STUDIO CITY, CA
-- (Marketwired)
-- 08/04/14
Tix Corporation (the "Company") (OTCQX: TIXC), a leading provider of discount ticketing services, today reported results for the second quarter and first six months ended June 30, 2014.
Tix Corporation's business is operated by its wholly owned subsidiary Tix4Tonight, which sells discount show tickets from eleven 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 June 30, 2014 and 2013
Second quarter 2014 revenues increased 11% to $5.7 million compared with $5.2 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. Additionally, the Easter holiday season, which is generally beneficial to our business, occurred in April of this year compared to March of the prior year.
Second quarter 2014 direct operating expenses increased 9% to $2.3 million compared with $2.1 million for the same period a year ago. Included in these expenses are payroll costs, rents, and utilities. The increase in expense was due to the increase in the number of discount ticket locations as compared to the same period of the prior year.
Second quarter 2014 selling, general and administrative expenses were $1.8 million compared with $2.1 million for the same period a year ago. Included in the three months ended June 30, 2013 expenses are $220,000 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 $64,000, or 3%, to $1.8 million compared to $1.9 million for same period of the prior year. The decrease in expenses of $64,000 was related to the reduction in stock based compensation expense offset by increased professional services fees and bank fees related to our senior secured promissory note.
Second quarter 2014 net income was $1.2 million, or $0.07 per diluted common share, as compared to a net income of $579,000, or $0.02 per diluted common share, reported for the same period a year ago. Adjusted Earnings (as defined and explained below) for the second quarter 2014, which includes adjustments for items such as expenses related to litigation and related legal matters described below, was $1.6 million, or $0.09 per diluted common share, as compared to Adjusted Earnings of $1.4 million, or $0.06 per diluted common share, reported for the same period a year ago.
Six Months Ended June 30, 2014 and 2013
For the first six months of 2014, revenues increased 4% to $10.9 million compared with $10.4 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 six months of 2014, direct operating expenses increased 5% to $4.7 million compared with $4.5 million for the same period a year ago. The increase in expense was due to the increase in the number of discount ticket locations as compared to the same period of the prior year.
For the first six months of 2014, selling, general and administrative expenses were $3.8 million compared with $4.5 million for the same period a year ago. Included in these expenses are $109,000 of aggregate expenses during the first six months of 2014 and $620,000 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 $230,000, or 6%, to $3.7 million compared to $3.9 million for the same period of the prior year. The decrease in expenses of $230,000 was related to the reduction in stock based compensation expense offset by increased professional services fees and bank fees related to our senior secured promissory note.
For the first six months of 2014, net income was $1.7 million, or $0.09 per diluted common share, as compared to a net income of $816,000, or $0.03 per diluted common share, reported for the same period a year ago. Adjusted Earnings (as defined and explained below) for the first six months of 2014, which includes adjustments for items such as expenses related to litigation and related legal matters described below, was $2.7 million, or $0.15 per diluted common share, as compared to Adjusted Earnings of $2.6 million, or $0.11 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 overall performance this year. The increase in revenues from the replacement and enhancement of several of our booths, along with the dramatic reduction of legal expenses, account for the majority of our improved results. Our Las Vegas locations, coupled with our outstanding array of discount offerings, will continue to be a valuable service to Las Vegas tourists. I believe we are well positioned to deliver strong financial performance throughout the remainder of 2014."
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 eleven discount ticket stores in Las Vegas under its Tix4Tonight marquee. As the premier source of Las Vegas discounts, Tix4Tonight 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
June 30, December 31,
2014 2013
------------ ------------
(Unaudited)
Assets
Current assets:
Cash $ 6,173,000 $ 3,176,000
Accounts receivable 53,000 63,000
Prepaid expenses and other current assets 239,000 268,000
------------ ------------
Total current assets 6,465,000 3,507,000
------------ ------------
Property and equipment, net 1,001,000 884,000
------------ ------------
Other assets:
Intangible assets:
Goodwill 3,120,000 3,120,000
Intangibles, net 310,000 498,000
------------ ------------
Total intangible assets 3,430,000 3,618,000
Deposits and other assets 73,000 71,000
------------ ------------
Total other assets 3,503,000 3,689,000
------------ ------------
Total assets $ 10,969,000 $ 8,080,000
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable - shows and events $ 1,837,000 $ 693,000
Accounts payable and accrued expenses 645,000 939,000
Deferred revenue 61,000 29,000
Senior secured note payable - short term 1,015,000 -
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 3,815,000 5,471,000
Deferred rent obligations 108,000 133,000
Senior secured note payable - net of current
portion 3,000,000 -
Notes payable - net of current portion and
discount 540,000 728,000
Obligation for share purchases - net of current
portion 78,000 160,000
------------ ------------
Total liabilities 7,541,000 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 June 30, 2014 and
December 31, 2013, respectively 2,691,000 2,691,000
Additional paid-in capital 93,543,000 93,356,000
Obligation for share purchases (2,120,000) (2,088,000)
