Tix Corporation Reports Fourth Quarter and Full Year 2013 Results

Tix Corporation Reports Fourth Quarter and Full Year 2013 Results
  
 

STUDIO CITY, CA--(Marketwired - Mar 12, 2014) - Tix Corporation (the "Company") (OTCQX: TIXC), a leading provider of discount ticketing services, today reported results for the fourth quarter and full year ended December 31, 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.

Fourth Quarter 2013 and 2012

Fourth quarter 2013 revenues increased 1% to $6.0 million compared with $5.9 million for the same period a year ago. The increase in revenues was caused by the opening of two new discount ticket locations; one in July 2013 and another in August 2013.

Fourth quarter 2013 direct operating expenses, which includes payroll costs, rents, and utilities, were $2.5 million compared with $2.5 million for the same period a year ago.

Fourth quarter 2013 selling, general and administrative expenses were $2.9 million compared with $2.4 million for the same period a year ago. Included in these expenses are $740,000 of expenses during the fourth quarter of 2013 and $270,000 of 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 increased $69,000, or 3%, to $2.2 million compared to $2.1 million for the same period a year ago.

Fourth quarter 2013 net income was $109,000, or $0.00 per diluted common share, as compared to a net income of $807,000, or $0.03 per diluted common share reported for the same period a year ago. Adjusted Earnings (as defined and explained below) for the fourth quarter 2013 and for the same period a year ago, which include adjustments for items such as expenses for certain non-recurring matters requiring legal and advisory services relating to corporate and governance matters and litigation expense described below, were $1.5 million, or $0.06 per diluted common share.

Full Year 2013 and 2012

For the full year of 2013, revenues decreased 9% to $22.2 million compared with $24.3 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 partially offset by the opening of two new discount ticket locations; one in July 2013 and another in August 2013.

For the full year of 2013, direct operating expenses decreased 10% to $9.4 million compared with $10.4 million for the same period a year ago. The decrease in expenses of $1.0 million was due to $298,000 in reduced rents and utilities expense and $382,000 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 full year of 2013, selling, general and administrative expenses were $9.8 million compared with $10.8 million for the same period a year ago. Included in these expenses are $1.7 million of expenses during the full year of 2013 and $2.3 million of 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 $405,000, or 5%, to $8.1 million compared to $8.5 million for the same period of the prior year. The decrease in expenses of $405,000 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 full year of 2013, net income was $1.6 million, or $0.07 per diluted common share, as compared to a net income of $1.4 million, or $0.06 per diluted common share, reported for the same period a year ago. Adjusted Earnings (as defined and explained below) for the full year of 2013, which include adjustments for items such as discontinued operations and expenses for certain non-recurring matters requiring legal and advisory services relating to corporate and governance matters and litigation expenses described below, were $5.7 million, or $0.24 per diluted common share, as compared to Adjusted Earnings of $6.5 million, or $0.27 per diluted common share, reported for the same period a year ago.

Conclusion 

Mitch Francis, Chief Executive Officer of the Company, stated, "We are excited to get past the majority of the recent short-term disruptions in our marketplace caused by large scale construction and renovation projects in Las Vegas. With no outstanding litigation and our return to positive revenue growth in the fourth quarter of 2013, I believe we should be well positioned heading into 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 [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) other expense, net, (c) income taxes, (d) depreciation and amortization charges, (e) stock based compensation expense, (f) loss on disposition of property and equipment, (g) unusual litigation, and (h) 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 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, 2013 can be found on the Company website at www.tixcorp.com or at www.otcqx.com.

TIX CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
					December 31, 2013				December 31, 2012
Assets
Current assets:
	Cash				$	3,176,000			$	6,017,000
	Short-term investments					-				2,993,000
	Accounts receivable					63,000				45,000
	Prepaid expenses and other current assets					268,000				419,000
		Total current assets				3,507,000				9,474,000
Property and equipment, net						884,000				1,047,000
Other assets:
	Intangible assets:
		Goodwill				3,120,000				3,120,000
		Intangibles, net				498,000				1,006,000
		Total intangible assets				3,618,000				4,126,000
	Deposits and other assets					71,000				187,000
		Total other assets				3,689,000				4,313,000
			Total assets		$	8,080,000			$	14,834,000
Liabilities and Stockholders' Equity
Current liabilities:
	Accounts payable - shows and events				$	693,000			$	2,435,000
	Accounts payable and accrued expenses					939,000				937,000
	Deferred revenue					29,000				151,000
	Notes payable - short term and net of discount					3,726,000				-
	Obligation for share purchases - short term					84,000				209,000
		Total current liabilities				5,471,000				3,732,000
Deferred rent obligations						133,000				156,000
Note payable - net of current portion and discount						728,000				879,000
Obligation for share purchases - net of current portion						160,000				244,000
Total liabilities						6,492,000				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; 18,218,572 shares net of 15,406,803 treasury shares, and 23,669,831 shares net of 9,955,544 treasury shares issued and outstanding at December 31, 2013 and December 31, 2012, respectively					2,691,000				2,691,000
	Additional paid-in capital					93,356,000				92,366,000
	Obligation for share purchases					(2,088,000	)			(2,032,000	)
	Cost of shares held in treasury					(25,413,000	)			(14,654,000	)
	Accumulated deficit					(66,958,000	)			(68,532,000	)
	Accumulated other comprehensive loss					-				(16,000	)
		Total stockholders' equity				1,588,000				9,823,000
			Total liabilities and stockholders' equity		$	8,080,000			$	14,834,000

