SOURCE: Tix Corporation

Tix Corporation

November 14, 2011 16:30 ET

Tix Corporation Reports Third Quarter and First Nine Months 2011 Results

Third Quarter 2011 Revenues Increased 14% While Adjusted Earnings Increased 50%

STUDIO CITY, CA--(Marketwire - Nov 14, 2011) - 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,
2011

December 31,
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
Services
Exhibit
Merchandising

Corporate
Consolidated
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
Services
Exhibit
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 Information

  • Contact:
    Steve Handy
    CFO
    818-761-1002