Third Quarter 2014 Revenues Increased 2% While Adjusted Earnings Increased 17%
STUDIO CITY, CA--(Marketwired - Oct 27, 2014) - 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, 2014.
Tix Corporation's business is operated by its wholly owned subsidiary Tix4Tonight, which sells discount show tickets from ten locations in Las Vegas. Tix4Tonight obtains its inventory of discount tickets from 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, 2014 and 2013
Third quarter 2014 revenues were comparable at $5.9 million compared with $5.8 million for the same period a year ago; an increase of 2%.
Third quarter 2014 direct operating expenses decreased 4% to $2.3 million compared with $2.4 million for the same period a year ago. Included in these expenses are payroll costs, rents, and utilities. The decrease in expense of $89,000 was due to a reduction in payroll costs and a reduction in rents from a successful lease renegotiation.
Third quarter 2014 selling, general and administrative expenses were $1.7 million compared with $2.3 million for the same period a year ago. Included in the three months ended September 30, 2013 expenses were $377,000 of expenses relating to certain non-recurring matters requiring legal and advisory services relating to corporate and governance matters and litigation. No similar expense occurred during the same period of the current year. Excluding these expenses, selling, general and administrative expenses decreased $240,000, or 12%, to $1.7 million compared to $2.0 million for same period of the prior year. The decrease in expenses of $240,000 was due to a reduction in stock based compensation expense of $150,000, a reduction in general legal expense of $119,000, offset by an increase in expenses over our remaining operating accounts of $29,000.
Third quarter 2014 net income was $1.5 million, or $0.08 per diluted common share, as compared to a net income of $649,000, 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 2014, which includes adjustments for items such as expenses related to litigation and related legal matters described below, was $1.9 million, or $0.10 per diluted common share, as compared to Adjusted Earnings of $1.6 million, or $0.07 per diluted common share, reported for the same period a year ago.
Nine Months Ended September 30, 2014 and 2013
For the first nine months of 2014, revenues increased 3% to $16.8 million compared with $16.2 million for the same period a year ago. The increase in revenues was due to an increase in the number of discount ticket locations as compared to the same period of the prior year.
For the first nine months of 2014, direct operating expenses increased 2% to $7.0 million compared with $6.9 million for the same period a year ago. The increase in expense of $121,000 was due to increased rents related to an increase in discount ticket locations in operation during the period as compared to the same period of the prior year, offset by a reduction in rents from successful lease renegotiations and a reduction in payroll costs.
For the first nine months of 2014, selling, general and administrative expenses were $5.5 million compared with $6.9 million for the same period a year ago. Included in these expenses are $109,000 of expenses during the first nine months of 2014 and $1.0 million of 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 $471,000, or 8%, to $5.4 million compared to $5.9 million for the same period of the prior year. The decrease in expenses of $471,000 was due to a reduction in stock based compensation expense of $483,000, offset by an increase in expenses over our remaining operating accounts of $12,000.
For the first nine months of 2014, net income was $3.3 million, or $0.18 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 first nine months of 2014, which includes adjustments for items such as expenses related to litigation and related legal matters described below, was $4.6 million, or $0.25 per diluted common share, as compared to Adjusted Earnings of $4.2 million, or $0.18 per diluted common share, reported for the same period a year ago.
Conclusion
Mitch Francis, Chief Executive Officer of the Company, stated, "We are pleased with our third quarter performance which posted the strongest quarterly Adjusted Earnings in two years. With our improved cash flows, we recently paid in full our remaining obligation under our senior secured note payable."
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) other expense, net, (b) income taxes, (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 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 ten 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 operations and sales, 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 can be found on the Company website at www.tixcorp.com or at www.otcqx.com.
