SOURCE: Tix Corporation

Tix Corporation

August 15, 2012 09:00 ET

Tix Corporation Reports Second Quarter and First Six Months 2012 Results

STUDIO CITY, CA--(Marketwire - Aug 15, 2012) - Tix Corporation (the "Company") (OTCQX: TIXC) (PINKSHEETS: TIXC), a leading provider of discount ticketing services, today reported results for the second quarter and first six months ended June 30, 2012. 

The Company recently announced that it completed the sale of principally all of the assets of its subsidiary, Exhibit Merchandising, LLC. In prior periods, the Company had reported its financial results in two operating segments -- Discount Ticketing Services and Exhibit Merchandising. The financial statements for the second quarter and first six months ended June 30, 2012 reflect the reclassification of the Exhibit Merchandising segment to discontinued operations. As the Company now operates under only one operating segment, Discount Ticketing Services, it will no longer provide segment reporting. 

Our business is operated by our wholly owned subsidiary Tix4Tonight, which sells discount show tickets from ten locations 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. Each of our discount ticket locations also offers discount dinner reservations at various restaurants surrounding the Las Vegas strip and downtown, with dining at specific times on the same day or advance in some cases. 

Three Months Ended June 30, 2012 and 2011

Second quarter 2012 revenues decreased 7% to $6.2 million compared with $6.7 million for the same period a year ago. The decline in revenue is due to a general overall decrease in travel to, and consumer spending in, Las Vegas. In addition, we closed one of our discount ticket locations at the end of April 2012 due to planned demolition work being performed by the property owner. 

Second quarter 2012 direct operating expenses were $2.6 million compared with $2.6 million for the same period a year ago. Included in these expenses are payroll costs, rents, and utilities. 

Second quarter 2012 selling, general and administrative expenses were $2.7 million compared with $2.9 million for the same period a year ago. Included in these expenses are $532,000 of aggregate expenses during the second quarter of 2012 and $875,000 of aggregate expenses during the same period a year ago, in each case relating to litigation expenses, ordinary course legal expenses and expenses for certain non-recurring matters requiring legal and advisory services relating to corporate and governance matters. Excluding these expenses, selling, general and administrative expenses increased $89,000, or 4%, to $2.1 million compared to $2.0 million for the same period of the prior year. The increase in expense of $89,000 was due to an increase of $63,000 in Board of Directors' fees, an increase of $57,000 in general legal expenses, and an increase in non-cash stock based compensation expense of $92,000. These increases were offset by a decrease of $122,000 in expenses across our remaining operating accounts. 

Second quarter 2012 loss from discontinued operations was $525,000 compared to a gain from discontinued operations of $649,000 for the same period a year ago. The Company recently announced that it completed the sale of principally all of the assets and certain of the liabilities of its subsidiary, Exhibit Merchandising, LLC, for a total consideration of $125,000. The sale led to the recording of a loss on sale of discontinued operations of $244,000 and Exhibit Merchandising realized a loss from operations of $281,000, which included $77,000 of depreciation expense, for the second quarter of 2012. 

Second quarter 2012 net income was $95,000, or $0.00 per diluted common share, as compared to a net income of $1.5 million, or $0.06 per diluted common share, reported for the same period a year ago. Adjusted Earnings (as defined and explained below) for the second quarter 2012, which includes adjustments for items such as discontinued operations and expenses related to the litigation and related legal matters described below, were $1.8 million, or $0.07 per diluted common share, as compared to Adjusted Earnings of $2.2 million, or $0.09 per diluted common share, reported for the same period a year ago.

Six Months Ended June 30, 2012 and 2011

For the first six months of 2012, revenues increased 3% to $12.1 million compared with $11.8 million for the same period a year ago. The increase in revenues reflects an expansion of the number of discount ticket locations as part of our acquisition of VegasTix4Less in the first calendar quarter of 2011 offset by a general overall decrease in travel to, and consumer spending in, Las Vegas. In addition, we closed one of our discount ticket locations at the end of April 2012 due to planned demolition work being performed by the property owner. 

For the first six months of 2012, direct operating expenses were $5.4 compared to $4.9 million for the same period a year ago. Included in these expenses are payroll costs, rents, and utilities. The increase in expense of $455,000 was due to planned increases in staff payroll expense and increased rent expenses related to the expansion of the number of discount ticket locations due to our acquisition of VegasTix4Less in the middle of the first calendar quarter of 2011. 

