 31,
--------------------------
2011 2010
------------ ------------
Cash flows from operating activities:
Net income (loss) $ 29,000 $ (3,020,000)
Adjustments to reconcile net income (loss)
to cash provided by operating activities:
Loss on discontinued operations 198,000 5,196,000
Depreciation 840,000 563,000
Non-cash interest 80,000 10,000
Impairment of goodwill and intangible assets 2,584,000 -
Amortization of intangible assets 1,023,000 1,095,000
Fair value of options and warrants issued to
employees and directors 891,000 479,000
Loss on disposal of fixed assets 51,000 -
Loss on advance to vendors - 991,000
Change in allowance of inventory 198,000 (73,000)
(Increase) decrease in:
Accounts receivable 162,000 (113,000)
Advances to vendors - (27,000)
Inventory 987,000 398,000
Prepaid expenses and other assets (260,000) (296,000)
Increase (decrease) in:
Accounts payable and accrued expenses 443,000 1,048,000
Deferred revenue 4,000 (26,000)
Other current liabilities 29,000 3,000
------------ ------------
Net cash provided by operating
activities from continuing operations 7,259,000 6,228,000
Net cash used in operating activities
from discontinued operations (48,000) (3,402,000)
------------ ------------
Net cash provided by operating
activities 7,211,000 2,826,000
------------ ------------
Cash flows from investing activities:
Purchases of property and equipment (166,000) (698,000)
Acquisitions, net of cash acquired (2,000,000) (1,500,000)
------------ ------------
Net cash used in investing activities (2,166,000) (2,198,000)
Net cash used in investing activities
from discontinued operations - (27,000)
------------ ------------
Net cash used in investing activities (2,166,000) (2,225,000)
------------ ------------
Cash flows from financing activities:
Cost of treasury stock, net of fees (2,546,000) (665,000)
Payment of repurchase obligation (1,770,000) -
Repayment of acquisition note (375,000) (1,000,000)
Obligation for share purchases (1,077,000) -
------------ ------------
Net cash used in financing activities (5,768,000) (1,665,000)
------------ ------------
Effect of exchange rate changes on cash (16,000) (5,000)
------------ ------------
Change in cash:
Net decrease (739,000) (1,069,000)
------------ ------------
Balance at beginning of period 8,816,000 9,885,000
------------ ------------
Balance at end of period $ 8,077,000 $ 8,816,000
============ ============
TIX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FINANCIAL INFORMATION BY SEGMENT (UNAUDITED)
TWELVE MONTHS ENDED DECEMBER 31,
Ticketing Exhibit Consolidated
Services Merchandising Corporate and Combined
----------- ------------- ----------- ------------
2011
Revenue $25,665,000 $ 8,877,000 $ - $ 34,542,000
Direct cost of revenues 10,326,000 5,344,000 - 15,670,000
Selling, general and
administrative
expenses 4,742,000 2,680,000 6,656,000 14,078,000
Impairment of goodwill
and intangible assets - 2,584,000 - 2,584,000
Depreciation and
amortization 1,117,000 709,000 37,000 1,863,000
----------- ------------- ----------- ------------
Operating income (loss)
from continuing
operations $ 9,480,000 $ (2,440,000) $(6,693,000) $ 347,000
=========== ============= =========== ============
2010
Revenue $21,678,000 $ 9,204,000 $ - $ 30,882,000
Direct cost of revenues 8,921,000 5,432,000 - 14,353,000
Selling, general and
administrative
expenses 5,822,000 2,915,000 4,012,000 12,749,000
Depreciation and
amortization 650,000 975,000 35,000 1,660,000
----------- ------------- ----------- ------------
Operating income (loss)
from continuing
operations $ 6,285,000 $ (118,000) $(4,047,000) $ 2,120,000
=========== ============= =========== ============
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 Three months
ended ended
December 31, December 31,
2011 2010
------------ ------------
Net income (loss) $ (2,189,000) $ 1,524,000
Loss from discontinued operations 150,000 182,000
Income tax benefit (7,000) -
Interest, net 17,000 (2,000)
Depreciation and amortization 416,000 374,000
Impairment of goodwill and intangible assets 2,584,000 -
Stock based compensation expense 315,000 71,000
Litigation and related legal expense 722,000 -
------------ ------------
Adjusted Earnings $ 2,008,000 $ 2,149,000
============ ============
Twelve months Twelve
ended months ended
December 31, December 31,
2011 2010
------------- ------------
Net income (loss) $ 29,000 $ (3,020,000)
Loss from discontinued operations 198,000 5,196,000
Income tax expense 43,000 -
Interest, net 75,000 (15,000)
Depreciation and amortization 1,863,000 1,660,000
Impairment of goodwill and intangible assets 2,584,000 -
Stock based compensation expense 892,000 479,000
Litigation and related legal expense 2,920,000 860,000
Loss on advance to vendor - 991,000
------------- ------------
Adjusted Earnings $ 8,604,000 $ 6,151,000
============= ============
Contact: Steve Handy CFO 818-761-1002
Tix (CE) (USOTC:TIXC)
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