Tix Corporation (the "Company") (OTCQX: TIXC), a leading provider
of discount ticketing services, today reported results for the
first quarter ended March 31, 2013.
Tix Corporation's business is operated by its wholly owned
subsidiary Tix4Tonight, which sells discount show tickets from nine
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.
First quarter 2013 revenues decreased 10% to $5.3 million
compared with $5.9 million for the same period a year ago. The
decline in revenues of $585,000 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. Revenues were also
negatively impacted by the continued general overall decrease in
consumer spending in Las Vegas.
First quarter 2013 direct operating expenses decreased 17% to
$2.3 million compared with $2.8 million for the same period a year
ago. Included in these expenses are payroll costs, rents, and
utilities. The decrease in expense of $466,000 was due to $131,000
in reduced rents and utilities expense and $190,000 in reduced
payroll costs realized from the closure of two of our discount
ticket locations as discussed above, and $145,000 in reduced rents
realized on the successful lease renegotiation at one of our
discount ticket locations in the second half of calendar year
2012.
First quarter 2013 selling, general and administrative expenses
were $2.4 million compared with $3.0 million for the same period a
year ago. Included in these expenses are $400,000 of aggregate
expenses during the first quarter of 2013 and $876,000 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 $108,000, or 5%, to $2.0 million
compared to $2.1 million for the same period of the prior year. The
decrease in expense was due to a decrease in merchant credit card
processing fees of $26,000, small equipment expense of $24,000,
advertising expense of $23,000, and employee related healthcare
expense of $20,000. The remaining decrease of $15,000 in expenses
was realized over our remaining operating accounts.
First quarter 2013 net income was $237,000, or $0.01 per diluted
common share, as compared to a net loss of ($294,000), or ($0.01)
per diluted common share, reported for the same period a year ago.
Adjusted Earnings (as defined and explained below) for the first
quarter 2013, which includes adjustments for items such as
discontinued operations and expenses related to litigation and
related legal matters described below, was $1.2 million, or $0.05
per diluted common share, as compared to Adjusted Earnings of $1.2
million, or $0.05 per diluted common share, reported for the same
period a year ago.
Conclusion
Mitch Francis, Chief Executive Officer of the Company, stated,
"Our first quarter 2013 revenue performance was negatively impacted
by the closure of one of our locations in April 2012 and more
recently, one of our major locations in February 2013, caused by
large scale construction and renovation projects in Las Vegas. In
an effort to mitigate the decline in revenues, we significantly
reduced our expenses which resulted in increased net income and an
Adjusted Earnings comparable to the same period a year ago. We will
continue to manage through these unusual short term disruptions to
our business by pursuing new locations, one which we currently
anticipate opening in the third quarter 2013 and another in the
second quarter of 2014. We expect these new locations, coupled with
an improvement in consumer spending in Las Vegas, to provide us
future revenue growth."
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 nine 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. 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, 2012 can be found on the Company
website at www.tixcorp.com or at www.otcqx.com.
TIX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2013 2012
------------- -------------
(Unaudited)
Assets
Current assets:
Cash $ 5,989,000 $ 6,017,000
Short-term investments 2,998,000 2,993,000
Accounts receivable 46,000 45,000
Prepaid expenses and other current assets 293,000 419,000
------------- -------------
Total current assets 9,326,000 9,474,000
------------- -------------
Property and equipment, net 952,000 1,047,000
------------- -------------
Other assets:
Intangible assets:
Goodwill 3,120,000 3,120,000
Intangibles, net 879,000 1,006,000
------------- -------------
Total intangible assets 3,999,000 4,126,000
Deposits and other assets 154,000 187,000
------------- -------------
Total other assets 4,153,000 4,313,000
------------- -------------
Total assets $ 14,431,000 $ 14,834,000
============= =============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $ 2,713,000 $ 3,372,000
Deferred revenue 137,000 151,000
Other current liabilities 146,000 156,000
Note payable - short term 170,000 -
Obligation for share purchase - short term 84,000 209,000
------------- -------------
Total current liabilities 3,250,000 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 4,125,000 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 March 31, 2013
and December 31, 2012, respectively 2,691,000 2,691,000
Additional paid-in capital 92,626,000 92,366,000
Obligation for share purchases (2,047,000) (2,032,000)
Cost of shares held in treasury (14,654,000) (14,654,000)
Accumulated deficit (68,295,000) (68,532,000)
Accumulated other comprehensive loss (15,000) (16,000)
------------- -------------
