STUDIO CITY, CA--(Marketwired - Nov 12, 2013) - Tix Corporation (the "Company") (OTCQX: TIXC), a leading provider of discount ticketing services, today reported results for the third quarter and first nine months ended September 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 September 30, 2013 and 2012
Third quarter 2013 revenues decreased 9% to $5.8 million compared with $6.4 million for the same period a year ago. The decline in revenues of $603,000 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. This decline in revenues was offset by the opening of two new discount ticket locations; one in July 2013 and another in August 2013. Revenues were also negatively impacted by the continued general decrease in consumer spending in Las Vegas.
Third quarter 2013 direct operating expenses decreased 4% to $2.4 million compared with $2.5 million for the same period a year ago. Included in these expenses are payroll costs, rents, and utilities. The decrease in expense of $98,000 was due to $36,000 in reduced rents and utilities expense and $14,000 in decreased payroll costs realized in connection with the changes in discount ticket locations during the period as discussed above, and $48,000 in reduced rents at one of our discount ticket locations that took effect on August 1, 2012.
Third quarter 2013 selling, general and administrative expenses were $2.3 million compared with $2.8 million for the same period a year ago. Included in these expenses are $377,000 of aggregate expenses during the third quarter of 2013 and $636,000 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 $159,000, or 7%, to $2.0 million compared to $2.1 million for the same period of the prior year. The decrease in expenses of $159,000 was realized in connection with the changes in discount ticket locations during the period as discussed above and our continual efforts to manage our overall expenses.
Third quarter 2013 net income was $649,000, or $0.03 per diluted common share, as compared to a net income of $768,000, or $0.03 per diluted common share reported for the same period a year ago. Adjusted Earnings (as defined and explained below) for the third quarter 2013, which includes adjustments for items such as discontinued operations and expenses related to litigation and related legal matters described below, was $1.6 million, or $0.07 per diluted common share, as compared to Adjusted Earnings of $2.0 million, or $0.08 per diluted common share, reported for the same period a year ago.
Nine Months Ended September 30, 2013 and 2012
For the first nine months of 2013, revenues decreased 12% to $16.2 million compared with $18.4 million for the same period a year ago. The decline in revenues of $2.2 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. This decline in revenues was offset by the opening of two new discount ticket locations; one in July 2013 and another in August 2013. Revenues were also negatively impacted by the continued general decrease in consumer spending in Las Vegas.
For the first nine months of 2013, direct operating expenses decreased 13% to $6.9 million compared with $7.9 million for the same period a year ago. The decrease in expense of $1.0 million was due to $337,000 in reduced rents and utilities expense and $329,000 in reduced payroll costs realized in connection with the changes in discount ticket locations during the period as discussed above, and $338,000 in reduced rents at one of our discount ticket locations that took effect on August 1, 2012.
For the first nine months of 2013, selling, general and administrative expenses were $6.9 million compared with $8.4 million for the same period a year ago. Included in these expenses are $1.0 million of aggregate expenses during the first nine months of 2013 and $2.0 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 $474,000, or 7%, to $5.9 million compared to $6.3 million for the same period of the prior year. The decrease in expenses of $474,000 was realized in connection with the changes in discount ticket locations during the period as discussed above and our continual efforts to manage our overall expenses.
For the first nine months of 2013, net income was $1.5 million, or $0.06 per diluted common share, as compared to a net income of $568,000, or $0.02 per diluted common share, reported for the same period a year ago. Adjusted Earnings (as defined and explained below) for the first nine months of 2013, which includes adjustments for items such as discontinued operations and expenses related to litigation and related legal matters described below, was $4.2 million, or $0.18 per diluted common share, as compared to Adjusted Earnings of $5.0 million, or $0.20 per diluted common share, reported for the same period a year ago.
Conclusion
Mitch Francis, Chief Executive Officer of the Company, stated, "In July and August of 2013, we opened two new discount ticket locations which helped offset the negative impact resulting from the closure of one of our discount ticket locations in April 2012 and more recently, one of our major discount ticket locations in February 2013, caused by large scale construction and renovation projects in Las Vegas. With these two new discount ticket locations, September revenues have increased over the same period a year ago. We are hopeful that this trend will continue for the remainder of 2013."
