Premier Exhibitions, Inc. Reports Second Quarter Fiscal 2010 Results

Revenue Increased 23% in the Second Quarter Compared to the First Quarter of Fiscal 2010


ATLANTA, Oct. 7, 2009 (GLOBE NEWSWIRE) -- Premier Exhibitions, Inc. (Nasdaq:PRXI), a major developer of touring museum-quality exhibits, today announced financial results for the fiscal year 2010 second quarter ended August 31, 2009:



  * Total revenue decreased 11 percent to $13.4 million in the
    second quarter of fiscal 2010 from $15.1 million in the second
    quarter of fiscal 2009 due to lower Bodies attendance and
    decreased merchandise revenue reflecting the reduction in touring
    Bodies exhibits and the disposition of the merchandise subsidiary.
  * Gross profit increased 14 percent to $8.2 million in the second
    quarter of fiscal 2010 from $7.1 million in the second quarter
    of fiscal 2009.
  * The second quarter of fiscal 2010 GAAP loss of ($0.5) million or
    ($0.02) per share compares with a GAAP profit of $0.9 million
    or $0.03 per share for the second quarter of fiscal 2009.
  * For the second quarter of fiscal 2010, Adjusted EBITDA (a non-GAAP
    measure) was $0.8 million which compares with ($0.2) million in
    the second quarter of fiscal 2009. (1) Reconciled GAAP and
    non-GAAP financial measures are provided in the tables below.
  * The GAAP loss and Adjusted EBITDA for the second quarter of
    fiscal 2010 include $7.5 million of General and Administrative
    expenses as compared with $4.7 million in the 2009 quarter. The
    tables below include a summary of the major components of General
    and Administrative expense for the second quarters of fiscal
    2009 and 2010, and indicate compensation expense excluding stock-
    based compensation decreased 58 percent. While the 2009 quarter
    benefited from a $2.6 million reversal of stock-based compensation
    expense, the 2010 quarter is impacted by items related to the
    restructuring of the business.
  * On August 31, 2009 total cash and marketable securities were
    $10.9 million and currently the Company has approximately $11.9
    million in cash and marketable securities on hand and no debt.
  * Total attendance for the second quarter of fiscal 2010 decreased
    four percent to 1,324,495 compared with 1,374,472 in the second
    quarter of fiscal 2009.
  * Total days of operation for the second quarter of fiscal 2010
    decreased 16 percent to 1,639 compared with 1,953 in the second
    quarter of fiscal 2009.

Chris Davino, Premier Exhibition's Chief Executive Officer stated, "On a sequential quarterly basis, total revenue increased 23 percent, gross profit margin rose to 61 percent from 53 percent in the previous quarter, and our non-GAAP measure adjusted EBITDA improved by over $2 million. While it's still early in the turnaround, the Company is now financially stable, leaner, and is working on a number of initiatives that should bear fruit in coming quarters. These new initiatives include sponsorship opportunities, the redesign and rebranding of certain exhibits, and new partnerships with key third parties. We expect to make several announcements about these new initiatives in the coming weeks and months."

2Q10 Conference Call Information

Company management will host its second quarter fiscal 2010 conference call on October 8, 2009 at 8:00 a.m. (EDT). Interested parties can access the call by dialing 1 (877) 874-1570 in the U.S. and 1 (719) 325-4839 internationally. Callers should reference confirmation code 5123143. A transcript of the conference call will be made available on the Company's website: www.prxi.com.



 (1) Adjusted EBITDA
 See Table 4 below for reconciliations of Adjusted EBITDA to
 GAAP Net income (loss).

This press release contains certain financial measures that are not prepared in accordance with GAAP (generally accepted accounting principles in the U.S.). Such financial measures are referred to herein as "non-GAAP" and are presented in this press release in accordance with Regulation G as promulgated by the Securities and Exchange Commission. A reconciliation of each such non-GAAP measure to its most directly comparable GAAP financial measure, together with an explanation of why management believes each such non-GAAP financial measure provides useful information to investors, is provided below.

