SOURCE: Tix Corporation

Tix Corporation

May 10, 2016 08:00 ET

Tix Corporation Reports First Quarter 2016 Results

STUDIO CITY, CA--(Marketwired - May 10, 2016) - Tix Corporation (the "Company") (OTCQX: TIXC), a leading provider of discount ticketing services, today reported results for the first quarter ended March 31, 2016. 

Mitch Francis, Chief Executive Officer of the Company, stated, "Our financial performance during the period, which has historically been our slowest period of the year, included two timing differences, which we have now anniversaried and should no longer impact our year-over-year comparisons. During the second quarter of 2015 we began selling tickets to two low-priced attractions that have proved very successful with our customers, but resulted in lower average revenue per ticket. Additionally, our direct operating expenses for the first quarter of 2016 included higher hourly payroll expenses, following a wage increase implemented late in the first quarter last year."

Mr. Francis continued, "We are focused on providing our customers with a variety of discount tickets to the most popular shows and attractions in Las Vegas. We anticipate this focus will result in another year of solid financial performance and cash generation following a successful 2015. Our positive outlook allowed us to recently announce a 10% increase to our quarterly dividend program with the goal of enhancing the total return for our shareholders. At the same time, we remain focused on executing prudent growth strategies that capitalize on our Company's leadership position in the Las Vegas market, such as the Agreement we announced last week with Expedia LX Partner Business, Inc., doing business as Expedia Local Expert, a division of Expedia, Inc., one of the world's largest online travel agencies. Our role as Expedia's Official Las Vegas Guest Services Partner capitalizes on our existing operations and will cater to the large number of Las Vegas visitors who book their travel through Expedia brands." 

First Quarter 2016 Results

First quarter 2016 revenues were $5,417,000 compared with $5,550,000 in the same period a year ago.

First quarter 2016 direct operating expenses, which includes payroll costs, rents, and utilities, increased $289,000 to $2,595,000 compared with $2,306,000 for the same period a year ago. The increase in direct operating expenses was due to increased locations in operation as compared to the same period a year ago and higher hourly payroll costs reflecting a wage increase implemented in late February 2015. 

First quarter 2016 selling, general and administrative expenses decreased $91,000 to $1,944,000 compared with $2,035,000 for the same period a year ago. Selling, general and administrative expenses, as a percentage of revenues, improved to 36% compared with 37% for the same period a year ago. 

First quarter 2016 provision for income taxes was $252,000, as compared to $61,000 reported for the same period a year ago. In December 2015, the Company recorded a deferred tax asset in the amount of $11,531,000 and began recording a provision for income taxes in the first quarter of 2016 using a federal income tax rate of 34% which reduced the Company's deferred tax asset balance accordingly. During the same period of the prior year, the Company's provision for income taxes included only estimated corporate alternative minimum taxes under the federal tax code. 

First quarter 2016 net income was $488,000, or $0.03 per diluted common share, as compared to net income of $963,000, or $0.05 per diluted common share reported for the same period a year ago. Excluding the impact of our provision for income taxes discussed above, net income was approximately $710,000, or $0.04 per diluted share, as compared to net income of $963,000, or $0.05 per diluted share, reported for the same period a year ago. Adjusted EBITDA (as defined and explained below) for the first quarter of 2016, decreased $335,000 to $971,000, or $0.05 per diluted common share, as compared to Adjusted EBITDA of $1,306,000, or $0.07 per diluted common share, reported for the same period a year ago.

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 EBITDA as net income plus (a) income taxes (b) other expenses, net, (c) depreciation and amortization charges, (d) stock based compensation expense, (e) loss on disposition of property and equipment, (f) unusual litigation, and (g) expenses for certain non-recurring matters requiring legal and advisory services relating to corporate and governance matters. The Company believes that Adjusted EBITDA 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 EBITDA 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 EBITDA are widely used in similar entertainment companies to measure operating performance, although Adjusted EBITDA as calculated by the Company is not necessarily comparable to similarly titled measures by such other companies. Adjusted EBITDA (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) provides discount ticketing services. It currently operates 11 discount ticket stores in Las Vegas under its Tix4Tonight marquee, which offers up to a 50 percent discount for same-day shows, concerts, attractions and sporting events, as well as discount reservations for dining.

