Tix Corporation Reports Second Quarter and First S
Post# of 301275
STUDIO CITY, Calif., July 18, 2017 (GLOBE NEWSWIRE) -- Tix Corporation (the “Company” or “Tix”) (OTCQX:TIXC), a leading provider of discount ticketing services, today reported results for the second quarter and first six months ended June 30, 2017.
The Company’s second quarter financial performance improved over the preceding quarter even though the Company continued to feel the significant impact of increased aggressive competition from online and mobile ticket sellers, show producers, and hotel properties.
The Company was recently notified by MGM Resorts International (“MGM”) of their plan to open their own discount ticket booths soon within their hotel properties in Las Vegas. Further, they will terminate sales of their Cirque du Soleil (“Cirque”) shows at the Company’s Tix4Tonight booths. The new MGM booths will also sell discount tickets for all shows located within their Las Vegas hotel properties, although those shows will most likely not discontinue sales at the Tix4Tonight booths. Cirque and MGM are partners on four of the five Cirque shows the Company currently sells, which represent approximately 15% of the Company’s total ticket sales. The MGM/Cirque partnership does not include Cirque’s Mystère, the Company’s best-selling Cirque show, which the Company anticipates will continue to be offered at its booths. The Company is in discussions with MGM and Cirque to sell their tickets through the Company’s new online and mobile platforms (discussed below). Competition from MGM’s new discount ticket booths, coupled with the removal of the four Cirque shows from our inventory may materially negatively impact the Company’s future performance.
The Company is close to commencing new growth initiatives including selling tickets in advance and same-day via online and mobile devices at a slightly higher sales price than at its booths. The Company is rolling out an improved discount dining program and its first ever discount shopping offer. The Company has also created a new project to market its discount inventories to Expedia brand customers prior to their arrival in Las Vegas under its Expedia Local Expert partnership that is anticipated to commence this year.
The Company is hopeful that these new growth initiatives will mitigate the effects from competition and the MGM impacts discussed above and return it to revenue growth.
Second Quarter 2017 Results
Second quarter 2017 revenues decreased to $4,761,000 as compared with $5,312,000 for the same period a year ago. Revenues were negatively impacted by last year’s significant number of permanent show closures and increased competition, particularly from online and mobile ticket sellers as compared to the same period a year ago.
Second quarter 2017 direct operating expenses, which includes payroll costs, rents, utilities and third party commission and fees, decreased to $2,356,000 as compared with $2,552,000 for the same period a year ago. The decrease in direct operating expenses was primarily the result of one less location in operation during this period as compared with the same period a year ago.
Second quarter 2017 selling, general and administrative expenses increased to $1,859,000 as compared with $1,834,000 for the same period a year ago.
Second quarter 2017 net income decreased to $333,000, or $0.02 per diluted common share, as compared with a net income of $530,000, or $0.03 per diluted common share reported for the same period a year ago.
First Six Months 2017 Results
First six months 2017 revenues decreased to $9,085,000 as compared with $10,729,000 for the same period a year ago. Revenues were negatively impacted by last year’s significant number of permanent show closures and increased competition, particularly from online and mobile ticket sellers as compared to the same period a year ago.
First six months 2017 direct operating expenses decreased to $4,795,000 as compared with $5,147,000 for the same period a year ago. The decrease in direct operating expenses was primarily the result of one less location in operation during this period as compared with the same period a year ago.
First six months 2017 selling, general and administrative expenses were $3,763,000 as compared with $3,778,000 for the same period a year ago.
First six months 2017 net income decreased to $275,000, or $0.02 per diluted common share, as compared with a net income of $1,018,000, or $0.06 per diluted common share reported for the same period a year ago.
About Tix Corporation
Tix Corporation (OTCQX:TIXC) provides discount ticketing services. It currently operates ten 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. Tix4Tonight also serves as the Official Las Vegas Guest Services Partner for Expedia and its other brands. The co-branded Expedia Local Expert service provides both pre-arrival concierge-type services and in-market concierge-type desk services and related customer service support at physical locations in Las Vegas, featuring Tix4Tonight's inventory of discount show and attraction tickets, along with discount dining reservations.
Stockholder Rights Agreement
On January 2, 2014, the Company announced that its Board of Directors adopted an amendment of the Company's Stockholder Rights Agreement (the “Rights Agreement”) to protect the interests of all Company stockholders by lowering the beneficial ownership threshold to a level that could help preserve the value of the Federal Net Operating Loss Carry Forwards (“NOLs”). The Company’s ability to use the NOLs would be substantially limited if there were an “ownership change” as defined under Section 382 of the U.S. Internal Revenue Code and related U.S. Treasury regulations (“Section 382”). In general, an “ownership change” would occur under Section 382 if the Company’s “5-percent shareholders,” as defined under Section 382, collectively increase their ownership in the Company by more than 50 percentage points over a rolling three-year period.
