Tix Corporation Reports Third Quarter and First Nine Months 2013 Results

Tix Corporation Reports Third Quarter and First Nine Months 2013 Results
  
 

STUDIO CITY, CA--(Marketwired - Nov 12, 2013) - Tix Corporation (the "Company") (OTCQX: TIXC), a leading provider of discount ticketing services, today reported results for the third quarter and first nine months ended September 30, 2013.

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 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.

Three Months Ended September 30, 2013 and 2012

Third quarter 2013 revenues decreased 9% to $5.8 million compared with $6.4 million for the same period a year ago. The decline in revenues of $603,000 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. This decline in revenues was offset by the opening of two new discount ticket locations; one in July 2013 and another in August 2013. Revenues were also negatively impacted by the continued general decrease in consumer spending in Las Vegas.

Third quarter 2013 direct operating expenses decreased 4% to $2.4 million compared with $2.5 million for the same period a year ago. Included in these expenses are payroll costs, rents, and utilities. The decrease in expense of $98,000 was due to $36,000 in reduced rents and utilities expense and $14,000 in decreased payroll costs realized in connection with the changes in discount ticket locations during the period as discussed above, and $48,000 in reduced rents at one of our discount ticket locations that took effect on August 1, 2012.

Third quarter 2013 selling, general and administrative expenses were $2.3 million compared with $2.8 million for the same period a year ago. Included in these expenses are $377,000 of aggregate expenses during the third quarter of 2013 and $636,000 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 $159,000, or 7%, to $2.0 million compared to $2.1 million for the same period of the prior year. The decrease in expenses of $159,000 was realized in connection with the changes in discount ticket locations during the period as discussed above and our continual efforts to manage our overall expenses.

Third quarter 2013 net income was $649,000, or $0.03 per diluted common share, as compared to a net income of $768,000, or $0.03 per diluted common share reported for the same period a year ago. Adjusted Earnings (as defined and explained below) for the third quarter 2013, which includes adjustments for items such as discontinued operations and expenses related to litigation and related legal matters described below, was $1.6 million, or $0.07 per diluted common share, as compared to Adjusted Earnings of $2.0 million, or $0.08 per diluted common share, reported for the same period a year ago.

Nine Months Ended September 30, 2013 and 2012

For the first nine months of 2013, revenues decreased 12% to $16.2 million compared with $18.4 million for the same period a year ago. The decline in revenues of $2.2 million 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. This decline in revenues was offset by the opening of two new discount ticket locations; one in July 2013 and another in August 2013. Revenues were also negatively impacted by the continued general decrease in consumer spending in Las Vegas.

For the first nine months of 2013, direct operating expenses decreased 13% to $6.9 million compared with $7.9 million for the same period a year ago. The decrease in expense of $1.0 million was due to $337,000 in reduced rents and utilities expense and $329,000 in reduced payroll costs realized in connection with the changes in discount ticket locations during the period as discussed above, and $338,000 in reduced rents at one of our discount ticket locations that took effect on August 1, 2012.

For the first nine months of 2013, selling, general and administrative expenses were $6.9 million compared with $8.4 million for the same period a year ago. Included in these expenses are $1.0 million of aggregate expenses during the first nine months of 2013 and $2.0 million 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 $474,000, or 7%, to $5.9 million compared to $6.3 million for the same period of the prior year. The decrease in expenses of $474,000 was realized in connection with the changes in discount ticket locations during the period as discussed above and our continual efforts to manage our overall expenses.

For the first nine months of 2013, net income was $1.5 million, or $0.06 per diluted common share, as compared to a net income of $568,000, or $0.02 per diluted common share, reported for the same period a year ago. Adjusted Earnings (as defined and explained below) for the first nine months of 2013, which includes adjustments for items such as discontinued operations and expenses related to litigation and related legal matters described below, was $4.2 million, or $0.18 per diluted common share, as compared to Adjusted Earnings of $5.0 million, or $0.20 per diluted common share, reported for the same period a year ago.

Conclusion

Mitch Francis, Chief Executive Officer of the Company, stated, "In July and August of 2013, we opened two new discount ticket locations which helped offset the negative impact resulting from the closure of one of our discount ticket locations in April 2012 and more recently, one of our major discount ticket locations in February 2013, caused by large scale construction and renovation projects in Las Vegas. With these two new discount ticket locations, September revenues have increased over the same period a year ago. We are hopeful that this trend will continue for the remainder of 2013."