For the first six months of 2012, selling, general and administrative expenses were $5.6 million compared with $4.8 million for the same period a year ago. Included in these expenses are $1.4 million of aggregate expenses during the first six months of 2012 and $875,000 of aggregate expenses during the same period a year ago, in each case relating to litigation expenses, ordinary course legal expenses and expenses for certain non-recurring matters requiring legal and advisory services relating to corporate and governance matters. Excluding these expenses, selling, general and administrative expenses increased $292,000, or 7%, to $4.2 million compared to $3.9 million for same period of the prior year. The increase in expense of $292,000 was due to an increase of $81,000 in Board of Directors' fees, an increase of $114,000 in general legal expenses, and an increase in non-cash stock based compensation expense of $201,000. These increases were offset by a decrease of $104,000 in expenses across our remaining operating accounts. 

For the first six months of 2012, loss from discontinued operations was $599,000 compared to a gain from discontinued operations of $145,000 for the same period a year ago. The Company recently announced that it completed the sale of principally all of the assets and certain of the liabilities of its subsidiary, Exhibit Merchandising, LLC, for a total consideration of $125,000. The sale led to the recording of a loss on sale of discontinued operations of $244,000 and Exhibit Merchandising realized a loss from operations of $355,000 which included $153,000 of depreciation expense, for the first six months of 2012. 

For the first six months of 2012, net loss was ($200,000), or ($0.01) per diluted common share, as compared to a net income of $1.6 million, or $0.06 per diluted common share, reported for the same period a year ago. Adjusted Earnings (as defined and explained below) for the first six months of 2012, which includes adjustments for items such as discontinued operations, expenses related to the litigation and related legal matters and non-routine corporate expenses related primarily to certain non-recurring matters requiring legal and advisory services described below, were $3.0 million, or $0.13 per diluted common share, as compared to Adjusted Earnings of $3.2 million, or $0.13 per diluted common share, reported for the same period a year ago.

Conclusion

Mitch Francis, Chief Executive Officer of the Company, stated, "Our second quarter 2012 revenues reflect a recent general decline in travel to, and consumer spending in, Las Vegas. In addition, we closed one of our discount ticket locations due to demolition work being performed at the site of our location by the land owner. We will continue to monitor our performance and profitability and will adjust our operations as much as possible to meet the expectations of both our customers and shareholders." 

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 expense, net, (c) income taxes, (d) depreciation and amortization charges, (e) stock based compensation expense and (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 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 a company providing discount ticketing services. It currently operates ten 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.

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 historical filings with the Securities and Exchange Commission and, since November 2010, the Company's filings with 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  
CONDENSED CONSOLIDATED BALANCE SHEETS  
   
    June 30,     December 31,  
    2012     2011  
    (Unaudited)        
Assets  
Current assets:                
  Cash   $ 4,443,000     $ 8,077,000  
  Short-term investments - U.S. Treasury securities available-for-sale     3,001,000       -  
  Accounts receivable     47,000       55,000  
  Prepaid expenses and other current assets     379,000       624,000  
  Current assets of operations held for sale     206,000       1,210,000  
    Total current assets     8,076,000       9,966,000  
                 
Property and equipment, net     1,318,000       1,399,000  
                 
Other assets:                
  Intangible assets:                
    Goodwill     3,120,000       3,120,000  
  Intangibles, net     1,261,000       1,520,000  
  Total intangible assets     4,381,000       4,640,000  
  Deposits and other assets     111,000       319,000  
  Long-term assets of operations held for sale     -       12,000  
    Total other assets     4,492,000       4,971,000  
      Total assets   $ 13,886,000     $ 16,336,000  
                 
Liabilities and Stockholders' Equity  
Current liabilities:                
  Accounts payable and accrued expenses   $ 2,436,000     $ 3,286,000  
  Deferred revenue     137,000       111,000  
  Other current liabilities     130,000       133,000  
  Note payable - short term - net     366,000       584,000  
  Obligation for share purchases - short term     415,000       417,000  
  Share repurchase obligation - short term -- net     1,164,000       2,313,000  
  Short term-liabilities of operations held for sale     349,000       663,000  
    Total current liabilities     4,997,000       7,507,000  
                 
