Tix Corporation (the "Company") (OTCQX: TIXC) (PINKSHEETS: TIXC), a
leading provider of discount ticketing services, today reported
results for the second quarter and first six months ended June 30,
2012.
The Company recently announced that it completed the sale of
principally all of the assets of its subsidiary, Exhibit
Merchandising, LLC. In prior periods, the Company had reported its
financial results in two operating segments -- Discount Ticketing
Services and Exhibit Merchandising. The financial statements for
the second quarter and first six months ended June 30, 2012 reflect
the reclassification of the Exhibit Merchandising segment to
discontinued operations. As the Company now operates under only one
operating segment, Discount Ticketing Services, it will no longer
provide segment reporting.
Our business is operated by our wholly owned subsidiary
Tix4Tonight, which sells discount show tickets from ten 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.
Each of our discount ticket locations also offers discount dinner
reservations at various restaurants surrounding the Las Vegas strip
and downtown, with dining at specific times on the same day or
advance in some cases.
Three Months Ended June 30, 2012 and
2011
Second quarter 2012 revenues decreased 7% to $6.2 million
compared with $6.7 million for the same period a year ago. The
decline in revenue is due to a general overall decrease in travel
to, and consumer spending in, Las Vegas. In addition, we closed one
of our discount ticket locations at the end of April 2012 due to
planned demolition work being performed by the property owner.
Second quarter 2012 direct operating expenses were $2.6 million
compared with $2.6 million for the same period a year ago. Included
in these expenses are payroll costs, rents, and utilities.
Second quarter 2012 selling, general and administrative expenses
were $2.7 million compared with $2.9 million for the same period a
year ago. Included in these expenses are $532,000 of aggregate
expenses during the second quarter of 2012 and $875,000 of
aggregate expenses during the same period a year ago, in each case
relating to litigation expenses, ordinary course legal expenses and
expenses for certain non-recurring matters requiring legal and
advisory services relating to corporate and governance matters.
Excluding these expenses, selling, general and administrative
expenses increased $89,000, or 4%, to $2.1 million compared to $2.0
million for the same period of the prior year. The increase in
expense of $89,000 was due to an increase of $63,000 in Board of
Directors' fees, an increase of $57,000 in general legal expenses,
and an increase in non-cash stock based compensation expense of
$92,000. These increases were offset by a decrease of $122,000 in
expenses across our remaining operating accounts.
Second quarter 2012 loss from discontinued operations was
$525,000 compared to a gain from discontinued operations of
$649,000 for the same period a year ago. The Company recently
announced that it completed the sale of principally all of the
assets and certain of the liabilities of its subsidiary, Exhibit
Merchandising, LLC, for a total consideration of $125,000. The sale
led to the recording of a loss on sale of discontinued operations
of $244,000 and Exhibit Merchandising realized a loss from
operations of $281,000, which included $77,000 of depreciation
expense, for the second quarter of 2012.
Second quarter 2012 net income was $95,000, or $0.00 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 second
quarter 2012, which includes adjustments for items such as
discontinued operations and expenses related to the litigation and
related legal matters described below, were $1.8 million, or $0.07
per diluted common share, as compared to Adjusted Earnings of $2.2
million, or $0.09 per diluted common share, reported for the same
period a year ago.
Six Months Ended June 30, 2012 and
2011
For the first six months of 2012, revenues increased 3% to $12.1
million compared with $11.8 million for the same period a year ago.
The increase in revenues reflects an expansion of the number of
discount ticket locations as part of our acquisition of
VegasTix4Less in the first calendar quarter of 2011 offset by a
general overall decrease in travel to, and consumer spending in,
Las Vegas. In addition, we closed one of our discount ticket
locations at the end of April 2012 due to planned demolition work
being performed by the property owner.
For the first six months of 2012, direct operating expenses were
$5.4 compared to $4.9 million for the same period a year ago.
Included in these expenses are payroll costs, rents, and utilities.
