ATLANTA, Jan. 6, 2010 (GLOBE NEWSWIRE) -- Premier Exhibitions, Inc. (Nasdaq:PRXI), a major developer of touring museum-quality exhibits, today announced financial results for the fiscal year 2010 third quarter ended November 30, 2009:
* Total revenue was $8.7 million in the third quarter of fiscal 2010 compared with $13.5 million in the third quarter of fiscal 2009. Last year's third quarter included $4.6 million in non-refundable license fees for future exhibitions. The current quarter did not contain any such license fees. Due to current year events, for fiscal 2010 and beyond, the Company will recognize non-refundable exhibition license fees as revenue when the applicable exhibitions open to the public. * Table 6 to this release shows the component parts of exhibition revenue. While non-refundable license fees related to future exhibitions decreased 4.5 million, all other forms of exhibition revenue increased from the third quarter of 2009 to the third quarter of 2010. Admissions revenue in the quarter increased 16% compared with the same quarter last year. * In the fourth quarter of fiscal 2009, the Company disposed of a subsidiary that sold merchandise at live music events in addition to our exhibitions. Prior period revenues included revenues from these non-core activities. Consequently, merchandise revenue declined $1.4 million to $753,000 in the third quarter of fiscal 2010 from $2.2 million in the third quarter of fiscal 2009. * General and Administrative expenses decreased $1.7 million to $4.7 million in the third quarter of fiscal 2010 compared with $6.4 million in the 2009 third quarter. The tables below include a summary of the major components of General and Administrative expenses. Total compensation expense decreased 38%. However, legal and professional fees remained high as the Company continued to resolve legacy issues. * Gross profit decreased to $2.6 million in the third quarter of fiscal 2010 from $4.9 million in the third quarter of fiscal 2009, largely a reflection of the revenue from the pre-paid license transaction in the prior year period. * The third quarter of fiscal 2010 GAAP loss of ($2.2) million or ($0.05) per share compares with a GAAP loss of ($1.8) million or ($0.06) per share for the third quarter of fiscal 2009. * For the third quarter of fiscal 2010, Adjusted EBITDA (a non-GAAP measure) was ($1.9) million which compares with ($1.0) million in the third quarter of fiscal 2009. (1) Reconciled GAAP and non-GAAP financial measures are provided in the tables below. * On November 30, 2009, total cash and marketable securities were $10.2 million. The Company currently has approximately $13.8 million in cash and marketable securities on hand and no debt. * Total days of operation for the third quarter of fiscal 2010 decreased 17 percent to 1,361 compared with 1,641 in the third quarter of fiscal 2009, primarily reflecting management's decision to eliminate three touring Bodies shows in the first quarter of fiscal 2010. * Average daily attendance for the third quarter of fiscal 2010 increased 2 percent to 602 compared with 589 in the third quarter of fiscal 2009, as total attendance for the third quarter of fiscal 2010 decreased 15 percent to 819,941 compared with 967,358 in the third quarter of fiscal 2009, in line with reduced days of operation. * Additionally, the Company resolved its litigation with Arnie Geller, the Company's previous CEO and Chairman. The agreement is a mutual release of all claims and counter claims, and involves a payment to Mr. Geller which is not material to the company. This expense has been included in the results of operations for the third fiscal quarter.
Chris Davino, Premier Exhibition's Chief Executive Officer, stated, "Our third quarter results continue to reflect the impact of restructuring the business, but results of our core operations have improved over the prior year as we focus on booking profitable revenue rather than growth at any cost. We remain focused on keeping operating costs in line, although legacy issues -- primarily litigation costs and the costs associated with eliminating and restructuring certain of our third-party relationships -- continued to weigh on our results this quarter. We have made great strides in filling the holes in the exhibition schedule that existed when we took over the business in January 2009, and our latest self-run shows in North America are performing better than expected. Days of operation decreased partly by design as we continue to scale the business with the aim of becoming more streamlined and more profitable."
John Stone, Premier's Chief Financial Officer, said, "Third quarter revenue was down compared with the second quarter, consistent with trends in prior years. This sequential pattern can be seen in table 6 below, which separates non-recurring licensing revenue related to future exhibitions. Contrary to the practices of past management, we will only recognize license revenue when the related show occurs. It is worth noting that the other forms of exhibition revenue increased nicely compared with last year's third quarter on higher ticket pricing, a slight increase in average daily attendance per show, and a richer mix of self-run shows. In addition, G&A expenses decreased 28% from the same quarter last year due to headcount and other expense reductions we've implemented."
