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Premier Exhibitions Reports Third Quarter 2013 Results

Stocks in this article: PRXI

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.
Condensed Consolidated Balance Sheets
(in thousands, except share data)
     
  November 30,  February 29,
  2012 2012
  (Unaudited)  
ASSETS
     
Current assets:    
Cash and cash equivalents  $ 6,150  $ 2,344
Certificates of deposit and other investments  405  405
Accounts receivable, net of allowance for doubtful accounts of $325 and $311, respectively   1,672  1,390
Merchandise inventory, net of reserve of $82 and $22, respectively  1,367  1,082
Deferred income taxes  44  44
Income taxes receivable  155  246
Prepaid expenses   3,332  1,078
Other current assets  166  88
Total current assets  13,291  6,677
     
Artifacts owned, at cost  2,943  2,990
Salvor's lien  1  1
Property and equipment, net of accumulated depreciation of $16,958 and $14,183, respectively  11,847  10,298
Exhibition licenses, net of accumulated amortization of $5,615 and $5,470, respectively  2,083  2,228
Other receivable, net of allowance for doubtful accounts of $480 and $206, respectively  14  15
Film, gaming and other application assets, net of accumulated amortization of $319 and $175, respectively  3,015  3,158
Long-term exhibition costs  700  --
Subrogation rights  250  250
Total Assets  $ 34,144  $ 25,617
     
     
LIABILITIES AND SHAREHOLDERS' EQUITY
     
Current liabilities:    
Accounts payable and accrued liabilities  $ 4,343  $ 4,707
Income taxes payable  156  3
Deferred revenue  2,090  2,254
Short-term portion of capital lease obligations  24  --
Short-term portion of notes payable  1,283  505
Total current liabilities  7,896  7,469
     
Long-Term liabilities:    
Lease abandonment  1,958  2,397
Long-term portion of notes payable  166  575
Long-term portion of capital lease obligations  89  --
Deferred income taxes  44  44
Total long-term liabilities  2,257  3,016
     
Commitment and Contingencies    
     
Shareholders' equity:    
Common stock; $.0001 par value; authorized 65,000,000 shares; issued 48,047,430 and 47,883,927 shares, respectively; outstanding 48,045,421 and 47,881,918 shares, respectively  5  5
Additional paid-in capital  53,168  52,479
Accumulated deficit  (33,519)  (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.  19,175  15,132
Equity Attributable to Non-controlling interest  4,816  --
Total liabilities and shareholders' equity  $ 34,144  $ 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 November 30, Nine Months Ended November 30,
  2012 2011 2012 2011
Revenue:        
Exhibition revenue  $ 5,453  $ 5,582  $ 25,024  $ 21,592
Merchandise revenue  2,209  644  7,108  2,574
Management fee  250  --  611  --
Licensing fee  --  --  59  --
Total revenue  7,912  6,226  32,802  24,166
         
Cost of revenue:        
Exhibition costs  3,559  3,689  12,206  11,931
Cost of merchandise sold  863  269  2,646  903
Total cost of revenue (exclusive of depreciation and amortization shown separately below)  4,422  3,958  14,852  12,834
         
Gross profit  3,490  2,268  17,950  11,332
         
Operating expenses:        
General and administrative  3,304  3,516  11,476  10,333
Depreciation and amortization  918  928  2,649  2,938
Impairment of intangibles and fixed assets  --  --  --  783
Litigation settlement  --  --  --  358
Total operating expenses  4,222  4,444  14,125  14,412
         
Income (loss) from operations  (732)  (2,176)  3,825  (3,080)
         
Interest expense  (112)  (4)  (286)  (4)
Gain on debt modification  10  --  81  --
Other income (expense)  3  (8)  20  6
         
Income (loss) before income taxes  (831)  (2,188)  3,640  (3,078)
         
Income tax expense  49  --  277  39
         
Net income (loss)  (880)  (2,188)  3,363  (3,117)
Less: Net (income)/loss attributable to non-controlling interest  251  --  (16)  239
Net income (loss) attributable to the shareholders of Premier Exhibitions, Inc.  $ (629)  $ (2,188)  $ 3,347  $ (2,878)
         
Net income (loss) per share:        
Basic income (loss) per common share  $ (0.01)  $ (0.05)  $ 0.07  $ (0.06)
Diluted income (loss) per common share  $ (0.01)  $ (0.05)  $ 0.07  $ (0.06)
         
Shares used in basic per share calculations   48,029,592  47,427,251  47,988,433  47,362,196
Shares used in diluted per share calculations  48,029,592  47,427,251  49,094,927  47,362,196
         
Comprehensive income (loss)  $ (629)  $ (2,230)  $ 3,354  $ (2,903)
         
         
        Table 3
Premier Exhibitions, Inc.
Condensed Consolidated Statements of Cash Flow
(in thousands)
(unaudited)
         
  Three Months Ended November 30, Nine Months Ended November 30,
  2012 2011 2012 2011
Cash flows from operating activities:        
Net income (loss)  $ (880)  $ (2,188)  $ 3,363  $ (3,117)
         