The increase in expense of $455,000 was due to planned increases in
staff payroll expense and increased rent expenses related to the
expansion of the number of discount ticket locations due to our
acquisition of VegasTix4Less in the middle of the first calendar
quarter of 2011.
For the first six months of 2012, selling, general and
administrative expenses were $5.6 million compared with $4.8
million for the same period a year ago. Included in these expenses
are $1.4 million of aggregate expenses during the first six months
of 2012 and $875,000 of aggregate expenses during the same period a
year ago, in each case relating to litigation expenses, ordinary
course legal expenses and expenses for certain non-recurring
matters requiring legal and advisory services relating to corporate
and governance matters. Excluding these expenses, selling, general
and administrative expenses increased $292,000, or 7%, to $4.2
million compared to $3.9 million for same period of the prior year.
The increase in expense of $292,000 was due to an increase of
$81,000 in Board of Directors' fees, an increase of $114,000 in
general legal expenses, and an increase in non-cash stock based
compensation expense of $201,000. These increases were offset by a
decrease of $104,000 in expenses across our remaining operating
accounts.
For the first six months of 2012, loss from discontinued
operations was $599,000 compared to a gain from discontinued
operations of $145,000 for the same period a year ago. The Company
recently announced that it completed the sale of principally all of
the assets and certain of the liabilities of its subsidiary,
Exhibit Merchandising, LLC, for a total consideration of $125,000.
The sale led to the recording of a loss on sale of discontinued
operations of $244,000 and Exhibit Merchandising realized a loss
from operations of $355,000 which included $153,000 of depreciation
expense, for the first six months of 2012.
For the first six months of 2012, net loss was ($200,000), or
($0.01) per diluted common share, as compared to a net income of
$1.6 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 six months of 2012, which includes adjustments
for items such as discontinued operations, expenses related to the
litigation and related legal matters and non-routine corporate
expenses related primarily to certain non-recurring matters
requiring legal and advisory services described below, were $3.0
million, or $0.13 per diluted common share, as compared to Adjusted
Earnings of $3.2 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,
"Our second quarter 2012 revenues reflect a recent general decline
in travel to, and consumer spending in, Las Vegas. In addition, we
closed one of our discount ticket locations due to demolition work
being performed at the site of our location by the land owner. We
will continue to monitor our performance and profitability and will
adjust our operations as much as possible to meet the expectations
of both our customers and shareholders."
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 and (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) is a company providing discount
ticketing services. It currently operates ten 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.
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 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 report for the
twelve months ended December 31, 2011 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, December 31,
2012 2011
------------- -------------
(Unaudited)
Assets
Current assets:
Cash $ 4,443,000 $ 8,077,000
Short-term investments - U.S. Treasury
securities available-for-sale 3,001,000 -
Accounts receivable 47,000 55,000
Prepaid expenses and other current assets 379,000 624,000
Current assets of operations held for sale 206,000 1,210,000
------------- -------------
Total current assets 8,076,000 9,966,000
------------- -------------
Property and equipment, net 1,318,000 1,399,000
------------- -------------
Other assets:
Intangible assets:
Goodwill 3,120,000 3,120,000
Intangibles, net 1,261,000 1,520,000
------------- -------------
Total intangible assets 4,381,000 4,640,000
Deposits and other assets 111,000 319,000
Long-term assets of operations held for sale - 12,000
------------- -------------
Total other assets 4,492,000 4,971,000
------------- -------------
Total assets $ 13,886,000 $ 16,336,000
============= =============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $ 2,436,000 $ 3,286,000
