STUDIO CITY, CA--(Marketwired - Mar 2, 2016) - Tix Corporation (OTCQX: TIXC)
FULL YEAR 2015 HIGHLIGHTS
- Net income before deferred tax valuation adjustment increased 27%
- Adjusted EBITDA increased 11% to $6.5 million
- Initiated a quarterly cash dividend program of $0.05 per share, $0.20 per share annually
- Dividend yield averaging approximately 9%
- Working capital improved 105% to $5.4 million after paying $2.6 million in cash dividends
Tix Corporation (the "Company") (OTCQX: TIXC), a leading provider of discount ticketing services, today reported results for the fourth quarter and full year ended December 31, 2015.
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. Our discount ticket locations also offer discount dinner reservations at various restaurants surrounding the Las Vegas Strip and downtown.
Fourth Quarter 2015 Results
Fourth quarter 2015 revenues of $5,940,000 were comparable with $5,942,000 in the same period a year ago.
Fourth quarter 2015 direct operating expenses, which includes payroll costs, rents, and utilities, of $2,465,000 were comparable with $2,439,000 for the same period a year ago. Direct operating expenses, as a percentage of revenues, were 41% for both the fourth quarter 2015 and for the same period a year ago.
Fourth quarter 2015 selling, general and administrative expenses decreased $255,000, or 10%, to $2,178,000 compared with $2,433,000 for the same period a year ago. The decrease in expenses was realized from decreased employee related expenses as compared to the same period a year ago.
Fourth quarter 2015 income tax benefit was $11,511,000, as compared to an income tax benefit of $20,000 reported for the same period a year ago. During the fourth quarter of 2015, the Company determined, based on various factors including historical results and anticipated future results, that the majority of the Company's valuation allowance on its deferred tax assets be reversed. Therefore, during the fourth quarter 2015, the Company recorded a one-time adjustment of $11,531,000 to income tax benefit on its consolidated statements of operations and deferred tax asset on its consolidated balance sheet.
Fourth quarter 2015 net income was $12,662,000, or $0.70 per diluted common share, as compared to a net income of $888,000, or $0.05 per diluted common share reported for the same period a year ago. Excluding the income tax benefit adjustment discussed above, net income was $1,131,000, or $0.06 per diluted share, as compared to net income of $888,000, or $0.05 per diluted share, reported for the same period a year ago. Adjusted EBITDA (as defined and explained below) for the fourth quarter 2015, increased $152,000, or 12%, to $1,384,000, or $0.08 per diluted common share, as compared to Adjusted EBITDA of $1,232,000, or $0.07 per diluted common share, reported for the same period a year ago.
Full Year 2015 Results
For the full year of 2015, revenues increased 3% to $23,421,000 compared with $22,696,000 for the prior year.
For the full year of 2015, direct operating expenses of $9,395,000 were comparable with $9,441,000 for the prior year. Direct operating expenses, as a percentage of revenues, were 40% and 42% for the full year 2015 and 2014, respectively.
For the full year of 2015, selling, general and administrative expenses decreased 1% to $7,899,000 compared with $7,943,000 for the prior year.
For the full year of 2015, income tax benefit was $11,276,000, as compared to an income tax expense of $100,000 reported for the same period a year ago. During the full year of 2015, the Company determined, based on various factors including historical results and anticipated future results, that the majority of the Company's valuation allowance on its deferred tax assets be reversed. Therefore, during the full year of 2015, the Company recorded a one-time adjustment of $11,531,000 to income tax benefit on its consolidated statements of operations and deferred tax asset on its consolidated balance sheet.
For the full year of 2015, net income was $16,792,000, or $0.95 per diluted common share, as compared to a net income of $4,148,000, or $0.23 per diluted common share reported for the prior year. Excluding the one-time income tax benefit adjustment discussed above, net income for the full year of 2015 was $5,261,000, or $0.30 per diluted share, as compared to net income of $4,148,000 or $0.23 per diluted share, reported for the same period a year ago, a 27% increase. Adjusted EBITDA (as defined and explained below) for the full year of 2015, increased $643,000, or 11% to $6,493,000, or $0.37 per diluted common share, as compared to Adjusted EBITDA of $5,850,000, or $0.32 per diluted common share, reported for the same period a year ago.
Management Commentary
Mitch Francis, Chief Executive Officer of the Company, stated, "We continue to provide our customers with a unique, value-based service when they visit Las Vegas. The successful execution of our strategies led to solid financial results throughout 2015, generating revenue growth as well as the second best Adjusted EBITDA in our Company's history. Consistent operational performance and cash generation, coupled with confidence in our strategies allowed us to initiate a quarterly dividend program in the first half of 2015, which produced a meaningful dividend yield for our shareholders."
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 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.