Under the terms of the amended and restated Rights Agreement, subject to certain exceptions, in the event a person or group, without Board approval, acquires beneficial ownership of 4.95% or more of the outstanding Common Stock or announces a tender or exchange offer which would result in such person or group's beneficial ownership of 4.95% or more of the outstanding Common Stock (a “Triggering Stockholder”), then all stockholders of the Company (other than the Triggering Stockholder) will be entitled to acquire shares of Common Stock at a 50% discount (a “Dilution Event”).
A person or group that owns 4.95% or more of the outstanding Common Stock at the time of the adoption of the amended and restated Rights Agreement (an “Existing Major Stockholder”) will not trigger a Dilution Event. However, a Dilution Event will be triggered if an Existing Major Stockholder, without Board approval, acquires any additional shares of Common Stock.
The 4.95% beneficial ownership threshold under the amended and restated Rights Agreement will remain applicable until March 31, 2021, or earlier, if the Board determines that the reduced threshold is no longer necessary for the preservation of the NOLs.
The foregoing description of the amended and restated Rights Agreement is qualified in its entirety by reference to the full text of the amended and restated Rights Agreement, a copy of which is available on the Company's website.
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 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 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, 2016 can be found on the Company website at www.tixcorp.com or at www.otcmarkets.com .
| TIX CORPORATION AND SUBSIDIARY | |||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
| June 30, 2017 | December 31, 2016 | ||||||
| (Unaudited) | |||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash | $ | 5,028,000 | $ | 7,336,000 | |||
| Accounts receivable | 38,000 | 36,000 | |||||
| Prepaid expenses and other current assets | 358,000 | 131,000 | |||||
| Total current assets | 5,424,000 | 7,503,000 | |||||
| Property and equipment, net | 176,000 | 264,000 | |||||
| Other assets: | |||||||
| Goodwill | 3,120,000 | 3,120,000 | |||||
| Deferred tax asset | 10,209,000 | 10,508,000 | |||||
| Deposits and other assets | 61,000 | 61,000 | |||||
| Total other assets | 13,390,000 | 13,689,000 | |||||
| Total assets | $ | 18,990,000 | $ | 21,456,000 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Current liabilities: | |||||||
| Accounts payable – shows and events | $ | 858,000 | $ | 1,097,000 | |||
| Accounts payable and accrued expenses | 448,000 | 1,090,000 | |||||
| Deferred revenue | 55,000 | 44,000 | |||||
| Note payable – short term and net of discount | 188,000 | 200,000 | |||||
| Total current liabilities | 1,549,000 | 2,431,000 | |||||
| Deferred rent obligations | 19,000 | 28,000 | |||||
| Note payable – net of current portion and discount | - | 176,000 | |||||
| Total liabilities | 1,568,000 | 2,635,000 | |||||
| Stockholders’ equity: | |||||||
| Preferred stock, $.01 par value; 500,000 shares authorized; none issued | - | ||||||
| Common stock, $.08 par value; 100,000,000 shares authorized; 17,342,175 shares net of 16,644,814 treasury shares, and 17,349,583 shares net of 16,637,406 treasury shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively | 2,720,000 | 2,720,000 | |||||
| Additional paid-in capital | 94,897,000 | 94,655,000 | |||||
| Cost of stock held in treasury | (28,164,000 | ) | (28,154,000 | ) | |||
| Accumulated deficit | (52,031,000 | ) | (50,400,000 | ) | |||
| Total stockholders’ equity | 17,422,000 | 18,821,000 | |||||
| Total liabilities and stockholders’ equity | $ | 18,990,000 | $ | 21,456,000 | |||
| TIX CORPORATION AND SUBSIDIARY | ||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | ||||||||||
| Three Months Ended June 30, | ||||||||||
| 2017 | 2016 | |||||||||
| (Unaudited) | (Unaudited) | |||||||||
| Revenues | $ | 4,761,000 | $ | 5,312,000 | ||||||
| Operating expenses: | ||||||||||
| Direct costs of revenues | 2,356,000 | 2,552,000 | ||||||||
| Selling, general and administrative expenses | 1,859,000 | 1,834,000 | ||||||||
