SOURCE: Tix Corporation

Tix Corporation

August 14, 2013 09:00 ET

Tix Corporation Reports Second Quarter and First Six Months 2013 Results

STUDIO CITY, CA--(Marketwired - Aug 14, 2013) - Tix Corporation (the "Company") (OTCQX: TIXC), a leading provider of discount ticketing services, today reported results for the second quarter and first six months ended June 30, 2013.

Tix Corporation's business is operated by its wholly owned subsidiary Tix4Tonight, which sells discount show tickets from eleven 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. The majority of our discount ticket locations also offer discount dinner reservations at various restaurants surrounding the Las Vegas strip and downtown.

Three Months Ended June 30, 2013 and 2012

Second quarter 2013 revenues decreased 17% to $5.2 million compared with $6.2 million for the same period a year ago. The decline in revenues of $1.0 million was caused by large scale construction and renovation projects on the Las Vegas strip requiring us to close two of our discount ticket locations; one in April 2012 and another in February 2013. Revenues were also negatively impacted by the continued general decrease in consumer spending in Las Vegas.

Second quarter 2013 direct operating expenses decreased 17% to $2.1 million compared with $2.6 million for the same period a year ago. Included in these expenses are payroll costs, rents, and utilities. The decrease in expense of $439,000 was due to $169,000 in reduced rents and utilities expense and $125,000 in reduced payroll costs realized in connection with the closure of two of our discount ticket locations as discussed above, and $145,000 in reduced rents at one of our discount ticket locations in the second half of calendar year 2012.

Second quarter 2013 selling, general and administrative expenses were $2.1 million compared with $2.7 million for the same period a year ago. Included in these expenses are $220,000 of aggregate expenses during the first three months of 2013 and $532,000 of aggregate expenses during the same period a year ago, in each case relating to expenses for certain non-recurring matters requiring legal and advisory services relating to corporate and governance matters and litigation expenses. Excluding these expenses, selling, general and administrative expenses decreased $208,000, or 10%, to $1.9 million compared to $2.1 million for the same period of the prior year. The decrease in expenses of $208,000 was realized in connection with the closure of two of our discount ticket locations as discussed above and our continual efforts to manage our overall expenses.

Second quarter 2013 net income was $579,000, or $0.02 per diluted common share, as compared to a net income of $95,000, or $0.00 per diluted common share, reported for the same period a year ago. Adjusted Earnings (as defined and explained below) for the second quarter 2013, which includes adjustments for items such as discontinued operations and expenses related to litigation and related legal matters described below, was $1.4 million, or $0.06 per diluted common share, as compared to Adjusted Earnings of $1.8 million, or $0.07 per diluted common share, reported for the same period a year ago.

Six Months Ended June 30, 2013 and 2012

For the first six months of 2013, revenues decreased 13% to $10.4 million compared with $12.1 million for the same period a year ago. The decline in revenues of $1.6 million was caused by large scale construction and renovation projects on the Las Vegas strip requiring us to close two of our discount ticket locations; one in April 2012 and another in February 2013. Revenues were also negatively impacted by the continued general decrease in consumer spending in Las Vegas.

For the first six months of 2013, direct operating expenses decreased 17% to $4.5 million compared with $5.4 million for the same period a year ago. The decrease in expense of $906,000 was due to $301,000 in reduced rents and utilities expense and $315,000 in reduced payroll costs realized in connection with the closure of two of our discount ticket locations as discussed above, and $290,000 in reduced rents at one of our discount ticket locations in the second half of calendar year 2012.

For the first six months of 2013, selling, general and administrative expenses were $4.5 million compared with $5.6 million for the same period a year ago. Included in these expenses are $620,000 of aggregate expenses during the first six months of 2013 and $1.4 million of aggregate expenses during the same period a year ago, in each case relating to expenses for certain non-recurring matters requiring legal and advisory services relating to corporate and governance matters and litigation expenses. Excluding these expenses, selling, general and administrative expenses decreased $317,000, or 8%, to $3.9 million compared to $4.2 million for the same period of the prior year. The decrease in expenses of $317,000 was realized in connection with the closure of two of our discount ticket locations as discussed above and our continual efforts to manage our overall expenses.

For the first six months of 2013, net income was $816,000, or $0.03 per diluted common share, as compared to a net loss of ($200,000), or ($0.01) 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 2013, which includes adjustments for items such as discontinued operations and expenses related to litigation and related legal matters described below, was $2.6 million, or $0.11 per diluted common share, as compared to Adjusted Earnings of $3.0 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, "We opened two new locations during July and August of 2013. These locations are placed at highly trafficked pedestrian walkways and intersections and we are hopeful that these new locations will counter the negative impact during the first half of 2013 resulting from the closure of one of our locations in April 2012 and more recently, one of our major locations in February 2013, caused by large scale construction and renovation projects in Las Vegas. We are hopeful that consumer spending in Las Vegas will improve and that with these two new locations, our future revenues will improve."