Note payable - net     867,000       879,000  
Obligation for share purchases     245,000       453,000  
      Total liabilities     6,109,000       8,839,000  
                 
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 9,955,544 treasury shares, and 23,669,831 shares net of 9,943,247 treasury shares issued and outstanding at June 30, 2012 and December 31, 2011, respectively     2,691,000       2,690,000  
  Additional paid-in capital     91,843,000       91,313,000  
  Obligation for share purchases     (1,987,000 )     (1,968,000 )
  Cost of shares held in treasury     (14,654,000 )     (14,631,000 )
  Accumulated deficit     (70,107,000 )     (69,907,000 )
  Accumulated other comprehensive loss     (9,000 )     -  
    Total stockholders' equity     7,777,000       7,497,000  
      Total liabilities and stockholders' equity   $ 13,886,000     $ 16,336,000  
                       
                       
   
TIX CORPORATION AND SUBSIDIARIES  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED)  
             
    Three Months Ended
June 30,
 
    2012     2011  
    (Unaudited)     (Unaudited)  
                 
Revenues   $ 6,193,000     $ 6,673,000  
Operating expenses:                
    Direct costs of revenues     2,571,000       2,569,000  
    Selling, general and administrative expenses     2,651,000       2,905,000  
    Depreciation and amortization     285,000       321,000  
      Total costs and expenses     5,507,000       5,795,000  
Income from continuing operations     686,000       878,000  
Other expense:                
    Interest income     1,000       6,000  
    Interest expense     (26,000 )     (32,000 )
        Other expense, net     (25,000 )     (26,000 )
Income from continuing operations before income tax expense     661,000       852,000  
Income tax expense     41,000       -  
Income from continuing operations     620,000       852,000  
Discontinued operations:                
    Income (loss) from operations of discontinued operations     (281,000 )     649,000  
    Loss on sale of discontinued operations     (244,000 )     -  
      Gain (loss) from discontinued operations     (525,000 )     649,000  
Net income     95,000       1,501,000  
Other comprehensive loss                
    Loss on available-for-sale securities arising during period     (7,000 )     -  
Comprehensive income   $ 88,000     $ 1,501,000  
                 
Net income per common share - continuing operations                
  Net income per common share - continuing operations - basic   $ 0.03     $ 0.03  
  Net income per common share - continuing operations - diluted   $ 0.03     $ 0.03  
                 
Net income (loss) per common share - discontinued operations                
  Net income (loss) per common share - discontinued operations - basic   $ (0.02 )   $ 0.03  
  Net income (loss) per common share - discontinued operations - diluted   $ (0.02 )   $ 0.03  
                 
Net income per common share                
  Net income per common share - basic   $ 0.00     $ 0.06  
  Net income per common share - diluted   $ 0.00     $ 0.06  
                 
Weighted average common shares outstanding - basic     23,669,831       24,606,833  
Weighted average common shares outstanding - diluted     24,552,274       25,149,316  
                 
                 
   
TIX CORPORATION AND SUBSIDIARIES  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED)  
             
    Six Months Ended
June 30,
 
    2012     2011  
    (Unaudited)     (Unaudited)  
                 
Revenues   $ 12,061,000     $ 11,739,000  
Operating expenses:                
    Direct costs of revenues     5,373,000       4,918,000  
    Selling, general and administrative expenses     5,628,000       4,804,000  
    Depreciation and amortization     584,000       552,000  
      Total costs and expenses     11,585,000       10,274,000  
Income from continuing operations     476,000       1,465,000  
Other expense:                
    Other income     3,000       -  
    Interest income     13,000       9,000  
    Interest expense     (52,000 )     (48,000 )
        Other expense, net     (36,000 )     (39,000 )
Income from continuing operations before income tax expense     440,000       1,426,000  
Income tax expense     41,000       -  
Income from continuing operations     399,000       1,426,000  
Discontinued operations:                
    Income (loss) from operations of discontinued operations     (355,000 )     145,000  
    Loss on sale of discontinued operations     (244,000 )     -  
        Gain (loss) from discontinued operations     (599,000 )     145,000  
Net income (loss)     (200,000 )     1,571,000  
Other comprehensive loss                
    Loss on available-for-sale securities arising during period     (9,000 )     -  
Comprehensive income (loss)   $ (209,000 )   $ 1,571,000  
                 
