Third Quarter Revenue Increases 55% Y-O-Y to $8.8 million;
First Nine Months Revenue Increases 300% Y-O-Y to $48.9 million
Cash Provided by Operations Grows to $2.6 million for the
First Nine Months of 2008, Compared to Cash Used in Operations of
($2.5) Million in the Prior Year Period
Company Expects Continued Revenue Growth and Improved
Profitability for the Fourth Quarter 2008
STUDIO CITY, Calif., Nov. 12, 2008 (GLOBE NEWSWIRE) -- Tix Corporation (Nasdaq:TIXC), a leading integrated entertainment company providing discount and premium ticketing services, event and branded merchandising, and production/promotion of live concert and theatrical events, today reported results for the three and nine months ended September 30, 2008.
Third quarter 2008 revenue increased 55% to $8.8 million, compared to $5.7 million recorded in the comparable period last year. Net loss for the third quarter decreased to $1.0 million, or $(0.03) per diluted share, compared to a loss of $8.5 million, or $(0.34) per diluted share, reported in the third quarter of 2007.
The Company's revenue for the nine months ended September 30, 2008 was $48.9 million, compared to $12.2 million during the same period in 2007. Net loss for the first nine months of 2008 improved to $1.7 million, or $(0.06) per diluted share, compared to the first nine months 2007 net loss of $15.2 million, or $(0.72) per diluted share.
The Company generated $1.6 million in EBITDA (earnings before interest, taxes, depreciation, and amortization) for the first nine months of 2008 compared to an EBITDA loss during the same period last year of $14.4 million.
In August, the Company's Board of Directors authorized a share repurchase program allowing Tix Corporation to repurchase up to one million shares of its common stock from time to time in the open market or privately negotiated transactions. The stock repurchase program will be in effect for up to one year from August 25, 2008. Under the repurchase program, from August 29 through September 29 the Company purchased 350,470 shares for $1.13 million, or an average of $3.22 per share.
"We are very pleased with our overall results during the third quarter and first nine of 2008 as strong revenue growth, cash flow and improving expense margins highlight the success of our strategy to leverage discount ticketing with our merchandising and entertainment businesses," said Mitch Francis, President and CEO of Tix Corporation. "Even in this challenging economic environment, the strength of our business model is allowing us to expand, by opening our sixth discount ticket location in Las Vegas in early October. In addition, we are leveraging our physical discount ticket operations in Las Vegas to expand nationwide with our ticketing website HalfPriceTickets.com. We continue to work on strategic alliances to launch the website."
Mr. Francis continued, "During the quarter, our overall operating performance improved as we benefitted from leverage in our Ticketing Services business and significantly lowered corporate expenses. Our Ticketing Service segment improved its operating income by $2.0 million compared to the third quarter of 2007. This was offset by an operating loss in our Exhibit Merchandising due to lower than expected attendance for King Tut in London and Vienna. We are already experiencing higher attendance for the Dallas store and expect the same for Atlanta which opens next week. In addition, we experienced a higher operating loss on a sequential basis for our newest division, Live Entertainment, due to the expected seasonally slower third quarter."
Overall revenue from the Company's Ticketing Services subsidiary, Tix4Tonight, which includes revenue from both discount and premium ticket sales, increased 11% to $3.7 million for the third quarter of 2008 compared to $3.4 million in the prior year period. Operating income was $1.5 million during the third quarter compared to an operating loss of $464,000 in the prior year period. The Company's discount ticketing division, Tix4Tonight increased the number of discount show ticket sold by 59% to 283,000 tickets and gross discount show ticket sales for the third quarter increased 74% to $14.1 million. Revenue for the discount ticket division grew 128% to $3.2 million during the third quarter of 2008 compared to $1.4 million in the prior year period. In addition, miscellaneous revenue from discount golf, and dinner reservations increased to $300,000 from $100,000 in the prior year period.