Adjusted EBITDA is a non-GAAP financial measure that the Company defines as earnings before certain unusual and/or non-cash charges, depreciation and amortization, loss (gain) on sale of operating assets, impairment of intangible assets and goodwill, and non-cash compensation expense. The Company uses Adjusted EBITDA to evaluate the performance of its operating segments. The Company believes that information about Adjusted EBITDA assists investors by allowing them to evaluate changes in the operating results of the Company's portfolio of businesses separate from non-operational factors that affect net income, thus providing insights into both operations and the other factors that affect reported results. Adjusted EBITDA is not calculated or presented in accordance with GAAP. A limitation on the use of Adjusted EBITDA as a performance measure is that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenue in the Company's business. Accordingly, Adjusted EBITDA should be considered in addition to, and not as a substitute for, operating income (loss), net income (loss), and other measures of financial performance reported in accordance with GAAP. Furthermore, this measure may vary among other companies. Therefore, Adjusted EBITDA as presented herein may not be comparable to similarly titled measures of other companies.

About Premier Exhibitions

Premier Exhibitions, Inc. (Nasdaq:PRXI) develops and tours museum quality exhibitions. Presently the Company operates and/or presents and promotes three different types of exhibitions:



  * "Titanic: The Artifact Exhibition," "Titanic Aquatic" 
    and "Titanic: Treasures from the Deep;"

  * "Bodies.The Exhibition," and "Bodies Revealed;"

  * "Dialog in the Dark". 

Additional information about Premier Exhibitions is available at www.prxi.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve certain risks and uncertainties. The actual results or outcomes of Premier Exhibitions, Inc. may differ materially from those anticipated. Although Premier Exhibitions believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any such assumptions could prove to be inaccurate. Therefore, Premier Exhibitions can provide no assurance that any of the forward-looking statements contained in this press release will prove to be accurate.

In light of the significant uncertainties and risks inherent in the forward-looking statements included in this press release, such information should not be regarded as a representation by Premier Exhibitions that its objectives or plans will be achieved. Included in these uncertainties and risks are, among other things, fluctuations in operating results, general economic conditions, uncertainty regarding the results of certain legal proceedings and competition. Forward-looking statements consist of statements other than a recitation of historical fact and can be identified by the use of forward-looking terminology such as "may," "intend," "expect," "will," "anticipate," "estimate" or "continue" or the negatives thereof or other variations thereon or comparable terminology. Because they are forward-looking, such statements should be evaluated in light of important risk factors and uncertainties. These risk factors and uncertainties are more fully described in Premier Exhibitions' most recent Annual and Quarterly Reports filed with the Securities and Exchange Commission, including under the heading entitled "Risk Factors." Premier Exhibitions does not undertake an obligation to update publicly any of its forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.



                                                               Table 1

            Premier Exhibitions, Inc. and Subsidiaries
              Condensed Consolidated Balance Sheets
                (in thousands, except share data)


                                           August 31,     February 28,
                                             2009             2009
                                          (unaudited)
                                         -------------   -------------
 Assets

 Current assets:
  Cash and cash equivalents                $  7,653         $  4,452
  Marketable securities                       3,284            1,277
  Accounts receivable, net of allowance
   for doubtful accounts of $2,080 
   and $754, respectively                     5,265            5,009
  Merchandise inventory, net of reserve
   of $182 and $147, respectively               546              431
  Income taxes receivable                     4,113            3,806
  Deferred income taxes                       2,087            1,408
  Prepaid expenses and other current 
   assets                                     2,058            4,981
                                         -------------   -------------
 Total current assets                        25,006           21,364

  Artifacts owned, at cost                    3,063            3,081
  Salvor's lien                                   1                1
  Property and equipment, net of 
   accumulated depreciation of 
   $9,376 and $8,518, respectively           14,876           15,706
  Exhibition licenses, net of 
   accumulated amortization of $4,887 
   and $4,427, respectively                   4,207            7,225
  Goodwill                                       --            2,567
  Deferred income taxes                       3,506            2,685
  Note receivable                               625              625
  Other assets                                  250              521
                                         -------------   -------------
                                           $ 51,534         $ 53,775
                                         =============   =============

 Liabilities and Shareholders' Equity

 Current liabilities:
  Accounts payable and accrued 
   liabilities                             $  4,805         $ 11,712
  Deferred revenue                              676            2,340
                                         -------------   -------------
 Total current liabilities                    5,481           14,052
 Long-term liabilities:
  Income taxes payable                        1,191            1,166
  Convertible promissory notes               12,000               --
                                         -------------   -------------
 Total long-term liabilities                 13,191            1,166

