CST: 25/08/2016 01:10:22   

Tix Corporation Reports Fourth Quarter and Full Year 2015 Results

175 Days ago

STUDIO CITY, CA--(Marketwired - Mar 2, 2016) - Tix Corporation (OTCQX: TIXC)

FULL YEAR 2015 HIGHLIGHTS

  • Net income before deferred tax valuation adjustment increased 27%
  • Adjusted EBITDA increased 11% to $6.5 million
  • Initiated a quarterly cash dividend program of $0.05 per share, $0.20 per share annually
  • Dividend yield averaging approximately 9%
  • Working capital improved 105% to $5.4 million after paying $2.6 million in cash dividends

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, 2015. 

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. Our discount ticket locations also offer discount dinner reservations at various restaurants surrounding the Las Vegas Strip and downtown.

Fourth Quarter 2015 Results

Fourth quarter 2015 revenues of $5,940,000 were comparable with $5,942,000 in the same period a year ago. 

Fourth quarter 2015 direct operating expenses, which includes payroll costs, rents, and utilities, of $2,465,000 were comparable with $2,439,000 for the same period a year ago. Direct operating expenses, as a percentage of revenues, were 41% for both the fourth quarter 2015 and for the same period a year ago. 

Fourth quarter 2015 selling, general and administrative expenses decreased $255,000, or 10%, to $2,178,000 compared with $2,433,000 for the same period a year ago. The decrease in expenses was realized from decreased employee related expenses as compared to the same period a year ago. 

Fourth quarter 2015 income tax benefit was $11,511,000, as compared to an income tax benefit of $20,000 reported for the same period a year ago. During the fourth quarter of 2015, the Company determined, based on various factors including historical results and anticipated future results, that the majority of the Company's valuation allowance on its deferred tax assets be reversed. Therefore, during the fourth quarter 2015, the Company recorded a one-time adjustment of $11,531,000 to income tax benefit on its consolidated statements of operations and deferred tax asset on its consolidated balance sheet. 

Fourth quarter 2015 net income was $12,662,000, or $0.70 per diluted common share, as compared to a net income of $888,000, or $0.05 per diluted common share reported for the same period a year ago. Excluding the income tax benefit adjustment discussed above, net income was $1,131,000, or $0.06 per diluted share, as compared to net income of $888,000, or $0.05 per diluted share, reported for the same period a year ago. Adjusted EBITDA (as defined and explained below) for the fourth quarter 2015, increased $152,000, or 12%, to $1,384,000, or $0.08 per diluted common share, as compared to Adjusted EBITDA of $1,232,000, or $0.07 per diluted common share, reported for the same period a year ago.

Full Year 2015 Results

For the full year of 2015, revenues increased 3% to $23,421,000 compared with $22,696,000 for the prior year. 

For the full year of 2015, direct operating expenses of $9,395,000 were comparable with $9,441,000 for the prior year. Direct operating expenses, as a percentage of revenues, were 40% and 42% for the full year 2015 and 2014, respectively.

For the full year of 2015, selling, general and administrative expenses decreased 1% to $7,899,000 compared with $7,943,000 for the prior year. 

For the full year of 2015, income tax benefit was $11,276,000, as compared to an income tax expense of $100,000 reported for the same period a year ago. During the full year of 2015, the Company determined, based on various factors including historical results and anticipated future results, that the majority of the Company's valuation allowance on its deferred tax assets be reversed. Therefore, during the full year of 2015, the Company recorded a one-time adjustment of $11,531,000 to income tax benefit on its consolidated statements of operations and deferred tax asset on its consolidated balance sheet. 

For the full year of 2015, net income was $16,792,000, or $0.95 per diluted common share, as compared to a net income of $4,148,000, or $0.23 per diluted common share reported for the prior year. Excluding the one-time income tax benefit adjustment discussed above, net income for the full year of 2015 was $5,261,000, or $0.30 per diluted share, as compared to net income of $4,148,000 or $0.23 per diluted share, reported for the same period a year ago, a 27% increase. Adjusted EBITDA (as defined and explained below) for the full year of 2015, increased $643,000, or 11% to $6,493,000, or $0.37 per diluted common share, as compared to Adjusted EBITDA of $5,850,000, or $0.32 per diluted common share, reported for the same period a year ago.