Deferred revenue 137,000 111,000
Other current liabilities 130,000 133,000
Note payable - short term - net 366,000 584,000
Obligation for share purchases - short term 415,000 417,000
Share repurchase obligation - short term --
net 1,164,000 2,313,000
Short term-liabilities of operations held
for sale 349,000 663,000
------------- -------------
Total current liabilities 4,997,000 7,507,000
Note payable - net 867,000 879,000
Obligation for share purchases 245,000 453,000
------------- -------------
Total liabilities 6,109,000 8,839,000
------------- -------------
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 9,943,247 treasury shares
issued and outstanding at June 30, 2012 and
December 31, 2011, respectively 2,691,000 2,690,000
Additional paid-in capital 91,843,000 91,313,000
Obligation for share purchases (1,987,000) (1,968,000)
Cost of shares held in treasury (14,654,000) (14,631,000)
Accumulated deficit (70,107,000) (69,907,000)
Accumulated other comprehensive loss (9,000) -
------------- -------------
Total stockholders' equity 7,777,000 7,497,000
------------- -------------
Total liabilities and stockholders'
equity $ 13,886,000 $ 16,336,000
============= =============
TIX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS) (UNAUDITED)
Three Months Ended
June 30,
------------------------
2012 2011
----------- -----------
(Unaudited) (Unaudited)
Revenues $ 6,193,000 $ 6,673,000
----------- -----------
Operating expenses:
Direct costs of revenues 2,571,000 2,569,000
Selling, general and administrative expenses 2,651,000 2,905,000
Depreciation and amortization 285,000 321,000
----------- -----------
Total costs and expenses 5,507,000 5,795,000
----------- -----------
Income from continuing operations 686,000 878,000
----------- -----------
Other expense:
Interest income 1,000 6,000
Interest expense (26,000) (32,000)
----------- -----------
Other expense, net (25,000) (26,000)
----------- -----------
Income from continuing operations before income
tax expense 661,000 852,000
Income tax expense 41,000 -
----------- -----------
Income from continuing operations 620,000 852,000
----------- -----------
Discontinued operations:
Income (loss) from operations of discontinued
operations (281,000) 649,000
Loss on sale of discontinued operations (244,000) -
----------- -----------
Gain (loss) from discontinued operations (525,000) 649,000
----------- -----------
Net income 95,000 1,501,000
Other comprehensive loss
Loss on available-for-sale securities arising
during period (7,000) -
----------- -----------
Comprehensive income $ 88,000 $ 1,501,000
=========== ===========
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 income (loss) per common share - discontinued
operations
Net income (loss) per common share -
discontinued operations - basic $ (0.02) $ 0.03
Net income (loss) per common share -
discontinued operations - diluted $ (0.02) $ 0.03
----------- -----------
Net income per common share
Net income per common share - basic $ 0.00 $ 0.06
=========== ===========
Net income per common share - diluted $ 0.00 $ 0.06
=========== ===========
Weighted average common shares outstanding - basic 23,669,831 24,606,833
=========== ===========
Weighted average common shares outstanding -
diluted 24,552,274 25,149,316
=========== ===========
TIX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS) (UNAUDITED)
Six Months Ended
June 30,
------------------------
2012 2011
----------- -----------
(Unaudited) (Unaudited)
Revenues $12,061,000 $11,739,000
----------- -----------
Operating expenses:
Direct costs of revenues 5,373,000 4,918,000
Selling, general and administrative expenses 5,628,000 4,804,000
Depreciation and amortization 584,000 552,000
----------- -----------
Total costs and expenses 11,585,000 10,274,000
----------- -----------
Income from continuing operations 476,000 1,465,000
----------- -----------
Other expense:
Other income 3,000 -
Interest income 13,000 9,000
Interest expense (52,000) (48,000)
----------- -----------
Other expense, net (36,000) (39,000)
----------- -----------
Income from continuing operations before income
tax expense 440,000 1,426,000
Income tax expense 41,000 -
----------- -----------
Income from continuing operations 399,000 1,426,000
----------- -----------
Discontinued operations:
Income (loss) from operations of discontinued
operations (355,000) 145,000
Loss on sale of discontinued operations (244,000) -
----------- -----------