TIX CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
				Three Months Ended December 31,
				2013				2012
Revenues				$	5,952,000			$	5,902,000
Operating expenses:
	Direct costs of revenues				2,484,000				2,498,000
	Selling, general and administrative expenses				2,922,000				2,383,000
	Loss on disposition of property and equipment				171,000				-
	Depreciation and amortization				303,000				275,000
		Total costs and expenses			5,880,000				5,156,000
Operating income					72,000				746,000
Other expense:
	Other expense				(69,000	)			(1,000	)
	Interest income				3,000				6,000
	Interest expense				(13,000	)			(25,000	)
		Other expense, net			(79,000	)			(20,000	)
Income (loss) from operations before income tax expense					(7,000	)			726,000
Income tax benefit					(116,000	)			(81,000	)
Net income				$	109,000			$	807,000
	Unrealized loss on available-for-sale securities				-				(3,000	)
Comprehensive income				$	109,000			$	804,000
Net income per common share
	Net income per common share - basic			$	0.00			$	0.03
	Net income per common share - basic and diluted			$	0.00			$	0.03
Weighted average common shares outstanding - basic					23,250,503				23,669,831
Weighted average common shares outstanding - diluted					23,398,632				23,802,712

TIX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
				Years Ended December 31,
				2013				2012
Revenues				$	22,154,000			$	24,325,000
Operating expenses:
	Direct costs of revenues				9,365,000				10,383,000
	Selling, general and administrative expenses				9,790,000				10,773,000
	Loss on disposition of property and equipment				171,000				-
	Depreciation and amortization				1,141,000				1,147,000
		Total costs and expenses			20,467,000				22,303,000
Operating income					1,687,000				2,022,000
Other expense:
	Other expense				(69,000	)			-
	Interest income				16,000				29,000
	Interest expense				(55,000	)			(103,000	)
		Other expense, net			(108,000	)			(74,000	)
Income from continuing operations before income tax expense					1,579,000				1,948,000
Income tax expense					5,000				29,000
Income from continuing operations					1,574,000				1,919,000
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				$	1,574,000			$	1,375,000
	Unrealized gain (loss) on available-for-sale securities				16,000				(16,000	)
Comprehensive income				$	1,590,000			$	1,359,000
Net income per common share - continuing operations
	Net income per common share - continuing operations - basic			$	0.07			$	0.08
	Net income per common share - continuing operations - diluted			$	0.07			$	0.08
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			$	0.07			$	0.06
	Net income per common share - basic and diluted			$	0.07			$	0.06
Weighted average common shares outstanding - basic					23,565,286				23,670,505
Weighted average common shares outstanding - diluted					23,641,083				24,374,724

TIX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
						Years Ended December 31,
						2013				2012
Cash flows from operating activities:
	Net income					$	1,574,000			$	1,375,000
		Adjustments to reconcile net income to cash provided by operating activities:
		Loss on discontinued operations					-				544,000
		Depreciation					633,000				633,000
		Non-cash interest					32,000				82,000
		Realized loss on sale of short-term investments					24,000				6,000
		Amortization of intangible assets					508,000				514,000
		Loss on disposition of property and equipment					171,000				-
		Fair value of options and warrants issued to employees and directors					937,000				997,000
		(Increase) decrease in:
			Accounts receivable				(18,000	)			10,000
			Prepaid expenses and other assets				267,000				344,000
		Increase (decrease) in:
			Accounts payable - shows and events				(1,742,000	)			343,000
			Accounts payable and accrued expenses				2,000				(257,000	)
			Deferred revenue				(122,000	)			40,000
			Deferred rent obligations				(23,000	)			23,000
				Net cash provided by operating activities from continuing operations			2,243,000				4,654,000
				Net cash provided by operating activities from discontinued operations			-				15,000
				Net cash provided by operating activities			2,243,000				4,669,000
Cash flows from investing activities:
	Purchases of property and equipment						(641,000	)			(281,000	)
	Purchases of short-term investments						(1,199,000	)			(4,195,000	)
	Maturity of short-term investments						4,184,000				1,186,000
				Net cash provided by (used in) investing activities			2,344,000				(3,290,000	)
Cash flows from financing activities:
	Cost of treasury shares, net of fees						(7,216,000	)			(23,000	)
	Payment of repurchase obligation						-				(2,360,000	)
	Repayment of acquisition note						-				(625,000	)
	Obligation for share purchases						(212,000	)			(431,000	)
				Net cash used in financing activities			(7,428,000	)			(3,439,000	)
	Net decrease						(2,841,000	)			(2,060,000	)
	Balance at beginning of period						6,017,000				8,077,000
	Balance at end of period					$	3,176,000			$	6,017,000

TIX CORPORATION AND SUBSIDIARIES
TIX 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
		December 31, 2013				December 31, 2012
Net income		$	109,000			$	807,000
Income tax benefit			(116,000	)			(81,000	)
Other expense, net			79,000				20,000
Depreciation and amortization			303,000				275,000
Stock based compensation expense			187,000				232,000
Loss on disposition of property and equipment			171,000				-
Litigation expense and non-routine legal and advisory services for corporate and governance matters			740,000				270,000
Adjusted Earnings		$	1,473,000			$	1,523,000
		Twelve months ended				Twelve months ended
		December 31, 2013				December 31, 2012
Net income		$	1,574,000			$	1,375,000
Loss from discontinued operations			-				544,000
Income tax expense			5,000				29,000
Other expense, net			108,000				74,000
Depreciation and amortization			1,141,000				1,147,000
Stock based compensation expense			937,000				997,000
Loss on disposition of property and equipment			171,000				-
Litigation expense and non-routine legal and advisory services for corporate and governance matters			1,736,000				2,314,000
Adjusted Earnings		$	5,672,000			$	6,480,000

Contact: Steve Handy CFO 818-761-1002