Mr. Stone continued, "When new management arrived at Premier 11 months ago, we quickly learned that payables had been stretched to their breaking point in order to conserve cash. As a result, our first job was to pacify vendors so the Company could continue to operate on a day-to-day basis, which meant paying down the bills that had accumulated. As a result, we brought accounts payable down from $11.7 million in February 2009 to $4.3 million today, which used a significant amount the $12 million in cash that we raised in the first half of the year and was painful, but was necessary to continue operating. Without working capital adjustments such as the reduction in payables, the business has been cash flow positive in Fiscal 2010. Now that we've substantially improved the balance sheet, our next step is to improve the income statement. You should begin to see evidence of this in coming quarters as legal fees and legacy non-cash write-offs abate and our exhibition calendar is filled."
3Q10 Conference Call Information
Company management will host its third quarter fiscal 2010 conference call on January 7, 2010 at 9:00 a.m. (EST). Interested parties can access the call by dialing 1 (800) 274-0251 in the U.S. and 1 (719) 325-2331 internationally. Callers should reference confirmation code 6614517. 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 expenses. 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," and "Titanic Aquatic;" * "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 may contain 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) November 30, February 28, 2009 2009 (unaudited) ------------ ------------ Assets Current assets: Cash and cash equivalents $ 6,927 $ 4,452 Marketable securities 3,300 1,277 Accounts receivable, net of allowance for doubtful accounts of $543 and $1,193, respectively 3,060 5,009 Merchandise inventory, net of reserve of $233 and $143, respectively 749 431 Income taxes receivable 6,710 3,806 Deferred income taxes 2,087 1,408 Prepaid expenses and other current assets 3,737 4,981 ------------ ------------ Total current assets 26,570 21,364 Artifacts owned, at cost 3,056 3,081 Salvor's lien 1 1 Property and equipment, net of accumulated depreciation of $10,280 and $7,503, respectively 14,415 15,706 Exhibition licenses, net of accumulated amortization of $4,532 and $4,806, respectively 3,715 7,225 Goodwill -- 2,567 Deferred income taxes 1,973 2,685 Note receivable 563 625 Other assets 250 521 ------------ ------------ $ 50,543 $ 53,775 ============ ============ Liabilities and Shareholders' Equity Current liabilities: Accounts payable and accrued liabilities $ 4,313 $ 11,712 Deferred revenue 1,941 2,340 ------------ ------------ Total current liabilities 6,254 14,052 Long-term liabilities: Income taxes payable 1,191 1,166 ------------ ------------ Total long-term liabilities 1,191 1,166 Shareholders' equity: Common stock; $.0001 par value; authorized 65,000,000 shares; issued 47,648,483 and 31,265,415 shares, respectively outstanding 46,582,034 and 29,414,919, respectively 5 3 Additional paid-in capital 57,695 44,691 (Accumulated deficit) retained earnings (7,103) 1,384 Accumulated other comprehensive loss (309) (331) Treasury stock, at cost; 1,066,449 shares (7,190) (7,190) ------------ ------------ Total shareholders' equity 43,098 38,557 ------------ ------------ ------------ ------------ $ 50,543 $ 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 Ended November 30, August 31, November 30, August 31, 2009 2009 2008 2008 3Q10 2Q10 3Q09 2Q09 ------------ ------------ ------------ ------------ Revenue: Exhibition revenues $ 7,949 $ 12,503 $ 11,285 $ 12,636 Merchandise and other 753 937 2,171 2,468 ------------ ------------ ------------ ------------ Total revenue 8,702 13,440 13,456 15,104 Cost of revenue: Exhibition costs 5,719 5,052 7,348 7,440 Cost of merchandise sold 340 213 1,252 522 ------------ ------------ ------------ ------------ Total cost of revenue (exclusive of depreciation and amortization shown separately below) 6,059 5,265 8,600 7,962 Gross profit 2,643 8,175 4,856 7,142 Operating expenses: General and administrative 4,660 7,449 6,429 4,718 Depreciation and amortization 1,412 1,318 1,273 1,123 ------------ ------------ ------------ ------------ Total operating