Total stockholders' equity 10,306,000 9,823,000
------------- -------------
Total liabilities and stockholders'
equity $ 14,431,000 $ 14,834,000
============= =============
TIX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS)
(UNAUDITED)
Three Months Ended March 31,
-----------------------------
2013 2012
-------------- --------------
(Unaudited) (Unaudited)
Revenues $ 5,283,000 $ 5,868,000
------------- -------------
Operating expenses:
Direct costs of revenues 2,335,000 2,801,000
Selling, general and administrative
expenses 2,393,000 2,977,000
Depreciation and amortization 275,000 299,000
------------- -------------
Total costs and expenses 5,003,000 6,077,000
------------- -------------
Income (loss) from continuing operations 280,000 (209,000)
------------- -------------
Other expense:
Other (expense) income (5,000) 3,000
Interest income 6,000 12,000
Interest expense (6,000) (26,000)
------------- -------------
Other expense, net (5,000) (11,000)
------------- -------------
Income (loss) from continuing operations
before income tax expense 275,000 (220,000)
Income tax expense 38,000 -
------------- -------------
Income (loss) from continuing operations 237,000 (220,000)
------------- -------------
Discontinued operations:
Loss from operations of discontinued
operations - (74,000)
------------- -------------
Loss on discontinued operations - (74,000)
------------- -------------
Net income (loss) $ 237,000 $ (294,000)
------------- -------------
Other comprehensive loss:
Unrealized gain (loss) on available-for-
sale securities 1,000 (2,000)
------------- -------------
Comprehensive income (loss) $ 238,000 $ (296,000)
============= =============
Net income (loss) per common share -
continuing operations
Net income (loss) per common share -
continuing operations - basic $ 0.01 $ (0.01)
Net income (loss) per common share -
continuing operations - diluted $ 0.01 $ (0.01)
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 (loss) per common share
Net income (loss) per common share - basic $ 0.01 $ (0.01)
============= =============
Net income (loss) per common share - basic
and diluted $ 0.01 $ (0.01)
============= =============
Weighted average common shares outstanding -
basic 23,669,831 24,672,534
============= =============
Weighted average common shares outstanding -
diluted 23,723,976 24,672,534
============= =============
TIX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31,
-----------------------------
2013 2012
-------------- --------------
(Unaudited) (Unaudited)
Cash flows from operating activities:
Net income (loss) $ 237,000 $ (294,000)
Adjustments to reconcile net income
(loss) to cash provided by operating
activities:
Loss on discontinued operations - 74,000
Depreciation 148,000 166,000
Non-cash interest 6,000 16,000
Realized loss on available-for-sale
securities arising during the period 5,000 -
Amortization of intangible assets 127,000 132,000
Fair value of options and warrants issued
to employees and directors 247,000 255,000
(Increase) decrease in:
Accounts receivable (1,000) 4,000
Prepaid expenses and other assets 159,000 402,000
Increase (decrease) in:
Accounts payable and accrued expenses (659,000) (687,000)
Deferred revenue (14,000) (10,000)
Other current liabilities (10,000) (3,000)
------------- -------------
Net cash provided by operating
activities from continuing
operations 245,000 55,000
Net cash provided by operating
activities from discontinued
operations - 68,000
------------- -------------
Net cash provided by operating
activities 245,000 123,000
------------- -------------
Cash flows from investing activities:
Purchases of property and equipment (53,000) (227,000)
Purchases of short-term investments, net (9,000) (3,000,000)
------------- -------------
Net cash used in investing
activities (62,000) (3,227,000)
Net cash used in investing activities
from discontinued operations - -
------------- -------------
Net cash used in investing
activities (62,000) (3,227,000)
------------- -------------
Cash flows from financing activities:
Cost of treasury shares, net of fees - (23,000)
Payment of repurchase obligation - (591,000)
Repayment of acquisition note - (250,000)
Obligation for share purchases (211,000) (105,000)
------------- -------------
Net cash used in financing
activities (211,000) (969,000)
------------- -------------
Net decrease (28,000) (4,073,000)
------------- -------------
Balance at beginning of period 6,017,000 8,077,000
------------- -------------
Balance at end of period $ 5,989,000 $ 4,004,000
============= =============
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
(loss) to consolidated Adjusted Earnings:
Three months ended Three months ended
March 31, 2013 March 31, 2012
------------------- -------------------
Net income (loss) $ 237,000 $ (294,000)
Loss from discontinued operations - 74,000
Income tax expense 38,000 -
Interest expense, net - 14,000
Depreciation and amortization 275,000 299,000
Stock based compensation expense 247,000 255,000
Litigation expense and non-routine
legal and advisory services for
corporate and governance matters 400,000 876,000
------------------ ------------------
Adjusted Earnings $ 1,197,000 $ 1,224,000
================== ==================
Contact: Steve Handy CFO 818-761-1002
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