Stockholder Rights Agreement

On January 2, 2014, the Company announced that its Board of Directors adopted an amendment of the Company's Stockholder Rights Agreement (the "Rights Agreement") to protect the interests of all Company stockholders by lowering the beneficial ownership threshold to a level that could help preserve the value of the Federal Net Operating Loss Carry Forwards ("NOLs"). The Company's ability to use the NOLs would be substantially limited if there were an "ownership change" as defined under Section 382 of the U.S. Internal Revenue Code and related U.S. Treasury regulations ("Section 382"). In general, an "ownership change" would occur under Section 382 if the Company's "5-percent shareholders," as defined under Section 382, collectively increase their ownership in the Company by more than 50 percentage points over a rolling three-year period.

Under the terms of the amended and restated Rights Agreement, subject to certain exceptions, in the event a person or group, without Board approval, acquires beneficial ownership of 4.95% or more of the outstanding Common Stock or announces a tender or exchange offer which would result in such person or group's beneficial ownership of 4.95% or more of the outstanding Common Stock (a "Triggering Stockholder"), then all stockholders of the Company (other than the Triggering Stockholder) will be entitled to acquire shares of Common Stock at a 50% discount (a "Dilution Event"). 

A person or group that owns 4.95% or more of the outstanding Common Stock at the time of the adoption of the amended and restated Rights Agreement (an "Existing Major Stockholder") will not trigger a Dilution Event. However, a Dilution Event will be triggered if an Existing Major Stockholder, without Board approval, acquires any additional shares of Common Stock. 

The 4.95% beneficial ownership threshold under the amended and restated Rights Agreement will remain applicable until March 31, 2021, or earlier, if the Board determines that the reduced threshold is no longer necessary for the preservation of the NOLs.

The foregoing description of the amended and restated Rights Agreement is qualified in its entirety by reference to the full text of the amended and restated Rights Agreement, a copy of which is available on the Company's website.

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. Forward-looking statements include, but are not limited to, statements about our future revenues and financial position. 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 filings with the OTCQX. The Company assumes no obligation to update these forward-looking statements. A copy of the Company's reports for the twelve months ended December 31, 2015 can be found on the Company website at www.tixcorp.com or at www.otcqx.com.

   
TIX CORPORATION AND SUBSIDIARY  
CONDENSED CONSOLIDATED BALANCE SHEETS  
           
  March 31, 2016     December 31, 2015  
  (Unaudited)        
Assets  
Current assets:  
  Cash $ 7,205,000     $ 7,921,000  
  Accounts receivable   45,000       47,000  
  Prepaid expenses and other current assets   241,000       122,000  
    Total current assets   7,491,000       8,090,000  
               
Property and equipment, net   485,000       579,000  
               
Other assets:              
  Intangible assets:              
    Goodwill   3,120,000       3,120,000  
    Intangibles, net   -       17,000  
    Total intangible assets   3,120,000       3,137,000  
  Deferred tax asset   11,280,000       11,531,000  
  Deposits and other assets   66,000       66,000  
    Total other assets   14,466,000       14,734,000  
      Total assets $ 22,442,000     $ 23,403,000  
               
Liabilities and Stockholders' Equity  
Current liabilities:              
  Accounts payable - shows and events $ 1,306,000     $ 1,140,000  
  Accounts payable and accrued expenses   745,000       1,390,000  
  Deferred revenue   44,000       25,000  
  Note payable - short term and net of discount   176,000       176,000  
    Total current liabilities   2,271,000       2,731,000  
               
Deferred rent obligations   51,000       58,000  
Note payable - net of current portion and discount   182,000       376,000  
Total liabilities   2,504,000       3,165,000  
               
