Fourth Quarter Revenue Increases 223% Y-O-Y to $20.7 million;
Full Year Revenue Increases 275% Y-O-Y to $69.5 million
Cash Provided by Operations Grew 86% to $4.9 million for the Fourth
Quarter 2008; Increasing to $7.6 million for the Full Year 2008
from $144,000 in 2007
Company Expects Continued Revenue Growth and
Improved Profitability for 2009
STUDIO CITY, Calif., March 16, 2009 (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 twelve months ended December 31, 2008.
* Net cash from operating activities grew 86% to $4.9 million for the fourth quarter 2008 and increased to $7.6 million for the full year 2008 from $144,000 in 2007. * Ticketing Services discount tickets achieved a 62% increase in gross discount ticket sales to $53.9 million for the full year 2008 compared to $33.2 million for 2007. * Tix4Tonight sold more than 1 million discount show tickets and more than 260,000 dinner reservations in 2008. * Live Entertainment achieved $44.6 million in revenue for the full year 2008. * As of December 31, 2008 the Company had a cash balance of $9.2 million and no debt. * Due to a goodwill and intangible asset impairment of $33.1 million recorded in the fourth quarter, operating loss for the year was $34.7 million.
Discussion of Fourth Quarter 2008 Results
The Company generated $4.9 million of net cash provided by operating activities during the fourth quarter of 2008, driven by its Ticketing Services and Live Entertainment subsidiaries, compared to $2.7 million for the same period last year. The Company increased its cash balance to $9.2 million as of December 31, 2008 compared to $7.4 million as of December 31, 2007. In addition, the Company has no debt.
Fourth quarter 2008 revenue increased 223% to $20.7 million, compared to $6.4 million recorded in the comparable period last year. Net loss for the fourth quarter was $(33.0) million, or $(1.02) per diluted common share, compared to a loss of $(1.1) million, or $(0.04) per diluted common share, reported in the fourth quarter of 2007. The Company recorded an impairment charge of $33.1 million related to the goodwill and intangible assets of Exhibit Merchandising. The impairment charge is due to the weakened economic environment and the decline in the financial markets resulting in a significant decline in comparable market multiples relative to expected cash flows and actual cash flows being less than originally projected. The non-cash impairment charge does not affect the Company's cash balances, liquidity or operating cash flows. There was no impairment charge for long-lived assets in 2007. As a result of the impairment charge related to intangible assets, the Company expects the expense associated with the amortization of intangible assets in 2009 to be approximately $2.0 million less as compared to 2008.
Mitch Francis, President and CEO of Tix, commented, "The strong revenue growth and cash flow generated during the fourth quarter is reflective of the strength of our business model. We continued to leverage the complementary nature of our three key business components of Ticketing, Exhibit Merchandising and Live Entertainment to increase our operating profitability."
Mr. Francis continued, "During the fourth quarter our ticketing services and live entertainment businesses greatly benefitted from a more value-oriented consumer looking for lower-priced, locally-based quality entertainment. Our discount ticketing services expanded its presence by opening our sixth discount ticket location in the heart of the Las Vegas strip and capitalized on our expertise and success in the discount ticket arena by partnering with Costco Wholesale Corporation to launch a co-branded national discount ticketing website exclusively for Costco Members. Our Live Entertainment subsidiary had an exceptional quarter, reflecting the skill and experience of its management team to choose and secure shows with strong track records and that provide audiences with comfort and familiarity in today's economic turmoil."
Discussion of Full Year 2008 Results
The Company's revenue for the year ended December 31, 2008 increased 275% to $69.5 million, compared to $18.6 million during the same period in 2007. Net loss for the full year 2008 was $(34.7) million, or $(1.09) per common share, compared to 2007 net loss of $(16.3) million, or $(0.70) per diluted common share. The Company recorded an impairment charge of $33.1 million in the fourth quarter related to the goodwill and intangible assets of Exhibit Merchandising as discussed in the fourth quarter commentary.
The Company generated $7.6 million net cash provided by operating activities in 2008 compared to $144,000 for 2007.
Under the Company's share repurchase program, from August 29 through December 31, 2008, the Company purchased 732,370 shares for $2.1 million, or an average of $2.86 per share.