expenses 6,072 8,767 7,702 5,841 ------------ ------------ ------------ ------------ Income (Loss) from operations (3,429) (592) (2,846) 1,301 Other (expense) income (46) (171) 139 78 ------------ ------------ ------------ ------------ Income (loss) before benefit from income taxes (3,475) (763) (2,707) 1,379 (Benefit) provision from income taxes 1,305 (250) 865 440 ------------ ------------ ------------ ------------ Net income (loss) $ (2,170) $ (513) $ (1,842) $ 939 ============ ============ ============ ============ Net income (loss) per share: Basic income (loss) per common share $ (0.05) $ (0.02) $ (0.06) $ 0.03 ============ ============ ============ ============ Diluted income (loss) per common share $ (0.05) $ (0.02) $ (0.06) $ 0.03 ============ ============ ============ ============ Shares used in basic per share calculations 41,019,416 30,212,306 29,291,666 29,203,500 ============ ============ ============ ============ Shares used in diluted per share calculations 41,019,416 30,212,306 29,291,666 31,245,556 ============ ============ ============ ============
Three Months Ended November 30, August 31, 2007 2007 3Q08 2Q08 ------------ ------------ Revenue: Exhibition revenues $ 16,311 $ 15,480 Merchandise and other 424 642 ------------ ------------ Total revenue 16,735 16,122 Cost of revenue: Exhibition costs 5,172 3,940 Cost of merchandise sold 33 102 ------------ ------------ Total cost of revenue (exclusive of depreciation and amortization shown separately below) 5,205 4,042 Gross profit 11,530 12,080 Operating expenses: General and administrative 6,934 3,442 Depreciation and amortization 614 567 ------------ ------------ Total operating expenses 7,548 4,009 ------------ ------------ Income (Loss) from operations 3,982 8,071 Other (expense) income 289 248 ------------ ------------ Income (loss) before benefit from income taxes 4,271 8,319 (Benefit) provision from income taxes 1,541 2,774 ------------ ------------ Net income (loss) $ 2,730 $ 5,545 ============ ============ Net income (loss) per share: Basic income (loss) per common share $ 0.09 $ 0.19 ============ ============ Diluted income (loss) per common share $ 0.08 $ 0.17 ============ ============ Shares used in basic per share calculations 30,047,900 29,792,671 ============ ============ Shares used in diluted per share calculations 34,097,129 33,478,800 ============ ============
Table 3 Premier Exhibitions, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) Three Months Ended Nine Months Ended November 30, November 30, ------------------- ------------------- 2009 2008 2009 2008 -------- -------- -------- -------- Cash flows from operating activities: Net loss $ (2,170) $ (1,842) $ (8,487) $ (1,815) -------- -------- -------- -------- Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation and amortization 1,412 1,424 4,357 3,696 Stock-based compensation 156 618 468 (400) Allowance for doubtful accounts (1,475) 257 (588) 476 Impairment of goodwill and intangible assets -- -- 4,512 -- Excess tax benefit on the exercise of employee stock options -- 35 -- 30 Stock issued in connection with lawsuit settlement -- -- 50 -- Accrued interest converted into common stock 247 -- 247 -- Changes in operating assets and liabilities: Decrease (increase) in accounts receivable 3,742 (1,995) 2,599 (4,106) (Increase) in merchandise inventories (203) (1,357) (318) (1,357) Decrease (increase) in deferred income taxes 1,534 (105) 36 (122) (Increase) decrease in prepaid expenses and other current assets (1,686) 1,771 1,526 655 (Increase) in income tax receivable (2,597) (776) (2,904) (3,271) Increase (decrease) in deferred revenue 1,265 232 (399) 685 (Decrease) increase in accounts payable and accrued liabilities (491) 2,128 (7,398) 3,938 -------- -------- -------- -------- Total adjustments 1,904 2,232 2,188 224 -------- -------- -------- -------- Net cash used in operating activities (266) 390 (6,299) (1,591) -------- -------- -------- -------- Cash flows used by investing activities: Proceeds from Carpathia receivable -- -- -- 2,500 Purchases of property and equipment (443) (4,145) (1,486) (8,974) Purchase of exhibition licenses -- 199 -- (1,908) Acquisition, net of cash received -- -- -- (2,101) Purchase of marketable securities (16) (199) (2,023) (218) -------- -------- -------- -------- Net