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 [phone] 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 eleven 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. Forward-looking statements include, but are not limited to, statements about the expected opening dates of, and operations and sales at, each of the two new discount ticket locations discussed herein, 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 for the twelve months ended December 31, 2012 and the three and nine months ended September 30, 2013 can be found on the Company website at www.tixcorp.com or at www.otcqx.com.

TIX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
					September 30, 2013				December 31, 2012
					(Unaudited)
Assets
Current assets:
	Cash				$	9,220,000			$	6,017,000
	Short-term investments					1,798,000				2,993,000
	Accounts receivable					55,000				45,000
	Prepaid expenses and other current assets					136,000				419,000
		Total current assets				11,209,000				9,474,000
Property and equipment, net						1,175,000				1,047,000
Other assets:
	Intangible assets:
		Goodwill				3,120,000				3,120,000
		Intangibles, net				625,000				1,006,000
		Total intangible assets				3,745,000				4,126,000
	Deposits and other assets					152,000				187,000
		Total other assets				3,897,000				4,313,000
			Total assets		$	16,281,000			$	14,834,000
Liabilities and Stockholders' Equity
Current liabilities:
	Accounts payable and accrued expenses				$	2,857,000			$	3,372,000
	Deferred revenue					86,000				151,000
	Other current liabilities					145,000				156,000
	Note payable - short term					182,000				-
	Obligation for share purchase - short term					84,000				209,000
		Total current liabilities				3,354,000				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						4,229,000				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 September 30, 2013 and December 31, 2012, respectively					2,691,000				2,691,000
	Additional paid-in capital					93,156,000				92,366,000
	Obligation for share purchases					(2,074,000	)			(2,032,000	)
	Cost of shares held in treasury					(14,654,000	)			(14,654,000	)
	Accumulated deficit					(67,067,000	)			(68,532,000	)
	Accumulated other comprehensive loss					-				(16,000	)
		Total stockholders' equity				12,052,000				9,823,000
			Total liabilities and stockholders' equity		$	16,281,000			$	14,834,000

TIX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)
				Three Months Ended September 30,
				2013				2012
				(Unaudited)				(Unaudited)
Revenues				$	5,759,000			$	6,362,000
Operating expenses:
	Direct costs of revenues				2,414,000				2,512,000
	Selling, general and administrative expenses				2,344,000				2,762,000
	Depreciation and amortization				294,000				288,000
		Total costs and expenses			5,052,000				5,562,000
Operating income					707,000				800,000
Other expense:
	Other expense				-				(2,000	)
	Interest income				2,000				10,000
	Interest expense				(15,000	)			(26,000	)
		Other expense, net			(13,000	)			(18,000	)
Income from continuing operations before income tax expense					694,000				782,000
Income tax expense					45,000				69,000
Income from continuing operations					649,000				713,000
Discontinued operations:
	Income from operations of discontinued operations				-				55,000
	Loss on sale of discontinued operations				-				-
Gain on discontinued operations					-				55,000
Net income					649,000				768,000
Other comprehensive loss:
	Unrealized gain (loss) on available-for-sale securities				9,000				(4,000	)
Comprehensive income				$	658,000			$	764,000
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 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 per common share
	Net income per common share - basic			$	0.03			$	0.03
	Net income per common share - basic and diluted			$	0.03			$	0.03
Weighted average common shares outstanding - basic					23,669,831				23,669,831
Weighted average common shares outstanding - diluted					23,747,694				24,421,731