Cost of shares held in treasury (25,457,000) (25,413,000)
Accumulated deficit (65,229,000) (66,958,000)
------------ ------------
Total stockholders' equity 3,428,000 1,588,000
------------ ------------
Total liabilities and stockholders' equity $ 10,969,000 $ 8,080,000
============ ============
TIX CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(UNAUDITED)
Three Months Ended June 30,
----------------------------
2014 2013
------------- -------------
(Unaudited) (Unaudited)
Revenues $ 5,726,000 $ 5,160,000
------------- -------------
Operating expenses:
Direct costs of revenues 2,314,000 2,132,000
Selling, general and administrative expenses 1,847,000 2,131,000
Depreciation and amortization 203,000 269,000
------------- -------------
Total costs and expenses 4,364,000 4,532,000
------------- -------------
Operating income 1,362,000 628,000
------------- -------------
Other expense:
Other income - 5,000
Interest income 1,000 5,000
Interest expense (74,000) (21,000)
------------- -------------
Other expense, net (73,000) (11,000)
------------- -------------
Income before income tax expense 1,289,000 617,000
Income tax expense 51,000 38,000
------------- -------------
Net income 1,238,000 579,000
Other comprehensive loss:
Unrealized gain on available-for-sale
securities - 6,000
------------- -------------
Comprehensive income $ 1,238,000 $ 585,000
============= =============
Net income per common share
Net income per common share - basic $ 0.07 $ 0.02
============= =============
Net income per common share - diluted $ 0.07 $ 0.02
============= =============
Weighted average common shares outstanding -
basic 18,204,799 23,669,831
============= =============
Weighted average common shares outstanding -
diluted 18,273,174 23,730,388
============= =============
TIX CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(UNAUDITED)
Six Months Ended June 30,
--------------------------
2014 2013
------------ ------------
(Unaudited) (Unaudited)
Revenues $ 10,899,000 $ 10,443,000
------------ ------------
Operating expenses:
Direct costs of revenues 4,677,000 4,467,000
Selling, general and administrative expenses 3,783,000 4,524,000
Depreciation and amortization 463,000 544,000
------------ ------------
Total costs and expenses 8,923,000 9,535,000
------------ ------------
Operating income 1,976,000 908,000
------------ ------------
Other expense:
Interest income 1,000 11,000
Interest expense (167,000) (27,000)
------------ ------------
Other expense, net (166,000) (16,000)
------------ ------------
Income before income tax expense 1,810,000 892,000
Income tax expense 81,000 76,000
------------ ------------
Net income 1,729,000 816,000
Other comprehensive loss:
Unrealized gain on available-for-sale
securities - 7,000
------------ ------------
Comprehensive income $ 1,729,000 $ 823,000
============ ============
Net income per common share
Net income per common share - basic $ 0.09 $ 0.03
============ ============
Net income per common share - diluted $ 0.09 $ 0.03
============ ============
Weighted average common shares outstanding -
basic 18,211,758 23,669,831
============ ============
Weighted average common shares outstanding -
diluted 18,294,632 23,726,956
============ ============
TIX CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended June 30,
--------------------------
2014 2013
------------ ------------
(Unaudited) (Unaudited)
Cash flows from operating activities:
Net income $ 1,729,000 $ 816,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 275,000 290,000
Non-cash and accrued interest 20,000 12,000
Realized loss on available-for-sale
securities arising during the period - 15,000
Amortization of intangible assets 188,000 254,000
Fair value of options and warrants issued to
employees and directors 160,000 494,000
(Increase) decrease in:
Accounts receivable 10,000 12,000
Prepaid expenses and other assets 27,000 236,000
Increase (decrease) in:
Accounts payable - shows and events 1,144,000 (863,000)
Accounts payable and accrued expenses (294,000) (212,000)
Deferred revenue 32,000 (73,000)
Deferred rent obligations (25,000) (3,000)
------------ ------------
Net cash provided by operating
activities 3,266,000 978,000
------------ ------------
Cash flows from investing activities:
Purchases of property and equipment (392,000) (292,000)
Purchase of short-term investments - (20,000)
------------ ------------
Net cash used in investing activities (392,000) (312,000)
------------ ------------
Cash flows from financing activities:
Cash received from issuance of senior secured
note payable 4,000,000 -
Repayment of notes payable (3,743,000) -
Purchase of treasury shares (44,000) -
Obligation for share purchases (90,000) (212,000)
------------ ------------
Net cash provided by (used in) financing
activities 123,000 (212,000)
------------ ------------
Net increase 2,997,000 454,000
------------ ------------
Cash, balance at beginning of period 3,176,000 6,017,000
------------ ------------
Cash, balance at end of period $ 6,173,000 $ 6,471,000
============ ============
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, 2014 June 30, 2013
------------- -------------
(Unaudited) (Unaudited)
Net income $ 1,238,000 $ 579,000
Income tax expense 51,000 38,000
Other expense, net 73,000 11,000
Stock based compensation expense 80,000 247,000
Depreciation and amortization 203,000 269,000
Litigation expense and non-routine legal and
advisory services for corporate and governance
matters - 220,000
------------- -------------
Adjusted Earnings $ 1,645,000 $ 1,364,000
============= =============
Six months Six months
ended ended
June 30, 2014 June 30, 2013
------------- -------------
(Unaudited) (Unaudited)
Net income $ 1,729,000 $ 816,000
Income tax expense 81,000 76,000
Other expense, net 166,000 16,000
Stock based compensation expense 160,000 494,000
Depreciation and amortization 463,000 544,000
Litigation expense and non-routine legal and
advisory services for corporate and governance
matters 109,000 620,000
============= =============
Adjusted Earnings $ 2,708,000 $ 2,566,000
============= =============
Contact:
Steve Handy
CFO
818-761-1002
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