"Looking back over the past twelve months, I am proud of the milestones we achieved. We significantly increased the number and value of discount tickets and dinner reservations sold, and expanded our discount ticket presence in Las Vegas and nationwide. We achieved a 62% increase in gross discount ticket sales in 2008, contributing to increased profitability in this subsidiary. Our Live Entertainment subsidiary accomplished a successful 46-city Christmas tour as part of our two-year producing partnership with 'The Christmas Music of Mannheim Steamroller,' and obtained the rights to promote 'Rain, The Beatles Experience' for the 10-city 2008-2009 tour. And finally, we opened our first foreign museum stores in London and Vienna for 'Tutankhamun and The Golden Age of the Pharaohs,' and 'Tutankhamun and The Golden Pharaohs,'" continued Mr. Francis.
Fourth Quarter Segmental Operating Results
Overall revenue from the Company's Ticketing Services segment, which includes revenue from both discount and premium ticket sales was $3.9 million for the quarter compared to $4.5 million in the prior year period. The decline in Ticketing Services revenues was the result of a $1.8 million decline in revenues from premium ticket sales due to a change in business strategy designed to increase profitability, and reduce the associated risk, which was offset by a $1.2 million increase in our discount ticketing operations. As a result of this change in business strategy and the strength of our discount ticketing business, operating income strengthened significantly to $1.5 million during the quarter compared to an operating loss of $(11.0) in the prior year period.
The Company's discount ticketing division, Tix4Tonight, increased the number of discount show tickets sold by 34% to 302,000 tickets, and gross discount show ticket sales for the quarter ended December 31, 2008 increased 57% to $16.5 million. Revenue for the discount ticket division grew 57% to $16.5 million during the quarter ended December 31, 2008 compared to $10.5 million in the prior year period. In addition, miscellaneous revenue from discount golf, and dinner reservations increased to $379,000 from $347,000 in the prior year period. Revenue from the Company's premium ticketing division, Tix4AnyEvent, was $85,000 compared to $1.9 million in the prior year period.
Tix Productions (TPI), comprised of Magic Arts and Entertainment and New Space Entertainment, generated $14.3 million of revenue during the seasonally strong fourth quarter of 2008 and operating income of $1.0 million, a sequential improvement over the operating loss of $500,000 in the third quarter of 2008. 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," "The Christmas Music of Mannheim Steamroller" and "Bob The Builder Live." The Company is currently developing "101 Dalmatians! The Musical," scheduled for the fourth quarter 2009.
Exhibit Merchandising (EM), which operates retail specialty stores for touring museum exhibitions, generated revenue of $2.5 million during the quarter, an increase of 30.6% compared to $1.9 million in the prior year period. Operating loss for the quarter was $34.0 million, which includes an impairment charge of $33.1 million, compared to $863,000 in the prior year period. Revenue was derived from four museum gift shops during the quarter including King Tut and the World of the Pharaohs, which opened in Dallas in October, Tut II, which opened in Atlanta November 15, the Egyptian Undersea Treasures in Madrid that was open through December 31, and the Real Pirates Exhibit, which closed in Philadelphia November 2 and opened in Chicago February 25, 2009.
Mr. Francis concluded, "Building upon our successes in 2008, we continue to experience strong organic revenue growth as we enter 2009. Our Las Vegas operations experienced approximately 58% increases in discount ticket sales for both January and February year-over-year, as visitors continue to seek more value for their money. Pre-sales for our Live Entertainment offerings have been good, and we expect the trend of consumers choosing entertainment closer to home to benefit our Exhibit Merchandising business throughout the year. We will also be adding to our production offerings in 2009 and more location stops for many of our existing shows. While 2009 will prove exceptionally challenging for many companies, we believe our business is well positioned to benefit from a more value-oriented consumer, resulting in continued revenue growth and improved profitability in 2009."
Investor Conference Call
The Company will host a conference call for investors today, Monday, March 16, 2009, beginning at 1:30 p.m. Pacific / 4:30 p.m. Eastern. Participants may access the call by dialing 800-762-8908 (domestic) or 480-248-5081 (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 Monday, March 30, 2009. To access the replay, please dial 800-406-7325 (domestic) or 303-590-3030 (international), passcode 4024709.