TIX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)
				Nine Months Ended September 30,
				2013				2012
				(Unaudited)				(Unaudited)
Revenues				$	16,202,000			$	18,423,000
Operating expenses:
	Direct costs of revenues				6,881,000				7,885,000
	Selling, general and administrative expenses				6,868,000				8,390,000
	Depreciation and amortization				838,000				872,000
		Total costs and expenses			14,587,000				17,147,000
Operating income					1,615,000				1,276,000
Other expense:
	Other income				-				1,000
	Interest income				13,000				23,000
	Interest expense				(42,000	)			(78,000	)
		Other expense, net			(29,000	)			(54,000	)
Income from continuing operations before income tax expense					1,586,000				1,222,000
Income tax expense					121,000				110,000
Income from continuing operations					1,465,000				1,112,000
Discontinued operations:
	Loss from operations of discontinued operations				-				(300,000	)
	Loss on sale of discontinued operations				-				(244,000	)
Loss on discontinued operations					-				(544,000	)
Net income					1,465,000				568,000
Other comprehensive loss:
	Unrealized gain (loss) on available-for-sale securities				16,000				(13,000	)
Comprehensive income				$	1,481,000			$	555,000
Net income per common share - continuing operations
	Net income per common share - continuing operations - basic			$	0.06			$	0.05
	Net income per common share - continuing operations - diluted			$	0.06			$	0.05
Net loss per common share - discontinued operations
	Net loss per common share - discontinued operations - basic			$	-			$	(0.02	)
	Net loss per common share - discontinued operations - diluted			$	-			$	(0.02	)
Net income per common share
	Net income per common share - basic			$	0.06			$	0.02
	Net income per common share - basic and diluted			$	0.06			$	0.02
Weighted average common shares outstanding - basic					23,669,831				23,670,732
Weighted average common shares outstanding - diluted					23,734,395				24,537,725

TIX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
						Nine Months Ended September 30,
						2013				2012
						(Unaudited)				(Unaudited)
Cash flows from operating activities:
	Net income					$	1,465,000			$	568,000
		Adjustments to reconcile net income to net cash provided by operating activities:
		Loss on discontinued operations					-				544,000
		Depreciation					458,000				485,000
		Non-cash interest					19,000				82,000
		Realized loss on available-for-sale securities arising during the period					24,000				3,000
		Amortization of intangible assets					381,000				387,000
		Fair value of options and warrants issued to employees and directors					750,000				765,000
		(Increase) decrease in:
			Accounts receivable				(10,000	)			3,000
			Prepaid expenses and other assets				318,000				626,000
		Increase (decrease) in:
			Accounts payable and accrued expenses				(515,000	)			(1,024,000	)
			Deferred revenue				(65,000	)			43,000
			Other current liabilities				(11,000	)			21,000
				Net cash provided by operating activities from continuing operations			2,814,000				2,503,000
				Net cash provided by operating activities from discontinued operations			-				20,000
				Net cash provided by operating activities			2,814,000				2,523,000
Cash flows from investing activities:
	Purchases of property and equipment						(586,000	)			(291,000	)
	Purchase of short-term investments						(1,199,000	)			(3,596,000	)
	Maturity of short-term investments						2,386,000				590,000
				Net cash provided by (used in) investing activities			601,000				(3,297,000	)
				Net cash used in investing activities from discontinued operations			-				-
				Net cash provided by (used in) investing activities			601,000				(3,297,000	)
Cash flows from financing activities:
	Cost of treasury shares, net of fees						-				(23,000	)
	Payment of repurchase obligation						-				(2,364,000	)
	Repayment of acquisition note						-				(500,000	)
	Obligation for share purchases						(212,000	)			(335,000	)
				Net cash used in financing activities			(212,000	)			(3,222,000	)
	Net increase (decrease)						3,203,000				(3,996,000	)
	Balance at beginning of period						6,017,000				8,077,000
	Balance at end of period					$	9,220,000			$	4,081,000

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 ended			Three months ended
		September 30, 2013			September 30, 2012
		(Unaudited)			(Unaudited)
Net income		$	649,000		$	768,000
Gain from discontinued operations			-			(55,000	)
Income tax expense			45,000			69,000
Interest expense, net			13,000			16,000
Litigation expense and non-routine legal and advisory services for corporate and governance matters			377,000			636,000
Stock based compensation expense			256,000			253,000
Depreciation and amortization			294,000			288,000
Adjusted Earnings		$	1,634,000		$	1,975,000

		Nine months ended			Nine months ended
		September 30, 2013			September 30, 2012
		(Unaudited)			(Unaudited)
Net income		$	1,465,000		$	568,000
Loss from discontinued operations			-			544,000
Income tax expense			121,000			110,000
Interest expense, net			29,000			55,000
Litigation expense and non-routine legal and advisory services for corporate and governance matters			996,000			2,044,000
Stock based compensation expense			750,000			765,000
Depreciation and amortization			838,000			872,000
Adjusted Earnings		$	4,199,000		$	4,958,000

Contact: Steve Handy CFO 818-761-1002