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 (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) provides discount ticketing services. It currently operates eleven 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.

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 the expected opening dates of, and operations and sales at, each of the two new locations discussed herein, potential improvements in consumer spending in Las Vegas, and 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 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 reports for the twelve months ended December 31, 2012 and the three and six months ended June 30, 2013 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,
2013
    December 31,
2012
 
    (Unaudited)        
   
Assets  
Current assets:                
  Cash   $ 6,471,000     $ 6,017,000  
  Short-term investments     3,005,000       2,993,000  
  Accounts receivable     33,000       45,000  
  Prepaid expenses and other current assets     219,000       419,000  
    Total current assets     9,728,000       9,474,000  
                 
Property and equipment, net     1,049,000       1,047,000  
                 
Other assets:                
  Intangible assets:                
    Goodwill     3,120,000       3,120,000  
    Intangibles, net     752,000       1,006,000  
    Total intangible assets     3,872,000       4,126,000  
  Deposits and other assets     151,000       187,000  
    Total other assets     4,023,000       4,313,000  
      Total assets   $ 14,800,000     $ 14,834,000  
                 
Liabilities and Stockholders' Equity  
Current liabilities:                
  Accounts payable and accrued expenses   $ 2,297,000     $ 3,372,000  
  Deferred revenue     78,000       151,000  
  Other current liabilities     153,000       156,000  
  Note payable - short term     176,000       -  
  Obligation for share purchase - short term     84,000       209,000  
    Total current liabilities     2,788,000       3,888,000  
                 
Note payable - net of current portion     715,000       879,000  
Obligation for share purchases - net of current portion     160,000       244,000  
Total liabilities     3,663,000       5,011,000  
                 
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 9,955,544 treasury shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively     2,691,000       2,691,000  
  Additional paid-in capital     92,886,000       92,366,000  
  Obligation for share purchases     (2,061,000 )     (2,032,000 )
  Cost of shares held in treasury     (14,654,000 )     (14,654,000 )
  Accumulated deficit     (67,716,000 )     (68,532,000 )
  Accumulated other comprehensive loss     (9,000 )     (16,000 )
    Total stockholders' equity     11,137,000       9,823,000  
      Total liabilities and stockholders' equity   $ 14,800,000     $ 14,834,000  
                       
                       
   
TIX CORPORATION AND SUBSIDIARIES  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME  
 (UNAUDITED)  
             
    Three Months Ended June 30,  
    2013     2012  
    (Unaudited)     (Unaudited)  
                 
Revenues   $ 5,160,000     $ 6,193,000  
Operating expenses:                
    Direct costs of revenues     2,132,000       2,571,000  
    Selling, general and administrative expenses     2,131,000       2,651,000  
    Depreciation and amortization     269,000       285,000  
      Total costs and expenses     4,532,000       5,507,000  
Operating income     628,000       686,000  
Other expense:                
    Other income     5,000       -  
    Interest income     5,000       1,000  
    Interest expense     (21,000 )     (26,000 )
      Other expense, net     (11,000 )     (25,000 )
Income from continuing operations before income tax expense     617,000       661,000  
Income tax expense     38,000       41,000  
Income from continuing operations     579,000       620,000  
Discontinued operations:                
    Loss from operations of discontinued operations     -       (281,000 )
    Loss on sale of discontinued operations     -       (244,000 )
Loss on discontinued operations     -       (525,000 )
Net income     579,000       95,000  
Other comprehensive income (loss):                
  Unrealized gain (loss) on available-for-sale securities     6,000       (7,000 )
Comprehensive income   $ 585,000     $ 88,000  
                 
Net income per common share - continuing operations                
  Net income per common share - continuing operations - basic   $ 0.02     $ 0.03  
  Net income per common share - continuing operations - diluted   $ 0.02     $ 0.03  
                 
Net loss per common share - discontinued operations                
  Net loss per common share - discontinued operations - basic   $ -     $ (0.02 )
  Net loss per common share - discontinued operations - diluted   $ -     $ (0.02 )
                 
Net income per common share                
  Net income per common share - basic   $ 0.02     $ 0.00  
  Net income per common share - basic and diluted   $ 0.02     $ 0.00  
                 
Weighted average common shares outstanding - basic     23,669,831       23,669,831  
Weighted average common shares outstanding - diluted     23,730,388       24,552,274  
                 
                 
   
TIX CORPORATION AND SUBSIDIARIES  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)  
(UNAUDITED)  
             
    Six Months Ended June 30,  
    2013     2012  
    (Unaudited)     (Unaudited)  
                 