cash used by investing activities (459) (4,145) (3,509) (10,701) -------- -------- -------- -------- Cash flows from financing activities: Proceeds from issuance of convertible notes -- -- 12,000 -- Proceeds from revolving line of credit -- 3,969 -- 3,969 Payments on revolving line of credit -- (3,542) -- (3,542) Excess tax benefit on the exercise of employee stock options -- (35) -- (30) Proceeds from option exercises -- -- 261 229 -------- -------- -------- -------- Net cash provided by financing activities -- 392 12,261 626 -------- -------- -------- -------- Effects of exchange rate changes on cash and cash equivalents 1 (33) 22 (51) -------- -------- -------- -------- Net (decrease) increase in cash and cash equivalents (724) (3,396) 2,475 (11,717) Cash and cash equivalents at beginning of year -- -- 4,452 16,426 -------- -------- -------- -------- Cash and cash equivalents at end of period $ (724) $ (3,396) $ 6,927 $ 4,709 ======== ======== ======== ======== Supplemental disclosure of cash flow information: Cash paid during the period for taxes $ -- $ -- $ -- $ 1,529 ======== ======== ======== ======== Supplemental disclosure of non-cash investing and financing activities: Cashless exercise of stock options $ -- $ -- $ 14 $ -- ======== ======== ======== ======== Conversion of convertible notes and accrued interest $ -- $ -- $ 12,247 $ -- ======== ======== ======== ========
Table 4 EBITDA and Adjusted EBITDA (In thousands) Three Months Ended November 30, November 30, August 31, 2009 2008 2009 3Q10 3Q09 2Q10 ------------ ------------ ------------ Net loss $ (2,170) $ (1,842) $ (513) (Benefit) provision from income taxes (1,305) (865) (250) Other expenses 46 (139) 171 Gain on disposal (21) -- -- Depreciation & Amortization 1,412 1,273 1,318 Stock-based compensation 157 618 100 ------------ ------------ ------------ Adjusted EBITDA $ (1,881) $ (955) $ 826 ============ ============ ============
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.
Table 5 Summary of General & Administrative expense (In thousands) Three Months Ended November 30, 2009 November 30, 2008 3Q10 3Q09 ----------------- ----------------- Compensation, excluding stock based compensation $ 1,699 $ 2,377 Stock-based compensation 157 618 Bad Debt Expense (3) 257 Legal and other professional fees 1,317 1,236 Rent and other office expenses 331 468 Other 1,159 1,473 ----------------- ----------------- General & Administrative expense $ 4,660 $ 6,429 ================= =================
Table 6 Exhibition Revenues (in thousands) Three Months Ended Nov. 30, Aug. 31, Nov. 30, Aug. 31, Nov. 30, Aug. 31, 2009 2009 2008 2008 2007 2007 3Q10 2Q10 3Q09 2Q09 3Q08 2Q08 -------- -------- -------- -------- -------- -------- Admissions revenue $ 6,933 $ 10,718 $ 5,977 $ 11,851 $ 8,998 $ 11,748 Non-refundable license fees for future exhibitions -- -- 4,590 400 6,183 2,669 Non-refundable license fees for current exhibitions 1,016 1,785 718 385 1,130 1,063 -------- -------- -------- -------- -------- -------- Total exhibition revenues $ 7,949 $ 12,503 $ 11,285 $ 12,636 $ 16,311 $ 15,480 ======== ======== ======== ======== ======== ========
During the first quarter of fiscal 2010, the Company entered into an amendment to an existing multiple element agreement with promoters that modified certain of the terms and conditions of the agreement. Although these modifications had no impact on revenue recognized in this fiscal year or prior periods, the amendments modify our analysis and computation of the fair value of the undelivered elements in such a way that we will no longer be able to support the fair value of the undelivered elements in a multiple element arrangement as required by U.S. GAAP. As a result, during fiscal 2010 and in the future the Company will no longer recognize payment of non-refundable exhibition license revenue upon execution of an agreement or upon cash collection as a separate deliverable, but rather will defer such amounts until the time that the exhibition occurs, or the allowed time period for such an exhibition has passed and no remaining obligation to host such exhibition exists. This first quarter change had no impact on revenue recognized in prior periods, including non-refundable exhibition license revenue that was recognized.