 Shareholders' equity:
  Common stock; $.0001 par value; 
   authorized 65,000,000 shares        
   issued and outstanding of          
   31,314,507 and 31,265,415 shares,   
   respectively                                   3                3
  Additional paid-in capital                 45,293           44,691
  (Accumulated deficit) retained 
   earnings                                  (4,934)           1,384
  Accumulated other comprehensive loss         (310)            (331)
  Treasury stock, at cost; 1,066,449 
   shares                                    (7,190)          (7,190)
                                         -------------   -------------
 Total shareholders' equity                  32,862           38,557
                                         -------------   -------------

                                           $ 51,534         $ 53,775
                                         =============   =============


                                                               Table 2


           Premier Exhibitions, Inc. and Subsidiaries
         Condensed Consolidated Statements of Operations
         (in thousands, except share and per share data)
                           (unaudited)


                                                              Three
                                                              Months
                                    Three Months Ended        Ended
                                  August 31,     May 31,    August 31,
                                     2008         2009         2009
                                 -----------  -----------  -----------
                                     2Q09          1Q10         2Q10
 Revenue:                     
  Exhibition revenues            $    12,636  $     9,850  $    12,503
  Merchandise and other                2,468        1,087          937
                                 -----------  -----------  -----------
 Total revenue                        15,104       10,937       13,440
                              
 Cost of revenue:             
  Exhibition costs                     7,440        4,890        5,052
  Cost of merchandise sold               522          252          213
                                 -----------  -----------  -----------
 Total cost of revenue        
  (exclusive of depreciation 
  and amortization shown 
  separately below)                    7,962        5,142        5,265
                              
 Gross profit                          7,142        5,795        8,175
                                 -----------  -----------  -----------
                              
 Operating expenses:          
  General and administrative           4,718        7,324        7,449
  Depreciation and amortization        1,123        1,627        1,318
  Impairment of goodwill and       
   intangible assets                      --        4,512           --
                                 -----------  -----------  -----------
 Total operating expenses              5,841       13,463        8,767
                              
                                 -----------  -----------  -----------
 Income (Loss) from operations         1,301       (7,668)        (592)
                              
                                 -----------  -----------  -----------
 Other (expense) income                   78          (39)        (171)
                              
 Income (loss) before benefit         
  from income taxes                    1,379       (7,707)        (763)
                              
 Benefit from income taxes              (440)       1,902          250
                                 -----------  -----------  -----------
                              
 Net income (loss)               $       939  $    (5,805) $      (513)
                                 ===========  ===========  ===========
                              
 Net income (loss) per share:
                              
 Basic income (loss) per common
  share                          $      0.03  $     (0.20) $     (0.02)
                                 ===========  ===========  ===========
 Diluted income (loss) per
  common share                   $      0.03  $     (0.20) $     (0.02)
                                 ===========  ===========  ===========
                                
 Shares used in basic per     
  share calculations              29,203,500   29,696,954   30,212,306
                                 ===========  ===========  ===========
 Shares used in diluted per
  share calculations              31,245,556   29,696,954   30,212,306
                                 ===========  ===========  ===========


                                                               Table 3

              Premier Exhibitions, Inc. and Subsidiaries
           Condensed Consolidated Statements of Cash Flows
                           (in thousands)
                           (unaudited)

                                        Three Months         Six Months
                                           Ended               Ended
                                Aug. 31,   May 31,  Aug. 31,  Aug. 31,
                                  2008      2009      2009      2009
                                --------  --------  --------  --------
                                  2Q09      1Q10      2Q10      1H10
 Cash flows from operating
  activities:
  Net loss                      $    939  $ (5,805) $   (513) $ (6,317)
                                --------  --------  --------  --------
  Adjustments to reconcile net
   income to net cash provided
   (used) by operating
   activities:
   Depreciation and amortization   1,087     1,627     1,318     2,945
   Stock based compensation       (2,634)      212       100       312
   Allowance for doubtful
    accounts                         219      (439)    1,326       887
   Impairment of goodwill and
    intangible assets                 --     4,512        --     4,512
   Excess tax benefit on the
    exercise of employee
    stock options                     (5)       --        --        --
   Stock issued in connection
    with lawsuit settlement           --        50        --        50
   Changes in operating assets
    and liabilities:                                                --
    (Increase) decrease in
     accounts receivable          (2,070)    1,100    (2,243)   (1,143)
    (Increase) in merchandise
     inventories                      --        --      (115)     (115)
    Decrease (increase) in
     deferred income taxes            41      (983)     (515)   (1,498)
    (Increase) decrease in
     prepaid expenses and other
     current assets               (1,596)      851     2,361     3,212
    Decrease (increase) in
     income tax receivable           398      (364)       57      (307)
    Increase (decrease) in
     deferred revenue                453      (435)   (1,229)   (1,664)
    Increase (decrease) in
     accounts payable and
     accrued liabilities           2,460    (2,600)   (4,307)   (6,907)
                                --------  --------  --------  --------
  Total adjustments               (1,647)    3,531    (3,247)      284
                                --------  --------  --------  --------
  Net cash used in
   operating activities             (708)   (2,274)   (3,760)   (6,033)
                                --------  --------  --------  --------