Management Commentary 

Mitch Francis, Chief Executive Officer of the Company, stated, "We continue to provide our customers with a unique, value-based service when they visit Las Vegas. The successful execution of our strategies led to solid financial results throughout 2015, generating revenue growth as well as the second best Adjusted EBITDA in our Company's history. Consistent operational performance and cash generation, coupled with confidence in our strategies allowed us to initiate a quarterly dividend program in the first half of 2015, which produced a meaningful dividend yield for our shareholders." 

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 EBITDA as net income plus (a) income taxes (b) other expenses, net, (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 EBITDA 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 EBITDA 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 EBITDA are widely used in similar entertainment companies to measure operating performance, although Adjusted EBITDA as calculated by the Company is not necessarily comparable to similarly titled measures by such other companies. Adjusted EBITDA (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.

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, 2015 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, 2015     December 31, 2014  
Assets  
Current assets:            
  Cash   $ 7,921,000     $ 4,866,000  
  Accounts receivable     47,000       54,000  
  Prepaid expenses and other current assets     122,000       148,000  
    Total current assets     8,090,000       5,068,000  
                 
Property and equipment, net     579,000       918,000  
                 
Other assets:                
  Intangible assets:                
    Goodwill     3,120,000       3,120,000  
    Intangibles, net     17,000       153,000  
    Total intangible assets     3,137,000       3,273,000  
  Deferred tax asset     11,531,000       -  
  Deposits and other assets     66,000       68,000  
    Total other assets     14,734,000       3,341,000  
      Total assets   $ 23,403,000     $ 9,327,000  
                 
Liabilities and Stockholders' Equity  
Current liabilities:                
  Accounts payable - shows and events   $ 1,140,000     $ 938,000  
  Accounts payable and accrued expenses     1,390,000       1,236,000  
  Deferred revenue     25,000       25,000  
  Notes payable - short term and net of discount     176,000       176,000  
  Obligation for share purchases - short term     -       81,000  
    Total current liabilities     2,731,000       2,456,000  
                 
Deferred rent obligations     58,000       133,000  
Note payable - net of current portion and discount     376,000       552,000  
Obligation for share purchases - net of current portion     -       78,000  
Total liabilities     3,165,000       3,219,000  
                 
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; 17,280,009 shares net of 16,619,953 treasury shares, and 17,864,744 shares net of 15,451,803 treasury shares issued and outstanding at December 31, 2015 and December 31, 2014, respectively     2,713,000       2,666,000  
  Additional paid-in capital     94,216,000       93,865,000  
  Obligation for share purchases     -       (2,148,000 )
  Cost of shares held in treasury     (28,115,000 )     (25,465,000 )
  Accumulated deficit     (48,576,000 )     (62,810,000 )
    Total stockholders' equity     20,238,000       6,108,000  
      Total liabilities and stockholders' equity   $ 23,403,000     $ 9,327,000  
                       
                       
   
TIX CORPORATION AND SUBSIDIARY  
CONSOLIDATED STATEMENTS OF OPERATIONS  
             
    Three Months Ended December 31,  
    2015     2014  
                 
Revenues   $ 5,940,000     $ 5,942,000  
Operating expenses:                
  Direct costs of revenues     2,465,000       2,439,000  
  Selling, general and administrative expenses     2,178,000       2,433,000  
  Depreciation and amortization     141,000       194,000  
    Total costs and expenses     4,784,000       5,066,000  
Operating income     1,156,000       876,000  
Other income (expense):                
  Interest income     1,000       -  
  Interest expense     (6,000 )     (8,000 )
    Other expense, net     (5,000 )     (8,000 )
Income from operations before income tax benefit     1,151,000       868,000  
Income tax benefit     (11,511,000 )     (20,000 )
Net income   $ 12,662,000     $ 888,000  
Net income per common share                
  Net income per common share - basic   $ 0.73     $ 0.05  
  Net income per common share - diluted   $ 0.70     $ 0.05  
                 
Weighted average common shares outstanding - basic     17,280,008       18,176,337  
Weighted average common shares outstanding - diluted     17,980,921       18,558,582  
                 
                 
   