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 discount ticket 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 nine months ended September 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 | |||||||||||
| September 30, 2013 | December 31, 2012 | ||||||||||
| (Unaudited) | |||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash | $ | 9,220,000 | $ | 6,017,000 | |||||||
| Short-term investments | 1,798,000 | 2,993,000 | |||||||||
| Accounts receivable | 55,000 | 45,000 | |||||||||
| Prepaid expenses and other current assets | 136,000 | 419,000 | |||||||||
| Total current assets | 11,209,000 | 9,474,000 | |||||||||
| Property and equipment, net | 1,175,000 | 1,047,000 | |||||||||
| Other assets: | |||||||||||
| Intangible assets: | |||||||||||
| Goodwill | 3,120,000 | 3,120,000 | |||||||||
| Intangibles, net | 625,000 | 1,006,000 | |||||||||
| Total intangible assets | 3,745,000 | 4,126,000 | |||||||||
| Deposits and other assets | 152,000 | 187,000 | |||||||||
| Total other assets | 3,897,000 | 4,313,000 | |||||||||
| Total assets | $ | 16,281,000 | $ | 14,834,000 | |||||||
| Liabilities and Stockholders' Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable and accrued expenses | $ | 2,857,000 | $ | 3,372,000 | |||||||
| Deferred revenue | 86,000 | 151,000 | |||||||||
| Other current liabilities | 145,000 | 156,000 | |||||||||
| Note payable - short term | 182,000 | - | |||||||||
| Obligation for share purchase - short term | 84,000 | 209,000 | |||||||||
| Total current liabilities | 3,354,000 | 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 | 4,229,000 | 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 September 30, 2013 and December 31, 2012, respectively | 2,691,000 | 2,691,000 | |||||||||
| Additional paid-in capital | 93,156,000 | 92,366,000 | |||||||||
| Obligation for share purchases | (2,074,000 | ) | (2,032,000 | ) | |||||||
| Cost of shares held in treasury | (14,654,000 | ) | (14,654,000 | ) | |||||||
| Accumulated deficit | (67,067,000 | ) | (68,532,000 | ) | |||||||
| Accumulated other comprehensive loss | - | (16,000 | ) | ||||||||
| Total stockholders' equity | 12,052,000 | 9,823,000 | |||||||||
| Total liabilities and stockholders' equity | $ | 16,281,000 | $ | 14,834,000 | |||||||
| TIX CORPORATION AND SUBSIDIARIES | ||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED) | ||||||||||
| Three Months Ended September 30, | ||||||||||
| 2013 | 2012 | |||||||||
| (Unaudited) | (Unaudited) | |||||||||
| Revenues | $ | 5,759,000 | $ | 6,362,000 | ||||||
| Operating expenses: | ||||||||||
| Direct costs of revenues | 2,414,000 | 2,512,000 | ||||||||
| Selling, general and administrative expenses | 2,344,000 | 2,762,000 | ||||||||
| Depreciation and amortization | 294,000 | 288,000 | ||||||||
| Total costs and expenses | 5,052,000 | 5,562,000 | ||||||||
| Operating income | 707,000 | 800,000 | ||||||||
| Other expense: | ||||||||||
| Other expense | - | (2,000 | ) | |||||||
| Interest income | 2,000 | 10,000 | ||||||||
| Interest expense | (15,000 | ) | (26,000 | ) | ||||||
| Other expense, net | (13,000 | ) | (18,000 | ) | ||||||
| Income from continuing operations before income tax expense | 694,000 | 782,000 | ||||||||
| Income tax expense | 45,000 | 69,000 | ||||||||
| Income from continuing operations | 649,000 | 713,000 | ||||||||
| Discontinued operations: | ||||||||||
| Income from operations of discontinued operations | - | 55,000 | ||||||||
| Loss on sale of discontinued operations | - | - | ||||||||
| Gain on discontinued operations | - | 55,000 | ||||||||