Revenue from the Company's premium ticketing division, Tix4AnyEvent, was $300,000 compared to $1.9 million in the prior year period. The lower revenue was due to a change in business strategy designed to increase profitability, and the sale of premium tickets for several major concerts in 2007 for which there was no corresponding activity in 2008.
Exhibit Merchandising (EM), which operates retail specialty stores for touring museum exhibitions, generated revenue of $2.4 million during the third quarter of 2008, and an operating loss of $605,000. Revenue was derived from four museum gift shops including King Tut and the World of the Pharaohs, which closed in London in August and moved to Dallas in October, Tut II in Vienna, Austria, which operated through September and will open in Atlanta November 15, the Egyptian Undersea Treasures in Madrid that has been extended through December 31, and the Real Pirates Exhibit.
Tix Productions (TPI) comprised of Magic Arts and Entertainment and New Space Entertainment, generated $2.7 million of revenue during the seasonally slower third quarter of 2008 and an operating loss of $500,000. Operating income for the nine months ended September 30, 2008 was $609,000. TPI currently produces the North American tours of "Michael Flatley's Lord of the Dance", "The Magic of David Copperfield", "Jesus Christ Superstar", "Rain, The Beatles Experience", "Mannheim Steamroller" and "Bob The Builder Live." The Company is currently working on "101 Dalmations! The Musical!," scheduled for the fourth quarter 2009.
Mr. Francis concluded, "Looking ahead to the remainder of the year and beyond, we believe locally-based entertainment will remain in demand in the coming months as consumers stay closer to home and travel less. This bodes well for our Exhibit and Live Entertainment businesses, where advance ticket sales are doing quite well for our fourth quarter and first quarter 2009 shows. We also believe that while visitation is likely to be down in Las Vegas over the coming six to twelve months, those who do visit Vegas are more inclined to seek out value for their money. In fact, as testament to our leadership position in providing the consumer with value, we achieved another record month in October by selling $5.4 million in gross discount tickets in Las Vegas. This represented just under 100,000 discount show tickets sold and approximately 25,000 discount dinner reservations. Both of these performances are records for us and are further evidence that our discount ticket business continues to buck the trend in a weak consumer environment."
Non-GAAP Financial Measures
The following includes the financial measure of performance earnings before interest, income taxes, depreciation and amortization, or EBITDA, that is a commonly used measure of performance in the entertainment industry. EBITDA is not a measure of performance calculated in accordance with accounting principles generally accepted in United States of America or GAAP. Management has historically evaluated its operating performance with this non-GAAP measure.
EBITDA is presented solely as a supplemental disclosure because (1) management believes it enhances an overall understanding of its past and current performance; (2) management believes it is a useful tool for investors to assess the operating performance of the business in comparison to other entertainment businesses since EBITDA excludes certain items that may not be indicative of management's operating results; (3) measures that are comparable to EBITDA are often used as an important basis for the valuation of entertainment companies; and (4) management uses EBITDA internally to evaluate its operating performance in comparison to its competitors.