| TIX CORPORATION AND SUBSIDIARY | |||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||
| September 30, 2014 | December 31, 2013 | ||||||||||
| (Unaudited) | |||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash | $ | 5,762,000 | $ | 3,176,000 | |||||||
| Accounts receivable | 67,000 | 63,000 | |||||||||
| Prepaid expenses and other current assets | 199,000 | 268,000 | |||||||||
| Total current assets | 6,028,000 | 3,507,000 | |||||||||
| Property and equipment, net | 925,000 | 884,000 | |||||||||
| Other assets: | |||||||||||
| Intangible assets: | |||||||||||
| Goodwill | 3,120,000 | 3,120,000 | |||||||||
| Intangibles, net | 232,000 | 498,000 | |||||||||
| Total intangible assets | 3,352,000 | 3,618,000 | |||||||||
| Deposits and other assets | 68,000 | 71,000 | |||||||||
| Total other assets | 3,420,000 | 3,689,000 | |||||||||
| Total assets | $ | 10,373,000 | $ | 8,080,000 | |||||||
| Liabilities and Stockholders' Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable - shows and events | $ | 2,238,000 | $ | 693,000 | |||||||
| Accounts payable and accrued expenses | 534,000 | 939,000 | |||||||||
| Deferred revenue | 61,000 | 29,000 | |||||||||
| Senior secured note payable - Short term | 1,007,000 | - | |||||||||
| Notes payable - short term and net of discount | 176,000 | 3,726,000 | |||||||||
| Obligation for share purchase - short term | 81,000 | 84,000 | |||||||||
| Total current liabilities | 4,097,000 | 5,471,000 | |||||||||
| Deferred rent obligations | 86,000 | 133,000 | |||||||||
| Senior secured note payable - net of current portion | 500,000 | - | |||||||||
| Notes payable - net of current portion and discount | 546,000 | 728,000 | |||||||||
| Obligation for share purchases - net of current portion | 78,000 | 160,000 | |||||||||
| Total liabilities | 5,307,000 | 6,492,000 | |||||||||
| Stockholders' equity: | |||||||||||
| Preferred stock, $.01 par value; 500,000 shares authorized; none issued | - | - | |||||||||
| Common Stock, $.08 par value; 100,000,000 shares authorized; 18,179,744 shares net of 15,446,803 treasury shares, and 18,218,572 shares net of 15,406,803 treasury shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively | 2,691,000 | 2,691,000 | |||||||||
| Additional paid-in capital | 93,664,000 | 93,356,000 | |||||||||
| Obligation for share purchases | (2,134,000 | ) | (2,088,000 | ) | |||||||
| Cost of shares held in treasury | (25,457,000 | ) | (25,413,000 | ) | |||||||
| Accumulated deficit | (63,698,000 | ) | (66,958,000 | ) | |||||||
| Total stockholders' equity | 5,066,000 | 1,588,000 | |||||||||
| Total liabilities and stockholders' equity | $ | 10,373,000 | $ | 8,080,000 | |||||||
| TIX CORPORATION AND SUBSIDIARY | ||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED) | ||||||||||
| Three Months Ended September 30, | ||||||||||
| 2014 | 2013 | |||||||||
| (Unaudited) | (Unaudited) | |||||||||
| Revenues | $ | 5,855,000 | $ | 5,759,000 | ||||||
| Operating expenses: | ||||||||||
| Direct costs of revenues | 2,325,000 | 2,414,000 | ||||||||
| Selling, general and administrative expenses | 1,727,000 | 2,344,000 | ||||||||
| Depreciation and amortization | 198,000 | 294,000 | ||||||||
| Total costs and expenses | 4,250,000 | 5,052,000 | ||||||||
| Operating income | 1,605,000 | 707,000 | ||||||||
| Other expense: | ||||||||||
| Other income | 3,000 | - | ||||||||
| Interest income | - | 2,000 | ||||||||
| Interest expense | (38,000 | ) | (15,000 | ) | ||||||
| Other expense, net | (35,000 | ) | (13,000 | ) | ||||||
| Income before income tax expense | 1,570,000 | 694,000 | ||||||||
| Income tax expense | 39,000 | 45,000 | ||||||||
| Net income | 1,531,000 | 649,000 | ||||||||
| Other comprehensive loss: | ||||||||||
| Unrealized gain on available-for-sale securities | - | 9,000 | ||||||||
| Comprehensive income | $ | 1,531,000 | $ | 658,000 | ||||||
| Net income per common share | ||||||||||
| Net income per common share - basic | $ | 0.08 | $ | 0.03 | ||||||
| Net income per common share - diluted | $ | 0.08 | $ | 0.03 | ||||||
| Weighted average common shares outstanding - basic | 18,179,744 | 23,669,831 | ||||||||
| Weighted average common shares outstanding - diluted | 18,272,313 | 23,747,694 | ||||||||
| TIX CORPORATION AND SUBSIDIARY | ||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED) | ||||||||||
| Nine Months Ended September 30, | ||||||||||
| 2014 | 2013 | |||||||||
| (Unaudited) | (Unaudited) | |||||||||
| Revenues | $ | 16,754,000 | $ | 16,202,000 | ||||||
| Operating expenses: | ||||||||||
| Direct costs of revenues | 7,002,000 | 6,881,000 | ||||||||
| Selling, general and administrative expenses | 5,510,000 | 6,868,000 | ||||||||