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
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Three Months Ended
December 31,
2008 2007
------------ ------------
Revenues $ 20,679,000 $ 6,406,000
------------ ------------
Operating expenses:
Direct costs of revenues 14,309,000 3,553,000
Selling and marketing expenses 616,000 12,060,000
General and administrative expenses 4,263,000 (8,984,000)
Impairment of goodwill 25,445,000 --
Impairment of intangible assets 7,687,000 --
Depreciation and amortization 1,226,000 911,000
------------ ------------
Total costs and expenses 53,546,000 7,540,000
------------ ------------
Loss from operations (32,867,000) (1,134,000)
------------ ------------
Other income (expense):
Other income (110,000) (4,000)
Interest income 7,000 24,000
Interest expense (4,000) (5,000)
------------ ------------
Other income (expense), net (107,000) 15,000
------------ ------------
Net loss (32,974,000) (1,119,000)
Other comprehensive loss:
Foreign currency translation adjustments 123,000 --
------------ ------------
Comprehensive loss $(32,851,000) $ (1,119,000)
============ ============
Net loss per common share - basic and
diluted $ (1.02) $ (0.04)
============ ============
Weighted average common shares outstanding
- basic and diluted 32,386,209 30,274,752
============ ============
TIX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Years Ended December 31,
--------------------------
2008 2007
------------ ------------
Revenues $ 69,545,000 $ 18,567,000
------------ ------------
Operating expenses:
Direct costs of revenues 48,490,000 11,672,000
Selling and marketing expenses 3,008,000 13,475,000
General and administrative expenses,
including non-cash equity-based costs of
$2,336,000, $3,284,000, and $1,326,000 in
2008, 2007, and 2006, respectively
(including $1,753,000, $682,000, and
$658,000 for employees, officers and
directors in 2008, 2007, and 2006,
respectively) 15,193,000 8,117,000
Impairment of goodwill 25,445,000
Impairment of intangibles assets 7,687,000
Depreciation and amortization 4,601,000 1,668,000
------------ ------------
Total costs and expenses 104,424,000 34,932,000
------------ ------------
Loss from operations (34,879,000) (16,365,000)
------------ ------------
Other income (expense):
Other income 175,000 28,000
Gain on settlement with lender -- --
Gain on settlement of debt -- --
Write-off deferred offering costs -- --
Interest income 59,000 96,000
Interest expense (19,000) (104,000)
------------ ------------
Other income (expense), net 215,000 20,000
------------ ------------
Income (loss) from continuing operations (34,664,000) (16,345,000)
Income from discontinued operations,
primarily non-cash gain resulting from
settlement of debts
------------ ------------
Net income (loss) $(34,664,000) $(16,345,000)
Other comprehensive loss:
Foreign currency translation adjustments (29,000) --
------------ ------------
Comprehensive income (loss) $(34,693,000) $(16,345,000)
============ ============
Net income (loss) per common share - basic
and diluted $ (1.09) $ (0.70)
============ ============
Weighted average common shares outstanding:
Basic 31,962,375 23,446,349
============ ============
Diluted 31,962,375 23,446,349
============ ============
TIX CORPORATION AND SUBSIDIARIES
SEGMENTAL INFORMATION
Ticketing Exhibit Live
Services Merchandising Entertainment
------------------------------------------
2008
Revenue $13,952,000 $ 11,030,000 $ 44,563,000
Direct operating expenses 5,725,000 6,877,000 35,888,000
Selling, general and
administrative expenses 2,720,000 3,681,000 6,146,000
Impairment of goodwill 25,445,000
Impairment of intangible
assets 7,687,000
Depreciation and
amortization 206,000 3,173,000 916,000
------------ ------------ ------------
Operating income (loss) $ 5,301,000 $(35,833,000) $ 1,613,000
============ ============ ============
Total assets $ 3,738,000 $ 10,462,000 $ 10,449,000
============ ============ ============
2007
Revenue $ 14,284,000 $ 4,283,000 $ --
Direct operating expenses 8,829,000 2,843,000 --
Selling, general and
administrative expenses 15,029,000 905,000 --
Depreciation and
amortization 195,000 1,229,000 --
------------ ------------ ------------
