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Premier Exhibitions Reports Second Quarter 2013 Results

Stocks in this article: PRXI

About Premier Exhibitions

Premier Exhibitions, Inc. (Nasdaq:PRXI), located in Atlanta, GA, is a major provider of museum quality exhibitions throughout the world and a recognized leader in developing and displaying unique exhibitions for education and entertainment. The Company's exhibitions present unique opportunities to experience compelling stories using authentic objects and artifacts in diverse environments. Exhibitions are presented in museums, exhibition centers and other entertainment venues.

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

The Premier Exhibitions, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=12992

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.
Condensed Consolidated Balance Sheets
(in thousands, except share data)
 
  August 31, February 29,
  2012 2012
  (Unaudited)  
ASSETS
     
Current assets:    
Cash and cash equivalents  $ 5,603  $ 2,344
Certificates of deposit and other investments  405  405
Accounts receivable, net of allowance for doubtful accounts of $325 and $311, respectively  2,554  1,390
Merchandise inventory, net of reserve of $82 and $22, respectively  1,465  1,082
Deferred income taxes  44  44
Income taxes receivable  110  246
Prepaid expenses   5,588  1,078
Other current assets  143  88
Total current assets  15,912  6,677
     
Artifacts owned, at cost  2,953  2,990
Salvor's lien  1  1
Property and equipment, net of accumulated depreciation of $16,025 and $14,183, respectively  12,465  10,298
Exhibition licenses, net of accumulated amortization of $5,567 and $5,470, respectively  2,131  2,228
Other receivable, net of allowance for doubtful accounts of $387 and $206, respectively  6  15
Film, gaming and other application assets, net of accumulated amortization of $206 and $175, respectively  3,127  3,158
Long-term exhibition costs  580  --
Subrogation rights  250  250
Total Assets  $ 37,425  $ 25,617
     
     
LIABILITIES AND SHAREHOLDERS' EQUITY
     
Current liabilities:    
Accounts payable and accrued liabilities  $ 4,398  $ 4,707
Income taxes payable  122  3
Deferred revenue  1,740  2,254
Short-term portion of notes payable  4,053  505
Total current liabilities  10,313  7,469
     
Long-Term liabilities:    
Lease abandonment  2,108  2,397
Long-term portion of notes payable  167  575
Deferred income taxes  44  44
Total long-term liabilities  2,319  3,016
     
Commitment and Contingencies    
     
Shareholders' equity:    
Common stock; $.0001 par value; authorized 65,000,000 shares; issued 48,018,753 and 44,883,927 shares, respectively; outstanding 48,016,744 and 47,881,918 shares, respectively  5  5
Additional paid-in capital  53,090  52,479
Accumulated deficit  (32,890)  (36,866)
Accumulated other comprehensive loss  (478)  (485)
Less treasury stock, at cost; 2,009 shares   (1)  (1)
Equity Attributable to Shareholders of Premier Exhibitions, Inc.  19,726  15,132
Equity Attributable to Non-controlling interest  5,067  --
Total liabilities and shareholders' equity  $ 37,425  $ 25,617
     
        Table 2
Premier Exhibitions, Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(in thousands, except share and per share data)
(unaudited)
 
  Three Months Ended August 31, Six Months Ended August 31,
  2012 2011 2012 2011
Revenue:        
Exhibition revenue  $ 10,582  $ 7,338  $ 19,571  $ 16,010
Merchandise revenue  2,589  877  4,899  1,930
Management fee  250  --  361  --
Licensing fee  9  --  59  --
Total revenue  13,430  8,215  24,890  17,940
         
Cost of revenue:        
Exhibition costs  4,257  4,394  8,647  8,242
Cost of merchandise sold  985  295  1,783  633
Total cost of revenue (exclusive of depreciation and amortization shown separately below)  5,242  4,689  10,430  8,875
         
Gross profit  8,188  3,526  14,460  9,065
         
Operating expenses:        
General and administrative  4,236  3,406  8,172  6,818
Depreciation and amortization  817  955  1,731  2,010
Impairment of intangibles and fixed assets  --  358  --  358
Litigation settlement  --  783  --  783
Total operating expenses  5,053  5,502  9,903  9,969
         
Income (loss) from operations  3,135  (1,976)  4,557  (904)
         
Interest expense  (121)  --   (174)  -- 
Gain on debt modification  71  --   71  -- 
Other income  5  7  17  14
         
Income (loss) before income taxes  3,090  (1,969)  4,471  (890)
         
Income tax expense  116  39  228  39
         
Net income (loss)  2,974  (2,008)  4,243  (929)
Less: Net (income)/loss attributable to non-controlling interest  (214)  214  (267)  239
Net income (loss) attributable to the shareholders of Premier Exhibitions, Inc.  $ 2,760  $ (1,794)  $ 3,976  $ (690)
         
Net income (loss) per share:        
Basic income (loss) per common share  $ 0.06  $ (0.04)  $ 0.08  $ (0.01)
Diluted income (loss) per common share  $ 0.06  $ (0.04)  $ 0.08  $ (0.01)
         
Shares used in basic per share calculations   47,997,541  47,415,123  47,968,077  47,328,827
Shares used in diluted per share calculations  49,058,133  47,415,123  49,079,563  47,328,827
         
Comprehensive income  $ 2,761  $ (1,796)  $ 3,983  $ (673)
         
        Table 3
Premier Exhibitions, Inc.
Condensed Consolidated Statements of Cash Flow
(in thousands)
(unaudited)
 
  Three Months Ended August 31, Six Months Ended August 31,
  2012 2011 2012 2011
Cash flows from operating activities:        
Net income (loss)  $ 2,974  $ (2,008)  $ 4,243  $ (929)
         