| Depreciation and amortization | 38,000 | 117,000 | ||||||||
| Total operating expenses | 4,253,000 | 4,503,000 | ||||||||
| Operating income | 508,000 | 809,000 | ||||||||
| Other expense: | ||||||||||
| Interest expense | 4,000 | 6,000 | ||||||||
| Other expense , net | 4,000 | 6,000 | ||||||||
| Income before provision for income taxes | 504,000 | 803,000 | ||||||||
| Provision for income taxes | 171,000 | 273,000 | ||||||||
| Net income | $ | 333,000 | $ | 530,000 | ||||||
| Net income per common share | ||||||||||
| Net income per common share – basic | $ | 0.02 | $ | 0.03 | ||||||
| Net income per common share – diluted | $ | 0.02 | $ | 0.03 | ||||||
| Weighted average common shares outstanding – basic | 17,342,175 | 17,292,304 | ||||||||
| Weighted average common shares outstanding – diluted | 17,342,175 | 18,094,901 | ||||||||
| TIX CORPORATION AND SUBSIDIARY | ||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | ||||||||||
| Six Months Ended June 30, | ||||||||||
| 2017 | 2016 | |||||||||
| (Unaudited) | (Unaudited) | |||||||||
| Revenues | $ | 9,085,000 | $ | 10,729,000 | ||||||
| Operating expenses: | ||||||||||
| Direct costs of revenues | 4,795,000 | 5,147,000 | ||||||||
| Selling, general and administrative expenses | 3,763,000 | 3,778,000 | ||||||||
| Depreciation and amortization | 100,000 | 250,000 | ||||||||
| Total operating expenses | 8,658,000 | 9,175,000 | ||||||||
| Operating income | 427,000 | 1,554,000 | ||||||||
| Other expense: | ||||||||||
| Interest expense | 10,000 | 11,000 | ||||||||
| Other expense, net | 10,000 | 11,000 | ||||||||
| Income before provision for income taxes | 417,000 | 1,543,000 | ||||||||
| Provision for income taxes | 142,000 | 525,000 | ||||||||
| Net income | $ | 275,000 | $ | 1,018,000 | ||||||
| Net income per common share | ||||||||||
| Net income per common share – basic | $ | 0.02 | $ | 0.06 | ||||||
| Net income per common share – diluted | $ | 0.02 | $ | 0.06 | ||||||
| Weighted average common shares outstanding – basic | 17,348,184 | 17,316,362 | ||||||||
| Weighted average common shares outstanding – diluted | 17,376,904 | 18,079,631 | ||||||||
| TIX CORPORATION AND SUBSIDIARY | |||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | |||||||||
| Six Months Ended June 30, | |||||||||
| 2017 | 2016 | ||||||||
| (Unaudited) | (Unaudited) | ||||||||
| Cash flows from operating activities: | |||||||||
| Net income | $ | 275,000 | $ | 1,018,000 | |||||
| Adjustments to reconcile net income to net cash (used in) provided by operating activities: | |||||||||
| Imputed interest | 12,000 | 12,000 | |||||||
| Depreciation | 100,000 | 234,000 | |||||||
| Amortization of intangible assets | - | 17,000 | |||||||
| Stock based compensation | 242,000 | 195,000 | |||||||
| Deferred tax asset | 299,000 | 454,000 | |||||||
| (Increase) decrease in: | |||||||||
| Accounts receivable | (2,000 | ) | 7,000 | ||||||
| Prepaid expenses and other assets | (227,000 | ) | (114,000 | ) | |||||
| Increase (decrease) in: | |||||||||
| Accounts payable – shows and events | (239,000 | ) | (299,000 | ) | |||||
| Accounts payable and accrued expenses | (642,000 | ) | (693,000 | ) | |||||
| Deferred revenue | 11,000 | 4,000 | |||||||
| Deferred rent obligations | (9,000 | ) | (17,000 | ) | |||||
| Net cash (used in) provided by operating activities | (180,000 | ) | 818,000 | ||||||
| Cash flows from investing activities: | |||||||||
| Purchases of property and equipment | (12,000 | ) | (29,000 | ) | |||||
| Net cash used in investing activities | (12,000 | ) | (29,000 | ) | |||||
| Cash flows from financing activities: | |||||||||
| Cash received on exercise of stock options | - | 42,000 | |||||||
| Dividends paid | (1,906,000 | ) | (1,817,000 | ) | |||||
| Payment on note payable | (200,000 | ) | (200,000 | ) | |||||
| Cost of treasury stock | (10,000 | ) | (39,000 | ) | |||||
| Net cash used in financing activities | (2,116,000 | ) | (2,014,000 | ) | |||||
| Net decrease in cash | (2,308,000 | ) | (1,225,000 | ) | |||||
| Cash, beginning of period | 7,336,000 | 7,921,000 | |||||||
| Cash, end of period | $ | 5,028,000 | $ | 6,696,000 | |||||
Investor Contacts: Steve Handy, CFO, (818)761-1002
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