| Net income | 649,000 | 768,000 | ||||||||
| Other comprehensive loss: | ||||||||||
| Unrealized gain (loss) on available-for-sale securities | 9,000 | (4,000 | ) | |||||||
| Comprehensive income | $ | 658,000 | $ | 764,000 | ||||||
| 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 loss per common share - discontinued operations | ||||||||||
| Net loss per common share - discontinued operations - basic | $ | - | $ | 0.00 | ||||||
| Net loss per common share - discontinued operations - diluted | $ | - | $ | 0.00 | ||||||
| Net income per common share | ||||||||||
| Net income per common share - basic | $ | 0.03 | $ | 0.03 | ||||||
| Net income per common share - basic and diluted | $ | 0.03 | $ | 0.03 | ||||||
| Weighted average common shares outstanding - basic | 23,669,831 | 23,669,831 | ||||||||
| Weighted average common shares outstanding - diluted | 23,747,694 | 24,421,731 | ||||||||
| TIX CORPORATION AND SUBSIDIARIES | ||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED) | ||||||||||
| Nine Months Ended September 30, | ||||||||||
| 2013 | 2012 | |||||||||
| (Unaudited) | (Unaudited) | |||||||||
| Revenues | $ | 16,202,000 | $ | 18,423,000 | ||||||
| Operating expenses: | ||||||||||
| Direct costs of revenues | 6,881,000 | 7,885,000 | ||||||||
| Selling, general and administrative expenses | 6,868,000 | 8,390,000 | ||||||||
| Depreciation and amortization | 838,000 | 872,000 | ||||||||
| Total costs and expenses | 14,587,000 | 17,147,000 | ||||||||
| Operating income | 1,615,000 | 1,276,000 | ||||||||
| Other expense: | ||||||||||
| Other income | - | 1,000 | ||||||||
| Interest income | 13,000 | 23,000 | ||||||||
| Interest expense | (42,000 | ) | (78,000 | ) | ||||||
| Other expense, net | (29,000 | ) | (54,000 | ) | ||||||
| Income from continuing operations before income tax expense | 1,586,000 | 1,222,000 | ||||||||
| Income tax expense | 121,000 | 110,000 | ||||||||
| Income from continuing operations | 1,465,000 | 1,112,000 | ||||||||
| Discontinued operations: | ||||||||||
| Loss from operations of discontinued operations | - | (300,000 | ) | |||||||
| Loss on sale of discontinued operations | - | (244,000 | ) | |||||||
| Loss on discontinued operations | - | (544,000 | ) | |||||||
| Net income | 1,465,000 | 568,000 | ||||||||
| Other comprehensive loss: | ||||||||||
| Unrealized gain (loss) on available-for-sale securities | 16,000 | (13,000 | ) | |||||||
| Comprehensive income | $ | 1,481,000 | $ | 555,000 | ||||||
| Net income per common share - continuing operations | ||||||||||
| Net income per common share - continuing operations - basic | $ | 0.06 | $ | 0.05 | ||||||
| Net income per common share - continuing operations - diluted | $ | 0.06 | $ | 0.05 | ||||||
| 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 | $ | 0.06 | $ | 0.02 | ||||||
| Net income per common share - basic and diluted | $ | 0.06 | $ | 0.02 | ||||||
| Weighted average common shares outstanding - basic | 23,669,831 | 23,670,732 | ||||||||
| Weighted average common shares outstanding - diluted | 23,734,395 | 24,537,725 | ||||||||
| TIX CORPORATION AND SUBSIDIARIES | ||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
| Nine Months Ended September 30, | ||||||||||||
| 2013 | 2012 | |||||||||||
| (Unaudited) | (Unaudited) | |||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net income | $ | 1,465,000 | $ | 568,000 | ||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
| Loss on discontinued operations | - | 544,000 | ||||||||||
| Depreciation | 458,000 | 485,000 | ||||||||||