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:        
Depreciation and amortization  817  955  1,731  2,010
Impairment of intangibles and fixed assets  --  358  --  358
Gain on debt modification  (71)  --  (71)  --
Lease abandonment  (145)  (141)  (289)  (309)
Stock-based compensation  323  189  553  371
Allowance for doubtful accounts  105  (12)  195  (12)
Net gain on disposal of assets  --  (20)  --  (20)
Changes in operating assets and liabilities:        
(Increase)/decrease in accounts receivable  (1,061)  (10)  (1,178)  916
(Increase)/decrease in merchandise inventory, net of reserve  (57)  (29)  (358)  39
Decrease in notes receivable  --  --  --  200
Decrease/(increase) in prepaid expenses   (28)  (645)  76  (418)
(Increase)decrease in other assets  (22)  14  (55)  90
Increase in other receivables  (83)  --  (172)  
(Increase)decrease in income taxes receivable  (60)  49  136  49
Increase/(decrease) in accounts payable and accrued liabilities  (644)  1,217  (309)  (206)
Increase/(decrease) in deferred revenue  (545)  (38)  (514)  (1,031)
Increase in income taxes payable  82  --  119  --
Total adjustments  (1,389)  1,887  (136)  2,037
Net cash provided by (used in) operating activities  1,585  (121)  4,107  1,108
         
Cash flows from investing activities:        
Purchases of property and equipment  (171)  (564)  (345)  (910)
Proceeds from disposal of assets  --  20  --  20
Acquisition of Exhibit Merchandising, LLC  (125)  --  (125)  --
Purchases of certificates of deposit  --  (3)  --  (3)
Decrease in artifacts  15  2  37  10
Non-controlling investment in consolidated joint venture  --  52  --  77
Net cash used in investing activities  (281)  (493)  (433)  (806)
         
Cash flows from financing activities:        
Proceeds from option and warrant exercises  --  3  136  8
Purchase of treasury stock  (78)  --  (78)  --
Payments on notes payable  (315)  --  (480)  --
Net cash (used in) provided by financing activities  (393)  3  (422)  8
         
Effects of exchange rate changes on cash and cash equivalents  1  (2)  7  20
         
Net increase (decrease) in cash and cash equivalents  912  (613)  3,259  330
Cash and cash equivalents at beginning of period  4,691  4,707  2,344  3,764
         
Cash and cash equivalents at end of period  $ 5,603  $ 4,094  $ 5,603  $ 4,094
         
Supplemental disclosure of cash flow information:        
Cash paid during the period for interest  $ 22  $ --  $ 42  $ --
Cash paid/(received) during the period for taxes  $ 94  $ 9  $ (26)  $ 37
Supplemental disclosure of non-cash investing and financing activities:        
Unrealized loss on marketable securities  $ --  $ --  $ --  $ 3
Assets purchased with notes payable  $ --  $ --  $ 11,917  $ --
         
Table 4
Adjusted EBITDA
(In thousands)
 
 
  Three Months Ended Six Months Ended
  August 31, 2012 August 31, 2011 August 31, 2012 August 31, 2011
  2Q13 2Q12 2Q13 2Q12
         
Net income (loss)  $ 2,974  $ (2,008)  $ 4,243  $ (929)
Provision for income taxes  116  39  228  39
Interest expense  121  --  174  --
Gain on debt modification  (71)  --  (71)  --
Other income  (5)  (7)  (17)  (14)
Gain on disposal  --  (20)  --  (20)
Depreciation and amortization  817  955  1,731  2,010
Litigation settlement  --  783  --  783
Impairment of intangibles and fixed assets  --  358  --  358
Stock-based compensation  323  189  553  371
Adjusted EBITDA (1)  $ 4,275  $ 289  $ 6,841  $ 2,598
         

(1) Adjusted EBITDA

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 expenses. The Company uses Adjusted EBITDA to evaluate the performance of its operating segments. 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 Six Months Ended
  August 31, 2012 August 31, 2011 August 31, 2012 August 31, 2011
  2Q13 2Q12 2Q13 2Q12
         
Compensation, excluding stock-based compensation  $ 2,080  $ 1,440  $ 3,827  $ 2,906
Stock-based compensation  323  189  553  371
Bad debt expense  14  --  14  --
Legal and other professional fees  731  542  1,805  1,105
Rent and other office expenses  368  364  676  700
Other  720  871  1,297  1,736
General & Administrative expense  $ 4,236  $ 3,406  $ 8,172  $ 6,818
         
        Table 6
Exhibition Revenue & Operating Statistics
(In thousands)
         
  Three Months Ended Six Months Ended
  August 31, 2012 August 31, 2011 August 31, 2012 August 31, 2011
  2Q13 2Q12 2Q13 2Q12
         
Admissions revenue  $ 9,268  $ 6,600  $ 16,781  $ 14,213
Non-refundable license fees for current exhibitions  1,314  738  2,790  1,797
Total exhibition revenue  $ 10,582  $ 7,338  $ 19,571  $ 16,010
         
Number of venues presented 18 17 23 20
Total operating days  1,598  1,099  2,959  2,312
Total attendance (in 000's)  924  498  1,748  1,166
Average attendance per day  578  453  591  505
Average ticket price per pre-partner split  $ 14.32  $ 17.54  $ 14.67  $ 16.82
Average merchandise sales per ticket sold  $ 2.56  $ 2.24  $ 2.57  $ 2.30
         
These key non-financial measurements do not include the AEI properties or merchandise sales.
CONTACT: Investor Contact:
         Michael J. Little
         Chief Financial Officer and
         Chief Operating Officer
         (404) 842-2600
         michael.little@prxi.com

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