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 | |||||||||||
| CONSOLIDATED BALANCE SHEETS | |||||||||||
| December 31, 2015 | December 31, 2014 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash | $ | 7,921,000 | $ | 4,866,000 | |||||||
| Accounts receivable | 47,000 | 54,000 | |||||||||
| Prepaid expenses and other current assets | 122,000 | 148,000 | |||||||||
| Total current assets | 8,090,000 | 5,068,000 | |||||||||
| Property and equipment, net | 579,000 | 918,000 | |||||||||
| Other assets: | |||||||||||
| Intangible assets: | |||||||||||
| Goodwill | 3,120,000 | 3,120,000 | |||||||||
| Intangibles, net | 17,000 | 153,000 | |||||||||
| Total intangible assets | 3,137,000 | 3,273,000 | |||||||||
| Deferred tax asset | 11,531,000 | - | |||||||||
| Deposits and other assets | 66,000 | 68,000 | |||||||||
| Total other assets | 14,734,000 | 3,341,000 | |||||||||
| Total assets | $ | 23,403,000 | $ | 9,327,000 | |||||||
| Liabilities and Stockholders' Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable - shows and events | $ | 1,140,000 | $ | 938,000 | |||||||
| Accounts payable and accrued expenses | 1,390,000 | 1,236,000 | |||||||||
| Deferred revenue | 25,000 | 25,000 | |||||||||
| Notes payable - short term and net of discount | 176,000 | 176,000 | |||||||||
| Obligation for share purchases - short term | - | 81,000 | |||||||||
| Total current liabilities | 2,731,000 | 2,456,000 | |||||||||
| Deferred rent obligations | 58,000 | 133,000 | |||||||||
| Note payable - net of current portion and discount | 376,000 | 552,000 | |||||||||
| Obligation for share purchases - net of current portion | - | 78,000 | |||||||||
| Total liabilities | 3,165,000 | 3,219,000 | |||||||||
| 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; 17,280,009 shares net of 16,619,953 treasury shares, and 17,864,744 shares net of 15,451,803 treasury shares issued and outstanding at December 31, 2015 and December 31, 2014, respectively | 2,713,000 | 2,666,000 | |||||||||
| Additional paid-in capital | 94,216,000 | 93,865,000 | |||||||||
| Obligation for share purchases | - | (2,148,000 | ) | ||||||||
| Cost of shares held in treasury | (28,115,000 | ) | (25,465,000 | ) | |||||||
| Accumulated deficit | (48,576,000 | ) | (62,810,000 | ) | |||||||
| Total stockholders' equity | 20,238,000 | 6,108,000 | |||||||||
| Total liabilities and stockholders' equity | $ | 23,403,000 | $ | 9,327,000 | |||||||
| TIX CORPORATION AND SUBSIDIARY | ||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||
| Three Months Ended December 31, | ||||||||||
| 2015 | 2014 | |||||||||
| Revenues | $ | 5,940,000 | $ | 5,942,000 | ||||||
| Operating expenses: | ||||||||||
| Direct costs of revenues | 2,465,000 | 2,439,000 | ||||||||
| Selling, general and administrative expenses | 2,178,000 | 2,433,000 | ||||||||
| Depreciation and amortization | 141,000 | 194,000 | ||||||||
| Total costs and expenses | 4,784,000 | 5,066,000 | ||||||||
| Operating income | 1,156,000 | 876,000 | ||||||||
| Other income (expense): | ||||||||||
| Interest income | 1,000 | - | ||||||||
| Interest expense | (6,000 | ) | (8,000 | ) | ||||||
| Other expense, net | (5,000 | ) | (8,000 | ) | ||||||
| Income from operations before income tax benefit | 1,151,000 | 868,000 | ||||||||
| Income tax benefit | (11,511,000 | ) | (20,000 | ) | ||||||
| Net income | $ | 12,662,000 | $ | 888,000 | ||||||
| Net income per common share | ||||||||||
| Net income per common share - basic | $ | 0.73 | $ | 0.05 | ||||||
| Net income per common share - diluted | $ | 0.70 | $ | 0.05 | ||||||
| Weighted average common shares outstanding - basic | 17,280,008 | 18,176,337 | ||||||||
| Weighted average common shares outstanding - diluted | 17,980,921 | 18,558,582 | ||||||||
| TIX CORPORATION AND SUBSIDIARY | ||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||
| Years Ended December 31, | ||||||||||
| 2015 | 2014 | |||||||||
| Revenues | $ | 23,421,000 | $ | 22,696,000 | ||||||
| Operating expenses: | ||||||||||
| Direct costs of revenues | 9,395,000 | 9,441,000 | ||||||||
| Selling, general and administrative expenses | 7,899,000 | 7,943,000 | ||||||||
| Depreciation and amortization | 596,000 | 855,000 | ||||||||
| Total costs and expenses | 17,890,000 | 18,239,000 | ||||||||
| Operating income | 5,531,000 | 4,457,000 | ||||||||
| Other income (expense): | ||||||||||
| Other income | 7,000 | 3,000 | ||||||||