| Depreciation and amortization | 661,000 | 838,000 | ||||||||
| Total costs and expenses | 13,173,000 | 14,587,000 | ||||||||
| Operating income | 3,581,000 | 1,615,000 | ||||||||
| Other expense: | ||||||||||
| Other income | 3,000 | - | ||||||||
| Interest income | 1,000 | 13,000 | ||||||||
| Interest expense | (205,000 | ) | (42,000 | ) | ||||||
| Other expense, net | (201,000 | ) | (29,000 | ) | ||||||
| Income before income tax expense | 3,380,000 | 1,586,000 | ||||||||
| Income tax expense | 120,000 | 121,000 | ||||||||
| Net income | 3,260,000 | 1,465,000 | ||||||||
| Other comprehensive loss: | ||||||||||
| Unrealized gain on available-for-sale securities | - | 16,000 | ||||||||
| Comprehensive income | $ | 3,260,000 | $ | 1,481,000 | ||||||
| Net income per common share | ||||||||||
| Net income per common share - basic | $ | 0.18 | $ | 0.06 | ||||||
| Net income per common share - diluted | $ | 0.18 | $ | 0.06 | ||||||
| Weighted average common shares outstanding - basic | 18,204,799 | 23,669,831 | ||||||||
| Weighted average common shares outstanding - diluted | 18,297,368 | 23,734,395 | ||||||||
| TIX CORPORATION AND SUBSIDIARY | ||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | ||||||||||||
| Nine Months Ended September 30, | ||||||||||||
| 2014 | 2013 | |||||||||||
| (Unaudited) | (Unaudited) | |||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net income | $ | 3,260,000 | $ | 1,465,000 | ||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
| Depreciation | 394,000 | 458,000 | ||||||||||
| Non-cash and accrued interest | 18,000 | 19,000 | ||||||||||
| Realized loss on available-for-sale securities arising during the period | - | 24,000 | ||||||||||
| Amortization of intangible assets | 266,000 | 381,000 | ||||||||||
| Fair value of options and warrants issued to employees and directors | 267,000 | 750,000 | ||||||||||
| (Increase) decrease in: | ||||||||||||
| Accounts receivable | (4,000 | ) | (10,000 | ) | ||||||||
| Prepaid expenses and other assets | 72,000 | 318,000 | ||||||||||
| Increase (decrease) in: | ||||||||||||
| Accounts payable - shows and events | 1,545,000 | (264,000 | ) | |||||||||
| Accounts payable and accrued expenses | (405,000 | ) | (251,000 | ) | ||||||||
| Deferred revenue | 32,000 | (65,000 | ) | |||||||||
| Deferred rent obligations | (47,000 | ) | (11,000 | ) | ||||||||
| Net cash provided by operating activities | 5,398,000 | 2,814,000 | ||||||||||
| Cash flows from investing activities: | ||||||||||||
| Purchases of property and equipment | (435,000 | ) | (586,000 | ) | ||||||||
| Purchase of short-term investments | - | (1,199,000 | ) | |||||||||
| Maturity of short-term investments | - | 2,386,000 | ||||||||||
| Net cash provided by (used in) investing activities | (435,000 | ) | 601,000 | |||||||||
| Cash flows from financing activities: | ||||||||||||
| Cash received on issuance of senior secured note payable | 4,000,000 | - | ||||||||||
| Payment on senior secured note payable | (2,500,000 | ) | - | |||||||||
| Payment on notes payable | (3,743,000 | ) | - | |||||||||
| Purchase of treasury shares | (44,000 | ) | - | |||||||||
| Obligation for share purchases | (90,000 | ) | (212,000 | ) | ||||||||
| Net cash used in financing activities | (2,377,000 | ) | (212,000 | ) | ||||||||
| Net increase | 2,586,000 | 3,203,000 | ||||||||||
| Cash, balance at beginning of period | 3,176,000 | 6,017,000 | ||||||||||
| Cash, balance at end of period | $ | 5,762,000 | $ | 9,220,000 | ||||||||
| TIX CORPORATION AND SUBSIDIARY | ||||||
| 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, 2014 | September 30, 2013 | |||||
| (Unaudited) | (Unaudited) | |||||
| Net income | $ | 1,531,000 | $ | 649,000 | ||
| Income tax expense | 39,000 | 45,000 | ||||
| Other expense, net | 35,000 | 13,000 | ||||
| Stock based compensation expense | 107,000 | 256,000 | ||||
| Depreciation and amortization | 198,000 | 294,000 | ||||
| Litigation expense and non-routine legal and advisory services for corporate and governance matters | - | 377,000 | ||||
| Adjusted Earnings | $ | 1,910,000 | $ | 1,634,000 | ||
| Nine Months Ended | Nine Months Ended | |||||
| September 30, 2014 | September 30, 2013 | |||||
| (Unaudited) | (Unaudited) | |||||
| Net income | $ | 3,260,000 | $ | 1,465,000 | ||
| Income tax expense | 120,000 | 121,000 | ||||
| Other expense, net | 201,000 | 29,000 | ||||
| Stock based compensation expense | 267,000 | 750,000 | ||||
| Depreciation and amortization | 661,000 | 838,000 | ||||
| Litigation expense and non-routine legal and advisory services for corporate and governance matters | 109,000 | 996,000 | ||||
| Adjusted Earnings | $ | 4,618,000 | $ | 4,199,000 | ||
Contact:
Steve Handy
CFO
818-761-1002