Revenues   $ 10,443,000     $ 12,061,000  
Operating expenses:                
    Direct costs of revenues     4,467,000       5,373,000  
    Selling, general and administrative expenses     4,524,000       5,628,000  
    Depreciation and amortization     544,000       584,000  
      Total costs and expenses     9,535,000       11,585,000  
Operating income     908,000       476,000  
Other expense:                
    Other income     -       3,000  
    Interest income     11,000       13,000  
    Interest expense     (27,000 )     (52,000 )
      Other expense, net     (16,000 )     (36,000 )
Income from continuing operations before income tax expense     892,000       440,000  
Income tax expense     76,000       41,000  
Income from continuing operations     816,000       399,000  
Discontinued operations:                
    Loss from operations of discontinued operations     -       (355,000 )
    Loss on sale of discontinued operations     -       (244,000 )
Loss on discontinued operations     -       (599,000 )
Net income (loss)     816,000       (200,000 )
Other comprehensive income (loss):                
  Unrealized income (loss) on available-for-sale securities     7,000       (9,000 )
Comprehensive income (loss)   $ 823,000     $ (209,000 )
                 
Net income per common share - continuing operations                
  Net income per common share - continuing operations - basic   $ 0.03     $ 0.02  
  Net income per common share - continuing operations - diluted   $ 0.03     $ 0.02  
                 
Net loss per common share - discontinued operations                
  Net loss per common share - discontinued operations - basic   $ -     $ (0.03 )
  Net loss per common share - discontinued operations - diluted   $ -     $ (0.03 )
                 
Net income (loss) per common share                
  Net income (loss) per common share - basic   $ 0.03     $ (0.01 )
  Net income (loss) per common share - basic and diluted   $ 0.03     $ (0.01 )
                 
Weighted average common shares outstanding - basic     23,669,831       23,671,190  
Weighted average common shares outstanding - diluted     23,726,956       23,671,190  
                 
                 
   
TIX CORPORATION AND SUBSIDIARIES  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  
       
    Six Months Ended June 30,  
    2013     2012  
    (Unaudited)     (Unaudited)  
Cash flows from operating activities:                
  Net income (loss)   $ 816,000     $ (200,000 )
    Adjustments to reconcile net income (loss) to net cash provided by operating activities:                
    Loss on discontinued operations     -       599,000  
    Depreciation     290,000       325,000  
    Non-cash interest     12,000       43,000  
    Realized loss on available-for-sale securities arising during the period     15,000       -  
    Amortization of intangible assets     254,000       259,000  
    Fair value of options and warrants issued to employees and directors     494,000       512,000  
    (Increase) decrease in:                
      Accounts receivable     12,000       8,000  
      Prepaid expenses and other assets     236,000       453,000  
    Increase (decrease) in:                
      Accounts payable and accrued expenses     (1,075,000 )     (850,000 )
      Deferred revenue     (73,000 )     26,000  
      Other current liabilities     (3,000 )     (3,000 )
        Net cash provided by operating activities from continuing operations     978,000       1,172,000  
        Net cash provided by operating activities from discontinued operations     -       103,000  
          Net cash provided by operating activities     978,000       1,275,000  
                 
Cash flows from investing activities:                
  Purchases of property and equipment     (292,000 )     (244,000 )
  Purchases of short-term investments, net     (20,000 )     (3,000,000 )
          Net cash used in investing activities     (312,000 )     (3,244,000 )
        Net cash used in investing activities from discontinued operations     -       -  
          Net cash used in investing activities     (312,000 )     (3,244,000 )
                 
Cash flows from financing activities:                
  Cost of treasury shares, net of fees     -       (23,000 )
  Payment of repurchase obligation     -       (1,182,000 )
  Repayment of acquisition note     -       (250,000 )
  Obligation for share purchases     (212,000 )     (210,000 )
          Net cash used in financing activities     (212,000 )     (1,665,000 )
                 
  Net increase (decrease)     454,000       (3,634,000 )
  Balance at beginning of period     6,017,000       8,077,000  
  Balance at end of period   $ 6,471,000     $ 4,443,000  
                 
                 
 
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, 2013   June 30, 2012  
    (Unaudited)   (Unaudited)  
Net income   $ 579,000   $ 95,000  
Loss from discontinued operations     -     525,000  
Income tax expense     38,000     41,000  
Interest expense, net     16,000     25,000  
Litigation expense and non-routine legal and advisory services for corporate and governance matters     220,000     532,000  
Stock based compensation expense     247,000     257,000  
Depreciation and amortization     269,000     285,000  
Adjusted Earnings   $ 1,369,000   $ 1,760,000  
               
               
    Six months ended   Six months ended  
    June 30, 2013   June 30, 2012  
    (Unaudited)   (Unaudited)  
Net income (loss)   $ 816,000   $ (200,000 )
Loss from discontinued operations     -     599,000  
Income tax expense     76,000     41,000  
Interest expense, net     16,000     39,000  
Litigation expense and non-routine legal and advisory services for corporate and governance matters     620,000     1,407,000  
Stock based compensation expense     494,000     512,000  
Depreciation and amortization     544,000     584,000  
Adjusted Earnings   $ 2,566,000   $ 2,982,000  
               
               

Contact Information

  • Contact:
    Steve Handy
    CFO
    818-761-1002