| Interest income | 2,000 | 1,000 | ||||||||
| Interest expense | (24,000 | ) | (213,000 | ) | ||||||
| Other expense, net | (15,000 | ) | (209,000 | ) | ||||||
| Income before income tax (benefit) expense | 5,516,000 | 4,248,000 | ||||||||
| Income tax (benefit) expense | (11,276,000 | ) | 100,000 | |||||||
| Net income | $ | 16,792,000 | $ | 4,148,000 | ||||||
| Net income per common share | ||||||||||
| Net income per common share - basic | $ | 0.98 | $ | 0.23 | ||||||
| Net income per common share - diluted | $ | 0.95 | $ | 0.23 | ||||||
| Weighted average common shares outstanding - basic | 17,199,747 | 18,194,770 | ||||||||
| Weighted average common shares outstanding - diluted | 17,741,834 | 18,347,168 | ||||||||
| TIX CORPORATION AND SUBSIDIARY | ||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
| Years Ended December 31, | ||||||||||||
| 2015 | 2014 | |||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net income | $ | 16,792,000 | $ | 4,148,000 | ||||||||
| Adjustments to reconcile net income to cash provided by operating activities: | ||||||||||||
| Depreciation | 460,000 | 510,000 | ||||||||||
| Non-cash interest | 24,000 | 17,000 | ||||||||||
| Amortization of intangible assets | 136,000 | 345,000 | ||||||||||
| Change in deferred tax assets valuation allowance | (11,531,000 | ) | - | |||||||||
| Fair value of options and warrants issued to employees and directors | 366,000 | 429,000 | ||||||||||
| (Increase) decrease in: | ||||||||||||
| Accounts receivable | 7,000 | 9,000 | ||||||||||
| Prepaid expenses and other assets | 28,000 | 123,000 | ||||||||||
| Increase (decrease) in: | ||||||||||||
| Accounts payable - shows and events | 202,000 | 245,000 | ||||||||||
| Accounts payable and accrued expenses | 154,000 | 297,000 | ||||||||||
| Deferred revenue | - | (4,000 | ) | |||||||||
| Deferred rent obligation | (75,000 | ) | - | |||||||||
| Net cash provided by operating activities | 6,563,000 | 6,119,000 | ||||||||||
| Cash flows from investing activities: | ||||||||||||
| Purchases of property and equipment | (121,000 | ) | (544,000 | ) | ||||||||
| Net cash used in investing activities | (121,000 | ) | (544,000 | ) | ||||||||
| Cash flows from financing activities: | ||||||||||||
| Proceeds from exercise of stock options | 25,000 | - | ||||||||||
| Dividends paid | (2,558,000 | ) | ||||||||||
| Cost of treasury stock, net of fees | (495,000 | ) | (52,000 | ) | ||||||||
| Payment of notes payable | (200,000 | ) | (3,743,000 | ) | ||||||||
| Obligation for shares purchases | (159,000 | ) | (90,000 | ) | ||||||||
| Proceeds received from issuance of senior secured note payable | - | 4,000,000 | ||||||||||
| Payment of senior secured note payable | - | (4,000,000 | ) | |||||||||
| Net cash used in financing activities | (3,387,000 | ) | (3,885,000 | ) | ||||||||
| Net increase | 3,055,000 | 1,690,000 | ||||||||||
| Balance at beginning of period | 4,866,000 | 3,176,000 | ||||||||||
| Balance at end of period | $ | 7,921,000 | $ | 4,866,000 | ||||||||
| TIX CORPORATION AND SUBSIDIARIES | ||||||||
| TIX RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA | ||||||||
| (UNAUDITED) | ||||||||
| The following table set forth a reconciliation of consolidated net income to consolidated Adjusted EBITDA: | ||||||||
| Three months ended | Three months ended | |||||||
| December 31, 2015 | December 31, 2014 | |||||||
| Net income | $ | 12,662,000 | $ | 888,000 | ||||
| Income tax benefit | (11,511,000 | ) | (20,000 | ) | ||||
| Other expense, net | 5,000 | 8,000 | ||||||
| Depreciation and amortization | 141,000 | 194,000 | ||||||
| Stock based compensation expense | 87,000 | 162,000 | ||||||
| Adjusted EBITDA | $ | 1,384,000 | $ | 1,232,000 | ||||
| Twelve months ended | Twelve months ended | |||||||
| December 31, 2015 | December 31, 2014 | |||||||
| Net income | $ | 16,792,000 | $ | 4,148,000 | ||||
| Income tax (benefit) expense | (11,276,000 | ) | 100,000 | |||||
| Other expense, net | 15,000 | 209,000 | ||||||
| Depreciation and amortization | 596,000 | 855,000 | ||||||
| Stock based compensation expense | 366,000 | 429,000 | ||||||
| Litigation expense and non-routine legal and advisory services for corporate and governance matters | - | 109,000 | ||||||
| Adjusted EBITDA | $ | 6,493,000 | $ | 5,850,000 | ||||
Investor Contacts:
Steve Handy
CFO
(818)761-1002
EVC Group, Inc.
Doug Sherk
(415)652-9100
Brian Moore
(310)579-6199