Operating income (loss) $ (9,769,000) $ (694,000) $ --
============ ============ ============
Total assets $ 2,977,000 $ 47,224,000 $ --
============ ============ ============
2006
Revenue $ 5,388,000 $ $ --
Direct operating expenses 2,173,000 --
Selling, general and
administrative expenses 1,214,000 --
Depreciation and
amortization 159,000 --
------------ ------------ ------------
Operating income (loss) $ 1,842,000 $ -- $ --
============ ============ ============
Total assets $ 1,699,000 $ $ --
============ ============ ============
Corporate Consolidated
Expenses and Combined
---------------------------
2008
Revenue $ -- $ 69,545,000
Direct operating expenses -- 48,490,000
Selling, general and administrative
expenses 5,654,000 18,201,000
Impairment of goodwill 25,445,000
Impairment of intangible assets 7,687,000
Depreciation and amortization 306,000 4,601,000
------------ ------------
Operating income (loss) $ (5,960,000) $(34,879,000)
============ ============
Total assets $ 4,199,000 $ 28,848,000
============ ============
2007
Revenue $ -- $ 18,567,000
Direct operating expenses -- 11,672,000
Selling, general and administrative
expenses 5,658,000 21,592,000
Depreciation and amortization 244,000 1,668,000
------------ ------------
Operating income (loss) $ (5,902,000) $(16,365,000)
============ ============
Total assets $ 4,967,000 $ 55,168,000
============ ============
2006
Revenue $ $ 5,388,000
Direct operating expenses 2,173,000
Selling, general and administrative
expenses 2,559,000 3,773,000
Depreciation and amortization 5,000 164,000
------------ ------------
Operating income (loss) $ (2,564,000) $ (722,000)
============ ============
Total assets $ 933,000 $ 2,632,000
============ ============
TIX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2008 2007
------------ ------------
Assets
Current assets:
Cash $ 9,192,000 $ 7,417,000
Other receivables -- 345,000
Accounts receivable, including show
revenues earned but not billed 1,104,000 129,000
Inventory, net 3,320,000 3,938,000
Prepaid expenses and other current assets 867,000 178,000
------------ ------------
Total current assets 14,483,000 12,007,000
------------ ------------
Property and equipment
Office equipment and furniture 1,816,000 1,413,000
Equipment under capital lease 408,000 386,000
Leasehold improvements 364,000 313,000
------------ ------------
Property and equipment, cost basis 2,588,000 2,112,000
Less accumulated depreciation and
amortization (1,155,000) (664,000)
------------ ------------
Total property and equipment, net 1,433,000 1,448,000
------------ ------------
Other assets:
Intangible assets:
Goodwill 5,639,000 27,115,000
Intangibles, net 6,751,000 14,524,000
------------ ------------
Total intangible assets 12,390,000 41,639,000
Capitalized theatrical costs 459,000 --
Deposits and other assets 83,000 74,000
------------ ------------
Total other assets 12,932,000 41,713,000
------------ ------------
------------ ------------
Total assets $ 28,848,000 $ 55,168,000
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 4,822,000 $ 1,945,000
Accrued expenses 1,515,000 1,082,000
Current portion of capital lease
obligations 51,000 45,000
Deferred revenue 100,000 54,000
------------ ------------
Total current liabilities 6,488,000 3,126,000
------------ ------------
Non-current liabilities:
Capital lease obligations, less current
portion 78,000 108,000
Deferred rent 85,000 188,000
------------ ------------
Total non-current liabilities 163,000 296,000
------------ ------------
Commitments and contingencies
Stockholder's equity:
Preferred stock, $.01 par value; 500,000
shares authorized; none issued -- --
Common Stock, $.08 par value; 100,000,000
shares authorized; 33,078,233 shares and
30,402,325 shares issued at December 31,
2008 and December 31, 2007 respectively 2,646,000 2,432,000
Additional paid-in capital 88,062,000 81,034,000
Cost of shares held in treasury (732,370
shares at December 31, 2008 and no
shares at December 31, 2007 respectively) (2,098,000) --
Accumulated deficit (66,384,000) (31,720,000)
Accumulated other comprehensive loss (29,000) --
------------ ------------
Total stockholders' equity 22,197,000 51,746,000
------------ ------------
Total liabilities and stockholders' ------------ ------------