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:    
Depreciation and amortization  918  928  2,649  2,938
Impairment of intangibles and fixed assets  --  --  --  358
 Lease abandonment  (150)  (149)  (439)  (458)
 Gain on debt modification  (10)  --  (81)  --
 Stock-based compensation  96  158  649  529
 Allowance for doubtful accounts  93  53  288  41
 Net gain on disposal of assets  --  (7)  --  (27)
Changes in operating assets and liabilities, net of effect of acquisitions:        
(Increase)/decrease in accounts receivable  882  844  (296)  1,760
(Increase)/decrease in merchandise inventory, net of reserve  98  (212)  (260)  (173)
Decrease in notes receivable  --  --  --  200
Increase in prepaid expenses   (145)  (53)  (69)  (471)
(Increase)/decrease in other assets  (23)  (26)  (78)  64
(Increase)/decrease in long-term development costs  (160)  --  (160)  --
(Increase)/decrease in income taxes receivable  (45)  10  91  59
Increase in other receivables  (101)  (122)  (273)  (122)
Decrease in accounts payable and accrued liabilities  (55)  (745)  (364)  (951)
(Decrease)/increase in deferred revenue  350  1,000  (164)  (31)
(Decrease)/increase in income taxes payable  34  --  153  --
Total adjustments  1,782  1,679  1,646  3,716
Net cash provided by (used in) operating activities  902  (509)  5,009  599
         
Cash flows from investing activities:        
Purchases of property and equipment  (200)  (56)  (545)  (966)
Proceeds from disposal of assets  --  7  --  27
Acquisition of assets of Exhibit Merchandising, LLC  --  --  (125)  --
Titanic expedition costs incurred  --  (262)  --  (262)
Purchases of certificates of deposit  --  (1)  --  (4)
Decrease in artifacts  10  4  47  14
Non-controlling investment in consolidated joint venture  --  --  --  77
Net cash used in investing activities  (190)  (308)  (623)  (1,114)
         
Cash flows from financing activities:        
Proceeds from option and warrant exercises  --  --  136  8
Purchase of treasury stock  (18)  --  (96)  --
Payments on capital lease obligations  (2)  --  (2)  --
Payments on notes payable  (145)  (161)  (625)  (161)
Net cash used in financing activities  (165)  (161)  (587)  (153)
         
Effects of exchange rate changes on cash and cash equivalents  --  (40)  7  (20)
         
Net increase (decrease) in cash and cash equivalents  547  (1,018)  3,806  (688)
Cash and cash equivalents at beginning of period  5,603  4,094  2,344  3,764
Cash and cash equivalents at end of period  $ 6,150  $ 3,076  $ 6,150  $ 3,076
         
Supplemental disclosure of cash flow information:        
Cash paid during the period for interest  $ 10  $ --  $ 52  $ --
Cash paid/(received) during the period for taxes  $ 59  $ --  $ 33  $ 37
Supplemental disclosure of non-cash investing and financing activities:        
Unrealized loss on marketable securities  $ --  $ (2)  $ --  $ (5)
Assets purchased with notes payable  $ --  $ 1,377  $ 11,917  $ --
Purchases of property and equipment under capital leases  $ 115  $ --  $ 115  $ --
         
         
        Table 4
Adjusted EBITDA
(In thousands)
         
         
  Three Months Ended Nine Months Ended
  November 30, 2012 November 30, 2011 November 30, 2012 November 30, 2011
  3Q13 3Q12 3Q13 3Q12
         
Net income (loss)  $ (880)  $ (2,188)  $ 3,363  $ (3,117)
Provision for income taxes 49  --  277 39
Interest expense 112 4 286 4
Gain on debt modification (10)  --  (81)  -- 
Other (income) expense (3) 8 (20) (6)
Gain on disposal  --  (7)  --  (27)
Depreciation and amortization 918 928 2,649 2,938
Impact of Hurricane Sandy on the New York - Seaport 320  --  320  -- 
Litigation settlement  --   --   --  783
Impairment of intangibles and fixed assets  --   --   --  358
Stock-based compensation 169 158 807 529
Adjusted EBITDA(1) $675  $ (1,097) $7,601 $1,501

(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 Nine Months Ended
  November 30, 2012 November 30, 2011 November 30, 2012 November 30, 2011
  3Q13 3Q12 3Q13 3Q12
Compensation, excluding stock-based compensation  $ 1,870 $ 1,466 $ 5,697 $ 4,373
Stock-based compensation  169  158  807  529
Bad debt expense  --  --  14  --
Legal and other professional fees  413  649  2,219  1,753
Rent and other office expenses  337  516  1,013  1,216
Other  515  727  1,726  2,462
General & Administrative expense  $ 3,304  $ 3,516  $ 11,476  $ 10,333
 
         
         
        Table 6
Exhibition Revenue & Operating Statistics
(In thousands)
         
  Three Months Ended Nine Months Ended
  November 30, 2012 November 30, 2011 November 30, 2012 November 30, 2011
  3Q13 3Q12 3Q13 3Q12
         
Admissions revenue  $ 4,876  $ 4,827  $ 21,657  $ 19,040
Non-refundable license fees for current exhibitions  577  755  3,367  2,552
Total exhibition revenue  $ 5,453  $ 5,582  $ 25,024  $ 21,592
         
Number of venues presented 26 18 32 28
Total operating days  1,246  1,244  4,205  3,368
Total attendance (in 000's)  497  373  2,245  1,517
Average attendance per day  399  304  534  451
Average ticket price per pre-partner split  $ 16.00  $ 16.48  $ 14.93  $ 16.98
Average merchandise sales per ticket sold  $ 2.26  $ 1.89  $ 2.28  $ 2.09
         
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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