Gain (loss) from discontinued operations (599,000) 145,000
----------- -----------
Net income (loss) (200,000) 1,571,000
Other comprehensive loss
Loss on available-for-sale securities arising
during period (9,000) -
----------- -----------
Comprehensive income (loss) $ (209,000) $ 1,571,000
=========== ===========
Net income per common share - continuing
operations
Net income per common share - continuing
operations - basic $ 0.02 $ 0.06
Net income per common share - continuing
operations - diluted $ 0.02 $ 0.06
Net income (loss) per common share - discontinued
operations
Net income (loss) per common share -
discontinued operations - basic $ (0.03) $ 0.01
Net income (loss) per common share -
discontinued operations - diluted $ (0.03) $ 0.01
----------- -----------
Net income (loss) per common share
Net income (loss) per common share - basic $ (0.01) $ 0.06
=========== ===========
Net income (loss) per common share - diluted $ (0.01) $ 0.06
=========== ===========
Weighted average common shares outstanding - basic 23,671,190 24,702,137
=========== ===========
Weighted average common shares outstanding -
diluted 23,671,190 25,244,620
=========== ===========
TIX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Six Months Ended
June 30,
------------------------
2012 2011
----------- -----------
(Unaudited) (Unaudited)
Cash flows from operating activities:
Net income (loss) $ (200,000) $ 1,571,000
Loss (gain) on discontinued operations 599,000 (145,000)
Adjustments to reconcile net income (loss) to
cash provided by operating activities:
Depreciation 325,000 301,000
Non-cash interest 52,000 48,000
Amortization of intangible assets 259,000 251,000
Fair value of options and warrants issued to
employees and directors 512,000 311,000
(Increase) decrease in:
Accounts receivable 8,000 92,000
Prepaid expenses and other assets 453,000 206,000
Increase (decrease) in:
Accounts payable and accrued expenses (850,000) 1,670,000
Deferred revenue 26,000 (7,000)
Other current liabilities (3,000) 17,000
----------- -----------
Net cash provided by operating activities from
continuing operations 1,181,000 4,315,000
Net cash provided by operating activities from
discontinued operations 103,000 689,000
----------- -----------
Net cash provided by operating activities 1,284,000 5,004,000
----------- -----------
Cash flows from investing activities:
Purchases of property and equipment (244,000) (106,000)
Purchase of available-for-sale securities (3,000,000) -
Acquisitions, net of cash acquired - (2,000,000)
----------- -----------
Net cash used in investing activities (3,244,000) (2,106,000)
----------- -----------
Cash flows from financing activities:
Cost of treasury stock, net of fees (23,000) (375,000)
Payment of repurchase obligation (1,182,000) (590,000)
Repayment of acquisition note (250,000) (125,000)
Obligation for share purchases (210,000) (870,000)
----------- -----------
Net cash used in financing activities (1,665,000) (1,960,000)
Loss on available-for-sale-securities held during
the period (9,000)
Net decrease (3,634,000) 938,000
----------- -----------
Cash balance at beginning of period 8,077,000 8,816,000
----------- -----------
Cash balance at end of period $ 4,443,000 $ 9,754,000
=========== ===========
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 Three months
ended ended
June 30, 2012 June 30, 2011
------------- -------------
Net income $ 95,000 $ 1,501,000
Loss (gain) from discontinued operations 525,000 (649,000)
Income tax expense 41,000 -
Interest expense, net 25,000 26,000
Litigation expense and non-routine legal and
advisory services for corporate and governance
matters 532,000 875,000
Stock based compensation expense 257,000 165,000
Depreciation & amortization 285,000 321,000
------------- -------------
Adjusted Earnings $ 1,760,000 $ 2,239,000
============= =============
Six months Six months
ended ended
June 30, 2012 June 30, 2011
------------- -------------
Net income (loss) $ (200,000) $ 1,571,000
Loss (gain) from discontinued operations 599,000 (145,000)
Income tax expense 41,000 -
Interest expense, net 39,000 39,000
Litigation expense and non-routine legal and
advisory services for corporate and
governance matters 1,407,000 875,000
Stock based compensation expense 512,000 311,000
Depreciation & amortization 584,000 552,000
------------- -------------
Adjusted Earnings $ 2,982,000 $ 3,203,000
============= =============
Contact: Steve Handy CFO 818-761-1002
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