equity $ 28,848,000 $ 55,168,000
============ ============
TIX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
YEARS ENDED DECEMBER 31,
--------------------------
2008 2007
------------ ------------
Cash flows from operating activities:
Net income (loss) $(34,664,000) $(16,345,000)
Adjustments to reconcile net income (loss)
to cash provided by operating activities:
Depreciation and amortization 491,000 294,000
Impairment of goodwill 25,445,000
Impairment of intangible assets 7,687,000
Amortization of intangible assets 4,110,000 1,375,000
Gain on settlement with lender -- --
Gain on settlement of debt -- --
Fair valued common stock issued for
services to employees and consultants 442,000 8,892,000
Fair value of options issued to employees
and directors 1,706,000 1,136,000
Fair value of warrants issued to
consultants 159,000 3,440,000
Common stock issued to employees -- 682,000
Fair value of vested options and warrants -- --
Amortization of loan discount -- --
Write-off of deferred financing costs -- --
Change in allowance of inventory (44,000) --
(Increase) decrease in:
Accounts receivable (456,000) (408,000)
Inventory 1,077,000 (56,000)
Due from related party -- --
Prepaid expenses and other current
assets (268,000) 55,000
Capitalized theatrical costs, deposits
and other assets (469,000) (7,000)
Increase (decrease) in:
Accounts payable and accrued expenses 2,419,000 1,019,000
Deferred revenue 38,000 53,000
Deferred rent (103,000) 14,000
Liabilities related to discontinued
operations -- --
------------ ------------
Net cash provided by operating
activities 7,570,000 144,000
------------ ------------
Cash flows from investing activities:
Purchase of Domain Names -- (132,000)
Purchases of property and equipment (454,000) (678,000)
Purchase of Exhibit Merchandising -- (11,436,000)
Purchase of Magic Arts & Entertainment,
net of cash acquired (1,971,000) --
Purchase of NewSpace Entertainment, net of
cash acquired (1,254,000) --
Purchase of ticket inventory from AnyEvent -- (96,000)
Acquisition of AnyEvent -- (300,000)
------------ ------------
Net cash used in investing activities (3,679,000) (12,642,000)
------------ ------------
Cash flows from financing activities:
Payments on notes payable
Proceeds from note payable, stockholder -- 2,000,000
Repayment of note payable, stockholder -- (2,000,000)
Proceeds from common stock subscription -- 17,784,000
Cost of Treasury Stock (2,098,000) --
Payments on capital lease obligations (46,000) (41,000)
Payments on convertible debentures -- --
Net proceeds from sale of common stock and
warrants -- --
Net proceeds from exercise of options and
warrants 54,000 229,000
------------ ------------
Net cash provided by (used in)
financing activities (2,090,000) 17,972,000
------------ ------------
Effect of exchange rate changes on cash (26,000) --
Change in Cash:
Net increase 1,775,000 5,474,000
Balance at beginning of period 7,417,000 1,943,000
------------ ------------
Balance at end of period $ 9,192,000 $ 7,417,000
============ ============
TIX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
YEARS ENDED DECEMBER 31,
--------------------------
2008 2007
------------ ------------
Supplemental disclosures of cash flow
information
Cash paid for
Income taxes $ -- $ --
Interest $ 19,000 $ 104,000
============ ============
Non-cash activities:
Issuance of 476,190 shares of common stock
in conjunction with acquisition of Magic
Arts & Entertainment - Florida, Inc. $ 2,257,000 $ --
============ ============
Issuance of 571,428 shares of common stock
in conjunction with acquisition of
NewSpace Entertainment, Inc. $ 2,595,000 $ --
============ ============
Issuance of 137,500 shares of common stock
in conjunction with the acquisition of
John's Tickets, LLC $ -- $ 550,000
============ ============
Issuance of 5 million shares of common
stock in conjunction with the acquisition
of Exhibit Merchandising, LLC $ -- $ 35,000,000
============ ============
Issuance of common stock to officers $ -- $ 671,000
============ ============
Issuance of common stock as payment for
accrued bonus $ 29,000 $ --
============ ============
Equipment acquired through capital lease $ 22,000 $ --
============ ============