Stockholders' equity:              
  Preferred stock, $.01 par value; 500,000 shares authorized; none issued           -  
  Common stock, $.08 par value; 100,000,000 shares authorized; 17,293,172 shares net of 16,627,245 treasury shares, and 17,280,009 shares net of 16,619,953 treasury shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively   2,715,000       2,713,000  
  Additional paid-in capital   94,307,000       94,216,000  
  Cost of stock held in treasury   (28,131,000 )     (28,115,000 )
  Accumulated deficit   (48,953,000 )     (48,576,000 )
    Total stockholders' equity   19,938,000       20,238,000  
      Total liabilities and stockholders' equity $ 22,442,000     $ 23,403,000  
                     
                     
                     
TIX CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
       
  Three Months Ended March 31,
  2016   2015
  (Unaudited)   (Unaudited)
       
Revenues $ 5,417,000   $ 5,550,000
Operating expenses:          
  Direct costs of revenues   2,595,000     2,306,000
  Selling, general and administrative expenses   1,944,000     2,035,000
  Depreciation and amortization   133,000     179,000
    Total costs and expenses   4,672,000     4,520,000
Operating income   745,000     1,030,000
Other expense:          
  Interest expense   5,000     6,000
    Other expense, net   5,000     6,000
Income before provision for income taxes   740,000     1,024,000
Provision for income taxes   252,000     61,000
Net income $ 488,000   $ 963,000
           
Net income per common share          
  Net income per common share - basic $ 0.03   $ 0.05
  Net income per common share - diluted $ 0.03   $ 0.05
           
Weighted average common shares outstanding - basic   17,292,304     17,561,021
Weighted average common shares outstanding - diluted   17,993,116     17,975,424
           
           
           
TIX CORPORATION AND SUBSIDIARY  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 
     
  Three Months Ended March 31,  
  2016     2015  
  (Unaudited)     (Unaudited)  
Cash flows from operating activities:              
  Net income $ 488,000     $ 963,000  
    Adjustments to reconcile net income to net cash provided by operating activities:              
    Imputed interest   6,000       6,000  
    Depreciation   116,000       119,000  
    Amortization of intangible assets   17,000       61,000  
    Stock based compensation   93,000       97,000  
    Deferred tax asset   251,000       -  
    (Increase) decrease in:              
      Accounts receivable   2,000       (23,000 )
      Prepaid expenses and other assets   (119,000 )     (136,000 )
    Increase (decrease) in:              
      Accounts payable - shows and events   166,000       1,291,000  
      Accounts payable and accrued expenses   (645,000 )     (393,000 )
      Deferred revenue   19,000       29,000  
      Deferred rent obligations   (7,000 )     (36,000 )
        Net cash provided by operating activities   387,000       1,978,000  
               
Cash flows from investing activities:              
  Purchases of property and equipment   (22,000 )     (26,000 )
        Net cash used in investing activities   (22,000 )     (26,000 )
               
Cash flows from financing activities:              
  Dividends paid   (865,000 )     -  
  Payment on note payable   (200,000 )     (200,000 )
  Cost of treasury stock   (16,000 )     -  
  Obligation for share purchases   -       (159,000 )
        Net cash used in financing activities   (1,081,000 )     (359,000 )
               
  Net (decrease) increase in cash   (716,000 )     1,593,000  
  Cash, beginning of period   7,921,000       4,866,000  
  Cash, end of period $ 7,205,000     $ 6,459,000  
               
Supplemental disclosures of cash flow information:              
Cash paid for:              
  Income taxes $ 1,000     $ 87,000  
  Interest $ -     $ -  
                 
 
 
TIX CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA
(UNAUDITED)
 

The following is a reconciliation of net income to Adjusted EBITDA for the three months ended March 31, 2016 and 2015, respectively:

   
  Three Months Ended March 31,
  2016   2015
  (Unaudited)   (Unaudited)
Net income $ 488,000   $ 963,000
Provision for income taxes   252,000     61,000
Other expense, net   5,000     6,000
Depreciation and amortization expense   133,000     179,000
Stock based compensation expense   93,000     97,000
Adjusted EBITDA $ 971,000   $ 1,306,000
           

Contact Information

  • Investor Contacts:

    Steve Handy
    CFO
    (818)761-1002


    EVC Group, Inc.
    Doug Sherk
    (415)652-9100
    Brian Moore
    (310)579-6199