TIX CORPORATION AND SUBSIDIARY  
CONSOLIDATED STATEMENTS OF OPERATIONS  
             
    Years Ended December 31,  
    2015     2014  
                 
Revenues   $ 23,421,000     $ 22,696,000  
Operating expenses:                
  Direct costs of revenues     9,395,000       9,441,000  
  Selling, general and administrative expenses     7,899,000       7,943,000  
  Depreciation and amortization     596,000       855,000  
    Total costs and expenses     17,890,000       18,239,000  
Operating income     5,531,000       4,457,000  
Other income (expense):                
  Other income     7,000       3,000  
  Interest income     2,000       1,000  
  Interest expense     (24,000 )     (213,000 )
    Other expense, net     (15,000 )     (209,000 )
Income before income tax (benefit) expense     5,516,000       4,248,000  
Income tax (benefit) expense     (11,276,000 )     100,000  
Net income   $ 16,792,000     $ 4,148,000  
                 
Net income per common share                
  Net income per common share - basic   $ 0.98     $ 0.23  
  Net income per common share - diluted   $ 0.95     $ 0.23  
                 
Weighted average common shares outstanding - basic     17,199,747       18,194,770  
Weighted average common shares outstanding - diluted     17,741,834       18,347,168  
                 
   
TIX CORPORATION AND SUBSIDIARY  
CONSOLIDATED STATEMENTS OF CASH FLOWS  
   
    Years Ended December 31,  
    2015     2014  
Cash flows from operating activities:                
  Net income   $ 16,792,000     $ 4,148,000  
      Adjustments to reconcile net income to cash provided by operating activities:                
    Depreciation     460,000       510,000  
    Non-cash interest     24,000       17,000  
    Amortization of intangible assets     136,000       345,000  
    Change in deferred tax assets valuation allowance     (11,531,000 )     -  
    Fair value of options and warrants issued to employees and directors     366,000       429,000  
    (Increase) decrease in:                
      Accounts receivable     7,000       9,000  
      Prepaid expenses and other assets     28,000       123,000  
    Increase (decrease) in:                
      Accounts payable - shows and events     202,000       245,000  
      Accounts payable and accrued expenses     154,000       297,000  
      Deferred revenue     -       (4,000 )
      Deferred rent obligation     (75,000 )     -  
        Net cash provided by operating activities     6,563,000       6,119,000  
Cash flows from investing activities:                
  Purchases of property and equipment     (121,000 )     (544,000 )
        Net cash used in investing activities     (121,000 )     (544,000 )
Cash flows from financing activities:                
  Proceeds from exercise of stock options     25,000       -  
  Dividends paid     (2,558,000 )        
  Cost of treasury stock, net of fees     (495,000 )     (52,000 )
  Payment of notes payable     (200,000 )     (3,743,000 )
  Obligation for shares purchases     (159,000 )     (90,000 )
  Proceeds received from issuance of senior secured note payable     -       4,000,000  
  Payment of senior secured note payable     -       (4,000,000 )
        Net cash used in financing activities     (3,387,000 )     (3,885,000 )
  Net increase     3,055,000       1,690,000  
  Balance at beginning of period     4,866,000       3,176,000  
  Balance at end of period   $ 7,921,000     $ 4,866,000  
                 
                 
 
TIX CORPORATION AND SUBSIDIARIES
 TIX RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA
(UNAUDITED)
 
The following table set forth a reconciliation of consolidated net income to consolidated Adjusted EBITDA:
             
    Three months ended     Three months ended  
    December 31, 2015     December 31, 2014  
                 
Net income   $ 12,662,000     $ 888,000  
Income tax benefit     (11,511,000 )     (20,000 )
Other expense, net     5,000       8,000  
Depreciation and amortization     141,000       194,000  
Stock based compensation expense     87,000       162,000  
Adjusted EBITDA   $ 1,384,000     $ 1,232,000  
                 
             
    Twelve months ended     Twelve months ended  
    December 31, 2015     December 31, 2014  
                 
Net income   $ 16,792,000     $ 4,148,000  
Income tax (benefit) expense     (11,276,000 )     100,000  
Other expense, net     15,000       209,000  
Depreciation and amortization     596,000       855,000  
Stock based compensation expense     366,000       429,000  
Litigation expense and non-routine legal and advisory services for corporate and governance matters     -       109,000  
Adjusted EBITDA   $ 6,493,000     $ 5,850,000  
                 
                 

Investor Contacts:

Steve Handy
CFO
(818)761-1002


EVC Group, Inc.
Doug Sherk
(415)652-9100
Brian Moore
(310)579-6199