The use of EBITDA has certain limitations. EBITDA should be considered in addition to, not as a substitute for or superior to any GAAP financial measure including net income as an indicator of management's performance or cash flows provided by operating activities as an indicator of the Company's liquidity, nor should it be considered as an indicator of management's overall performance. Management's calculation of EBITDA maybe different from the calculation of EBITDA or other similarly titled measurements used by other entertainment companies and therefore comparability may be limited. EBITDA eliminates certain substantial recurring items from net income, such as depreciation, amortization, interest expense and income taxes. Each of these items has been incurred in the past, will continue to be incurred in the future and should be considered in the overall evaluation of the Company's results. We compensate for these limitations by providing the relevant disclosure of depreciation and amortization, interest expense and income taxes are excluded in the calculation of EBITDA both in the reconciliation to the GAAP financial measure of net income (loss) and in the consolidated financial statements and related footnotes, all of which should be considered when evaluating the Company's results. Management strongly encourages readers to review our financial information in its entirety and not to rely on a single measure. A reconciliation of EBITDA to net income (loss) follows:
Three months Three months
ended ended
Sept 30, 2008 Sept 30, 2007
------------ ------------
Net loss $ (986,000) $ (8,510,000)
Interest
income $ 7,000 $ 60,000
Interest
expense (5,000) (53,000)
------------ ------------
Net interest
income
(expense) $ 2,000 2,000 $ 7,000 7,000
============ ============
Depreciation 126,000 81,000
Amortization 1,025,000 494,000
------------ ------------
Income taxes -- --
------------ ------------
EBITDA $ 163,000 $ (7,942,000)
============ ============
Nine months Nine months
ended ended
Sept 30, 2008 Sept 30, 2007
------------ ------------
Net loss $ (1,690,000) $(15,277,000)
Interest
income $ 52,000 $ 72,000
Interest
expense (15,000) (99,000)
------------ ------------
Net interest
income
(expense) $ 37,000 37,000 $ (27,000) (27,000)
============ ============
Depreciation 363,000 180,000
Amortization 3,012,000 579,000
Income Taxes -- --
------------ ------------
EBITDA $ 1,648,000 $(14,441,000)
============ ============
Investor Conference Call
The company will host a conference call for investors today, Wednesday, November 12, beginning at 2:00 p.m. Pacific / 5:00 p.m. Eastern. Participants may access the call by dialing 800-762-9441 (domestic) or 480-629-1990 (international). In addition, the call will be webcast via the company's Web site at http://www.tixcorp.com, Investor Relations, where it will also be archived. A telephone replay will be available through Wednesday, November 26, 2008. To access the replay, please dial 800-406-7325 (domestic) or 303-590-3030 (international), passcode 3941903.
About Tix Corporation
Tix Corporation is an integrated entertainment company providing discount and premium ticketing services, event and branded merchandising, and production/promotion of live concert and theatrical events. It currently operates six prime locations in Las Vegas under the Tix4Tonight marquee -- offering up to a 50 percent discount for same-day shows, concerts, attractions and sporting events. It also offers discount reservations for golf and dining at its sales locations in Las Vegas. The Company also offers premium tickets to concerts, theater and sporting events throughout the United States under its Tix4AnyEvent.com brand. Its Exhibit Merchandising operation is engaged in branded merchandise development and sales activities related to museum exhibitions and other events -- including the King Tutankhamun and Real Pirates tours, selling themed souvenir memorabilia and collector's items in specialty stores in conjunction with the specific events and venues. The Company's newest division, Tix Productions, is dedicated to live concert and theatrical promotion and production throughout the United States, Canada and Europe and operates under the banners of its recent acquisitions, Magic Arts and Entertainment and NewSpace Entertainment.
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 filings with the Securities and Exchange Commission. The Company assumes no obligation to update these forward-looking statements.
TIX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS (UNAUDITED)
Three Months Ended
September 30,
--------------------------
2008 2007
------------ ------------
Revenues $ 8,839,000 $ 5,702,000
------------ ------------
Operating expenses:
Direct costs of revenues 5,127,000 4,494,000
Selling and marketing expenses. 217,000 809,000
General and administrative expenses,
including non-cash equity-based costs