 Cash flows used by investing
  activities:
  Purchases of property
   and equipment                  (4,023)     (642)     (401)   (1,043)
  Purchase of exhibition
   licenses                         (829)       --        --        --
  Purchase of marketable
   security                          (19)       --    (2,007)   (2,007)
                                --------  --------  --------  --------
  Net cash used by investing
   activities                     (4,871)     (642)   (2,408)   (3,050)
                                --------  --------  --------  --------

 Cash flows from financing
  activities:
  Proceeds from issuance
   of convertible notes               --     6,000     6,000    12,000
  Excess tax benefit on the
   exercise of employee
   stock options                       5        --        --        --
  Proceeds from option exercises     229       261        --       261
                                --------  --------  --------  --------
  Net cash provided by
   financing activities              234     6,261     6,000    12,261
                                --------  --------  --------  --------

  Effects of exchange rate
   changes on cash and
   cash equivalents                  (22)        6        15        21
                                --------  --------  --------  --------
   Net increase (decrease) in
    cash and cash equivalents     (5,367)    3,352      (153)    3,199
   Cash and cash equivalents
    at beginning of year              --     4,452        --     4,452
                                --------  --------  --------  --------
   Cash and cash equivalents
    at end of period            $ (5,367) $  7,804  $   (153) $  7,651
                                ========  ========  ========  ========

 Supplemental disclosure of
  cash flow information:
   Cash paid during the
    period for interest         $      3  $     48  $    (48) $     --
                                ========  ========  ========  ========

 Supplement disclosure of
  non-cash operating activities:
   Non-cash withholding taxes
    receivable                  $     --  $    (69) $     69  $     --
                                ========  ========  ========  ========
   Non-cash withholding
    taxes payable               $     --  $     69  $    (69) $     --
                                ========  ========  ========  ========
   Uncertain tax provision      $     --  $    (13) $     13  $     --
                                ========  ========  ========  ========

 Supplemental disclosure of
  non-cash investing and
  financing activities:
   Cashless exercise
    of stock options            $     --  $     14  $     --  $     14
                                --------  --------  --------  --------


                                                               Table 4

                    EBITDA and Adjusted EBITDA
                         (In thousands)

                                                              Three
                                                              Months
                                    Three Months Ended        Ended
                                  August 31,     May 31,    August 31,
                                     2008         2009         2009
                                 -----------  -----------  -----------
                                     2Q09          1Q10         2Q10

 Net income (loss)                 $    939     $ (5,805)    $   (513)
 Benefit from income taxes             (440)       1,902          250
 Other income and (expenses)             78          (39)        (171)
 Depreciation & Amortization          1,123        1,627        1,318
 Stock Compensation                  (2,634)         262          100
 Impairment of goodwill and                   
  intangible assets                      --        4,512           --
                                 -----------  -----------  -----------
          Adjusted EBITDA          $   (210)    $ (1,267)    $    826
                                 ===========  ===========  ===========



                                                               Table 5

               Summary of General & Administrative expense
                             (In thousands)

                                                 Three Months Ended
                                               August 31,   August 31,
                                                  2008        2009
                                               ----------   ----------
                                                  2Q09        2Q10

 Compensation, excluding stock based 
  compensation                                  $ 4,721      $ 1,995
 Stock based compensation                        (2,634)         100
 Bad Debt Expense                                   219        1,645
 Legal and other professional fees                  925        1,985
 Rent and other office expenses                     632          277
 Other                                              855        1,447
                                               ----------   ----------
    General & Administrative expense            $ 4,718      $ 7,449
                                               ==========   ==========

Non-GAAP Measure:

Adjusted EBITDA is defined as earnings before certain unusual and/or non-cash charges, depreciation and amortization, loss (gain) on sale of operating assets, impairment of intangible assets and goodwill, and non-cash compensation expense. Adjusted EBITDA should be considered in addition to, and not as a substitute for, operating income (loss), net income (loss), and other measures of financial performance reported in accordance with GAAP.



            

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