| Non-cash interest | 19,000 | 82,000 | ||||||||||
| Realized loss on available-for-sale securities arising during the period | 24,000 | 3,000 | ||||||||||
| Amortization of intangible assets | 381,000 | 387,000 | ||||||||||
| Fair value of options and warrants issued to employees and directors | 750,000 | 765,000 | ||||||||||
| (Increase) decrease in: | ||||||||||||
| Accounts receivable | (10,000 | ) | 3,000 | |||||||||
| Prepaid expenses and other assets | 318,000 | 626,000 | ||||||||||
| Increase (decrease) in: | ||||||||||||
| Accounts payable and accrued expenses | (515,000 | ) | (1,024,000 | ) | ||||||||
| Deferred revenue | (65,000 | ) | 43,000 | |||||||||
| Other current liabilities | (11,000 | ) | 21,000 | |||||||||
| Net cash provided by operating activities from continuing operations | 2,814,000 | 2,503,000 | ||||||||||
| Net cash provided by operating activities from discontinued operations | - | 20,000 | ||||||||||
| Net cash provided by operating activities | 2,814,000 | 2,523,000 | ||||||||||
| Cash flows from investing activities: | ||||||||||||
| Purchases of property and equipment | (586,000 | ) | (291,000 | ) | ||||||||
| Purchase of short-term investments | (1,199,000 | ) | (3,596,000 | ) | ||||||||
| Maturity of short-term investments | 2,386,000 | 590,000 | ||||||||||
| Net cash provided by (used in) investing activities | 601,000 | (3,297,000 | ) | |||||||||
| Net cash used in investing activities from discontinued operations | - | - | ||||||||||
| Net cash provided by (used in) investing activities | 601,000 | (3,297,000 | ) | |||||||||
| Cash flows from financing activities: | ||||||||||||
| Cost of treasury shares, net of fees | - | (23,000 | ) | |||||||||
| Payment of repurchase obligation | - | (2,364,000 | ) | |||||||||
| Repayment of acquisition note | - | (500,000 | ) | |||||||||
| Obligation for share purchases | (212,000 | ) | (335,000 | ) | ||||||||
| Net cash used in financing activities | (212,000 | ) | (3,222,000 | ) | ||||||||
| Net increase (decrease) | 3,203,000 | (3,996,000 | ) | |||||||||
| Balance at beginning of period | 6,017,000 | 8,077,000 | ||||||||||
| Balance at end of period | $ | 9,220,000 | $ | 4,081,000 | ||||||||
| 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 | ||||||
| September 30, 2013 | September 30, 2012 | ||||||
| (Unaudited) | (Unaudited) | ||||||
| Net income | $ | 649,000 | $ | 768,000 | |||
| Gain from discontinued operations | - | (55,000 | ) | ||||
| Income tax expense | 45,000 | 69,000 | |||||
| Interest expense, net | 13,000 | 16,000 | |||||
| Litigation expense and non-routine legal and advisory services for corporate and governance matters | 377,000 | 636,000 | |||||
| Stock based compensation expense | 256,000 | 253,000 | |||||
| Depreciation and amortization | 294,000 | 288,000 | |||||
| Adjusted Earnings | $ | 1,634,000 | $ | 1,975,000 | |||
| Nine months ended | Nine months ended | ||||||
| September 30, 2013 | September 30, 2012 | ||||||
| (Unaudited) | (Unaudited) | ||||||
| Net income | $ | 1,465,000 | $ | 568,000 | |||
| Loss from discontinued operations | - | 544,000 | |||||
| Income tax expense | 121,000 | 110,000 | |||||
| Interest expense, net | 29,000 | 55,000 | |||||
| Litigation expense and non-routine legal and advisory services for corporate and governance matters | 996,000 | 2,044,000 | |||||
| Stock based compensation expense | 750,000 | 765,000 | |||||
| Depreciation and amortization | 838,000 | 872,000 | |||||
| Adjusted Earnings | $ | 4,199,000 | $ | 4,958,000 | |||
Contact:
Steve Handy
CFO
818-761-1002