Net income per common share - continuing operations                
  Net income per common share - continuing operations - basic   $ 0.02     $ 0.06  
  Net income per common share - continuing operations - diluted   $ 0.02     $ 0.06  
                 
Net income (loss) per common share - discontinued operations                
  Net income (loss) per common share - discontinued operations - basic   $ (0.03 )   $ 0.01  
  Net income (loss) per common share - discontinued operations - diluted   $ (0.03 )   $ 0.01  
                 
Net income (loss) per common share                
  Net income (loss) per common share - basic   $ (0.01 )   $ 0.06  
  Net income (loss) per common share - diluted   $ (0.01 )   $ 0.06  
                 
Weighted average common shares outstanding - basic     23,671,190       24,702,137  
Weighted average common shares outstanding - diluted     23,671,190       25,244,620  
                 
                 
   
TIX CORPORATION AND SUBSIDIARIES  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)  
   
    Six Months Ended
June 30,
 
    2012     2011  
    (Unaudited)     (Unaudited)  
Cash flows from operating activities:                
  Net income (loss)   $ (200,000 )   $ 1,571,000  
  Loss (gain) on discontinued operations     599,000       (145,000 )
  Adjustments to reconcile net income (loss) to cash provided by operating activities:                
  Depreciation     325,000       301,000  
  Non-cash interest     52,000       48,000  
  Amortization of intangible assets     259,000       251,000  
  Fair value of options and warrants issued to employees and directors     512,000       311,000  
  (Increase) decrease in:                
    Accounts receivable     8,000       92,000  
    Prepaid expenses and other assets     453,000       206,000  
  Increase (decrease) in:                
    Accounts payable and accrued expenses     (850,000 )     1,670,000  
    Deferred revenue     26,000       (7,000 )
    Other current liabilities     (3,000 )     17,000  
  Net cash provided by operating activities from continuing operations     1,181,000       4,315,000  
  Net cash provided by operating activities from discontinued operations     103,000       689,000  
    Net cash provided by operating activities     1,284,000       5,004,000  
                 
Cash flows from investing activities:                
  Purchases of property and equipment     (244,000 )     (106,000 )
  Purchase of available-for-sale securities     (3,000,000 )     -  
  Acquisitions, net of cash acquired     -       (2,000,000 )
    Net cash used in investing activities     (3,244,000 )     (2,106,000 )
                 
Cash flows from financing activities:                
  Cost of treasury stock, net of fees     (23,000 )     (375,000 )
  Payment of repurchase obligation     (1,182,000 )     (590,000 )
  Repayment of acquisition note     (250,000 )     (125,000 )
  Obligation for share purchases     (210,000 )     (870,000 )
    Net cash used in financing activities     (1,665,000 )     (1,960,000 )
                 
Loss on available-for-sale-securities held during the period     (9,000 )        
Net decrease     (3,634,000 )     938,000  
Cash balance at beginning of period     8,077,000       8,816,000  
Cash balance at end of period   $ 4,443,000     $ 9,754,000  
                 
                 
 
RECONCILIATION OF NET INCOME 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  
    June 30, 2012   June 30, 2011  
           
Net income   $ 95,000   $ 1,501,000  
Loss (gain) from discontinued operations     525,000     (649,000 )
Income tax expense     41,000     -  
Interest expense, net     25,000     26,000  
Litigation expense and non-routine legal and advisory services for corporate and governance matters     532,000     875,000  
Stock based compensation expense     257,000     165,000  
Depreciation & amortization     285,000     321,000  
               
Adjusted Earnings   $ 1,760,000   $ 2,239,000  
               
             
    Six months ended     Six months ended  
    June 30, 2012     June 30, 2011  
             
Net income (loss)   $ (200,000 )   $ 1,571,000  
Loss (gain) from discontinued operations     599,000       (145,000 )
Income tax expense     41,000       -  
Interest expense, net     39,000       39,000  
Litigation expense and non-routine legal and advisory services for corporate and governance matters     1,407,000       875,000  
Stock based compensation expense     512,000       311,000  
Depreciation & amortization     584,000       552,000  
                 
Adjusted Earnings   $ 2,982,000     $ 3,203,000  
                 
                 

Contact Information

  • Contact:
    Steve Handy
    CFO
    818-761-1002