of $560,000 and $8,008,000 in 2008 and
2007, respectively (including $479,000
and $1,140,000 for officers and
directors in 2008 and 2007,
respectively). 3,409,000 8,369,000
Depreciation and amortization 1,151,000 575,000
------------ ------------
Total costs and expenses 9,904,000 14,247,000
------------ ------------
Operating Loss (1,065,000) (8,545,000)
------------ ------------
Other income (expense):
Other income 77,000 28,000
Interest income 7,000 60,000
Interest expense (5,000) (53,000)
------------ ------------
Other income (expense), net 79,000 35,000
------------ ------------
Net loss (986,000) (8,510,000)
Other comprehensive loss
Foreign currency translation adjustments (108,000) --
------------ ------------
Comprehensive loss $ (1,094,000) $ (8,510,000)
============ ============
Net loss per common share
- basic and diluted $ (0.03) $ (0.34)
------------ ------------
Weighted average common shares outstanding
- basic and diluted 32,912,630 25,330,047
============ ============
TIX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS (UNAUDITED)
Nine months ended
September 30,
------------ ------------
2008 2007
------------ ------------
Revenues $ 48,866,000 $ 12,161,000
------------ ------------
Operating expenses:
Direct costs of revenues 34,181,000 8,119,000
Selling and marketing expenses. 2,392,000 1,415,000
General and administrative expenses,
including non-cash equity-based costs of
$1,841,000 and $13,126,000 in 2008 and
2007, respectively (including $1,255,000
and $2,455,000 for officers and directors
in 2008 and 2007, respectively). 10,930,000 17,101,000
Depreciation and amortization 3,375,000 757,000
------------ ------------
Total costs and expenses 50,878,000 27,392,000
------------ ------------
Operating loss (2,012,000) (15,231,000)
------------ ------------
Other income (expense):
Other income 285,000 31,000
Interest income 52,000 72,000
Interest expense (15,000) (99,000)
------------ ------------
Other income (expense), net 322,000 4,000
------------ ------------
Net loss (1,690,000) (15,227,000)
Other comprehensive loss:
Foreign currency translation adjustments (152,000) --
------------ ------------
Comprehensive loss $ (1,842,000) $(15,227,000)
============ ============
Net loss per common share
- basic and diluted $ (0.06) $ (0.72)
------------ ------------
Weighted average common shares outstanding
- basic and diluted 31,791,002 21,161,157
============ ============
TIX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2008 2007
----------- -----------
(Unaudited)
Assets
Current assets:
Cash $ 5,154,000 $ 7,417,000
Other receivables -- 345,000
Accounts receivable, net 493,000 129,000
Inventory, net 4,277,000 3,938,000
Prepaid expenses and other current assets 1,857,000 178,000
----------- -----------
Total current assets 11,781,000 12,007,000
----------- -----------
Property and equipment
Office equipment and furniture 1,763,000 1,413,000
Equipment under capital lease 408,000 386,000
Leasehold improvements 361,000 313,000
----------- -----------
2,532,000 2,112,000
Less accumulated depreciation (1,026,000) (664,000)
----------- -----------
Total property and equipment, net 1,506,000 1,448,000
----------- -----------
Other assets:
Intangible assets:
Goodwill 31,085,000 27,115,000
Intangibles, net 15,535,000 14,524,000
----------- -----------
Total intangible assets 46,620,000 41,639,000
Capitalized theatrical costs 459,000 --
Deposits and other assets 96,000 74,000
----------- -----------
Total other assets 47,175,000 41,713,000
----------- -----------
----------- -----------
Total assets $60,462,000 $55,168,000
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 2,721,000 $ 1,945,000
Accrued expenses 1,702,000 1,082,000
Current portion of capital
lease obligations 51,000 45,000
Deferred revenue 247,000 54,000
----------- -----------
Total current liabilities 4,721,000 3,126,000
----------- -----------
Non-current liabilities:
Capital lease obligations, less
current portion 89,000 108,000
Deferred rent 100,000 188,000
----------- -----------
Total non-current liabilities 189,000 296,000
----------- -----------
Stockholder's equity:
Preferred stock, $.01 par value; 500,000
shares authorized; none issued -- --
Common Stock, $.08 par value; 100,000,000
shares authorized; 33,024,639 shares and
30,402,325 shares ssued at
September 30, 2008 and December 31, 2007
respectively 2,642,000 2,432,000
Additional paid-in capital 87,600,000 81,034,000
Cost of shares held in treasury (350,470
shares at September 30, 2008 and no
shares at December 31, 2007 respectively) (1,128,000) --
Accumulated deficit (33,410,000) (31,720,000)
Accumulated other comprehensive loss (152,000) --
----------- -----------
Total stockholders' equity 55,552,000 51,746,000
----------- -----------
----------- -----------
Total liabilities and
stockholders' equity $60,462,000 $55,168,000
=========== ===========